How much money do you need to retire in New York City?

If you live in New York City, it’s probably because you really want to live there. After all, the cost of living in New York City is among the highest in the world, while the atmosphere, culture and experiences the city offers are the reason so many people are willing to pay those living costs.

As a New Yorker, you’re able to afford living in the city. But thinking into the future, the next question is: What would it take to retire in New York City? How much would you need to save in order to live a comfortable rest of your life in the city?

There are a number of factors that go into the answer to that question, which will be explored below.

Cost of Living

Let’s start with the obvious – New York City is an expensive place to live. That goes for everything from housing to transportation to entertainment to nearly anything else you can imagine. The first step in figuring out how much you’d need to save in order to retire in New York City is to factor the cost of living.

The housing market in New York City is notorious for its extreme prices. The monthly cost to rent a two-bedroom apartment is around $1,600, and that number is artificially low in aggregating data from the suburbs where housing is considerably cheaper. Just looking at Manhattan, the average cost for that two-bedroom apartment is around $3,800. Buying a house isn’t any less affordable, with the overall cost of a house averaging around $455,000, again adjusted lower by suburban properties.

The inflated prices continue into every aspect of daily living. If you want to own a car, expect to pay anywhere from $200 to $500+ in parking a month. If you choose to use public transportation, a subway card costs around $120 a month. Food prices are from 25% to 40% higher than national average. Clothing is more expensive, as are entertainment options like going out to a movie or going bowling.

All in all, living in New York costs more than nearly anywhere else, so you’re going to need to account for this in figuring out how much you need to retire.

Social Security and Retirement Years

When calculating how much you’ll need, there are two additional factors in your decision-making. The first is how many years you are aiming to set as your retirement years. Often times in retirement planning, the standard is a 30-year period.

The second thing to keep in mind is that once you reach a certain age, your income will be supplemented by social security payments. Obviously, if you’re planning on retiring young, those payments won’t apply.

Calculating a Figure

Taking the 30 year retirement period and using a national average social security income of $17,000, the breakdown for retirement savings for New York City is as follows:

  • $1.5 to $2 Million: This will be enough if you’re looking to scale down your living expense in retirement and live modestly, though comfortably.
  • $2.5 to $5 Million: With this amount of savings, you’ll still be able to live a life of comfort and occasional luxury, maybe even maintaining a second house or vacation property.
  • $6 Million +: With six million or more saved, you’ll be able to retire to a life of top end New York City living, as well as frequent vacations and multiple properties.
All that is predicated on the 30 year number and the idea that you’ll be drawing some supplemental social security income. If you are planning to retire earlier, adjust those figures upward by a couple million to several million depending on which lifestyle type you wish to enjoy.

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