Want To Move To San Diego In Retirement? Here's What You Need To Know
San Diego is a dream retirement destination, and for good reason. Living in SD, you have easy access to beautiful beaches and other gorgeous natural areas, as well as amazing food, a vibrant arts and culture scene, and much more. However, to experience all San Diego has to offer, you’ll need plenty of savings.
Here’s what you need to know about what it takes to successfully, sustainably retire in San Diego, including expert tips from financial advisor and SD native Greg Davis.
Problem: An IRA and Social Security May Not Be Enough
If you’re currently planning for retirement, your biggest question is probably, “Will I be able to afford this?” Sadly, federal sources of income like IRAs and social security don’t always give that question an affirmative answer; more Americans are finding that their federally-issued funds don’t provide enough to live on throughout retirement. Cash flow during retirement can be especially tricky when you’re living in a high-cost area like San Diego.
However, it’s entirely possible to get enough money to retire comfortably in San Diego; it just takes some planning and strategizing. Financial advisor Greg Davis says that one of the keys to successfully retiring in SD is “understanding that retirement income and passive income and passive income are both critical; no one wants to outlive their money, they want their money to outlive them.
Solution: Passive Income
Based on Davis’ insight, it’s clear that retirees who want to live in San Diego may need more than just federal funds to live well. Davis recommends bridging the gap with a passive income strain, which can supplement your IRA and social security payouts and help you keep earning money after retirement.
Expert input is key here. Davis says, “Spend time with a financial advisor and look at long-term historical yield averages and strains before making an investment.” This approach is measured, non-impulsive, and backed by trustworthy advice.
Davis has some additional insight into what passive income might look like for retirees in the 2020s. He says, “Many of my clients have found it beneficial to include higher-yielding private credit investments in their portfolios, blending those with treasury exposure to get a higher-average yield. This approach can diversify a senior’s portfolio and bring in more returns after cashing out retirement savings.
In addition, stock market investments can have a place in a retiree’s portfolio. However, Davis recommends that retired investors keep in mind that these investments can have drawdowns of as high as 30-50%. On the other hand, private credit investments have much less volatility, and they offer a unique level of protection: equity investors will lose money first in the event of a devaluation.
As you look for ways to make retirement in San Diego more affordable, keep these tips in mind. Look for expert help from a financial advisor who understands the complexities of retiring in the 2020s, and don’t be afraid to ask any and all money questions that come to mind.
Problem: The Cost of Living in San Diego Is Very High
San Diego is one of the most sought-after cities in the US. The coastal location, outdoor-focused lifestyle, and more make it an incredibly popular place to visit or stay. However, all of that demand has led to inflated costs, both for housing and for everyday needs.
The cost of living in San Diego is currently over 100% of the national average, with medium rent sitting at over $3,000 per month. Because of the high costs, retirees need to be prepared to spend their money wisely to make it last. At first, living sustainably in San Diego can seem impossible, but that’s hardly the case. With careful planning and some professional input, you can make it work.
Solution: Live Wisely Throughout Retirement
To make your money last throughout your golden years, you’ll need to be strategic. Davis offers a few practical pieces of advice to help you get there.
First, he recommends always having a professional in your corner when making purchasing or investment decisions. This added support can help you avoid overspending and keep you realistic about your real budget and its limitations.
In addition, Davis says that historically, prices for necessities like food correlate with housing prices. In other words, living in a slightly less desirable neighborhood (away from the beach, he specifies), can save you money on more than just housing. The neighborhoods with the easiest access to the beach cost the most to live in in general, so the farther you’re willing to go from the ocean, the more affordable your life will be.
Retirement in San Diego: It’s Achievable With the Right Support
Retiring in San Diego can seem tough to achieve, but you can do it if you plan well and get expert input on your budget and decisions. Working with a professional financial advising firm like Heritage Wealth Management can help you make sure you cover all your bases and create an airtight retirement plan.
Reach out today to learn more about HWMI’s services.
