Choosing a place to retire is a big decision. Where you live can play a big role in how far your retirement savings go. As a result, it’s crucial to pick a destination that has everyone you want at a price you can afford. For many, the idea of heading to Colorado is enticing. The Centennial State has a ton to offer, particularly for those who enjoy spending time outdoors. If you are wondering whether it could be a good match for your golden years, here’s what you need to know to retire well in Colorado.
Cost of Living
Before you settle on a place to retire, it’s critical to examine the area’s cost of living scores. Those numbers give you an idea of how much a state costs in comparison to the national average. It allows you to estimate a state’s affordability before you pack your bags and head that way.
For simplicity, the national average cost of living is permanently set at 100. If a state has a score above 100, it’s a sign that it costs more to live there. For states below 100, it’s a signal of better affordability.
Colorado has a moderate cost of living score, sitting at 103.2. That makes the Centennial State seem reasonably affordable.
It’s important to note that the category cost of living scores can alter the story. In Colorado, both groceries (97.2) and utilities (86.1) are below the national average. However, housing (112.8) and transportation (105.8) are above. For healthcare, the score is near the middle, sitting at 101.0.
Housing is often a major concern. In Colorado, the average home value is $423,364. That’s a shocking $163,458 more than the national average of $259,906. And that doesn’t mean that homes are a nicer quality. Instead, it means two comparable homes, one listed in Colorado and one that’s elsewhere, that the Colorado house would be more expensive to buy.
Another critical point to examine when choosing where to retire is local tax rates. The amount of income that has to go toward paying taxes can significantly impact your lifestyle and an area’s affordability.
Colorado does have a state income tax. Unlike the federal tax system, the Centennial State doesn’t use brackets. Instead, it has a flat-rate of 4.63 percent.
When it comes to retirement income, Colorado does tax it. This includes Social Security and funds from other retirement accounts or pensions. However, they do offer an exemption of up to $24,000, depending on your age and income sources.
The Centennial state also has a sales tax. The state’s sales tax rate is 2.9 percent. However, cities can tack on their own sales taxes. This means that many areas have higher sales tax rates, with some exceeding 11 percent.
When it comes to property taxes, Colorado’s are actually fairly low. They are the third-cheapest overall, which can make a higher-cost home more affordable to keep long-term. Additionally, the Centennial State does have senior property tax programs that can help reduce the cost further.
Part-Time Job Opportunities
Many retirees have little trouble finding a part-time job in Colorado, especially if they retire in or near a larger city or town. The Centennial State weathered the coronavirus pandemic fairly well. As of April 2020, the unemployment rate hit 12.2 percent, which was significantly below the national average at that time, which came in at 14.7 percent.
Colorado has also been ahead of the national average during recovery. In September, the unemployment rate in the Centennial State was 6.4 percent. In comparison, the national average during that time was 7.9 percent, marking a full 1.5 percent difference.
Now, it is crucial to remember that the COVID-19 situation remains incredibly fluid. Some states are seeing a possible resurgence, and certain ones are even having to enact new measures in an attempt to slow the spread of the virus. As a result, it could be challenging to find part-time jobs for a while, or at least until the pandemic calms.
Best Cities for Retirees in Colorado
The city you choose has a substantial impact on your quality of life. If you’re thinking about heading to Colorado, you need to select a city that has the right kinds of amenities and lifestyle.
If you don’t know where to begin, Littleton is worth considering. There are ample recreational opportunities and a bustling downtown. Plus, you’re close to hiking and biking trails, and the city hosts a wide range of festivals and celebrations.
Englewood is another destination that should be on your shortlist. For outdoor enthusiasts, it’s hard to beat. Additionally, it’s only 20 minutes away from Denver by car, ensuring you can get into the city with ease.
If you’d rather choose a smaller town, you might enjoy Evergreen. There’s plenty to do, and it’s popular with seniors. You’ll also find plenty of options for appreciating the great outdoors.
How Much Money You Need to Retire Well in Colorado
Since Colorado has a moderate cost of living, you do need access to a decent amount of income if you’re going to retire well in the Centennial State. While the city you select is also a factor, making additional savings necessary to maintain a comfortable lifestyle, even lower-cost areas in Colorado may be more expensive than what you find in other states.
Overall, if you have access to about $65,418 per year in income, retiring well in Colorado is definitely possible. Taking care of your needs shouldn’t be an issue with that much cash, and you’d be able to handle some wants, too.
Have any tips that can help someone retire well in Colorado? Share your thoughts in the comments below.
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