Muskegon is, indeed, a “cheap place to retire” from a cost of living standpoint. Sperling’s Best Places, a respected source of information and data about people and places, puts the cost of living in Muskegon at forty-two percent less than Chicago.

That’s right: Your limited retirement savings can stretch nearly twice as far in Muskegon than in high-cost big cities.

Living costs have always been a huge concern for people retiring on “fixed” incomes. But in today’s economy, retirees (and future retirees) need to focus on living costs more than ever. Boston College’s Center for Retirement Research recently reported that 401(k) and IRA retirement accounts held by U.S. households have lost an astounding $2 trillion dollars in value in the one-year period ended October 9, 2008:

During a one-year period, the value of equities in retirement accounts declined by almost $4.0 trillion. Individuals were sheltered from the immediate impact of the $1.9 trillion of losses in defined benefit plans. But they did experience a direct hit on the $2.0 trillion in losses that occurred in 401(k)s and IRAs. In all likelihood, many panicked amid the turmoil and sold assets at depressed prices. And these people may be late in getting back into the market to enjoy gains as the market recovers. Equally important, holders of 401(k)s/IRAs were left feeling vulnerable and impotent
as their savings evaporated.

Strategies for dealing with financial setbacks of this magnitude are limited. Many retirees are returning to work and many workers are postponing retirement plans. Others are looking for ways to cut costs including downsizing their homes, looking for a lower cost community to live in, or some mix of the two.

Muskegon offers real answers to the retirement puzzle: low cost of living, high quality of life, Midwestern values and proximity and easy access to big cities like Chicago and Milwaukee. Housing options in Muskegon are abundant. Whether you choose to downsize, upgrade or find a home comparable to what you have, you can be sure your housing dollars will go much further in Muskegon. We invite you to explore our site to see if Muskegon is right for you.

Americans weaned on post-war affluence have come to expect an extended period of leisure at the end of their work life. And, indeed, the majority of today’s retirees are able to afford a decent retirement. However, this group is living in a “golden age” that will fade as Baby Boomers and Generation Xers reach traditional retirement ages in the coming decades. This gloomy forecast is due to the changing retirement income landscape. Baby Boomers and Generation Xers will be retiring in a substantially different environment than their parents did.

1. The length of retirement is increasing as the average retirement age hovers at 63 and life expectancy continues to rise.
2. At any given retirement age, Social Security benefits will replace a smaller fraction of pre-retirement earnings as the Full Retirement Age rises from 65 to 67.
3. (W)hile the share of the workforce covered by a pension has not changed over the last quarter of a century, the type of coverage has shifted from defined benefit plans, where workers receive a life annuity based on years of service and final salary, to 401(k) plans, where individuals are responsible for their own saving.
4. (M)ost of the working-age population saves virtually nothing outside of their employer-sponsored pension plan.
5. (A)sset returns in general – and bond yields in particular – have declined over the past two decades so a given accumulation of retirement assets will yield less income.

This assessment of American’s retirement prospects comes from the Center for Retirement Research at Boston College (CRR). If the assessment is on spot (and there’s good reason to believe it is) Living Cheap in Retirement will become the lifestyle goal for retirees.

CRR periodically publishes its National Retirement Risk Index (NRRI). The NRRI “measures the share of American households who are ‘at risk’ of being unable to maintain their pre-retirement standard of living in retirement. The Index results from comparing households’ projected replacement rates – retirement income as a percent of pre-retirement income – with target rates that would allow them to maintain their living standard.”

The most recent (October 2009) release of the NRRI finds that more than half (51%) of all household are ‘at risk’ of having insufficient income to maintain their pre-retirement standard of living. This means that these households will fall more than 10 percent short of the target resources needed to maintain their standard of living in retirement.

Obviously. most households need to do a better job of saving for retirement. But factors like the demise of guaranteed pensions, falling home values, and risky investment markets will challenge even the most serious retirement savers. A complementary strategy for many will need to be plan a less expensive lifestyle. Living cheap in retirement without sacrificing quality of life will be the ultimate goal.

Locales like Muskegon offer just this kind of opportunity. We invite you to check out the many tax advantages, quality lifestyle features and incredibly low living costs that Muskegon can offer.

Major Reasons Older Americans Move

• A significant share of older homeowners do, in fact, move. The two-year move rate is a modest 7 percent, a full 30 percent move over the 12-year period studied.
• Despite widely held sterotypes of retired Americans flocking to warmer climates, the study finds most moves are of a relatively short distance, with only a modest indication of Frost Belt to Sun Belt migration.
• Households that are older or have a female head are less likely to move, while those that are
  unmarried, white, or have a college degree are more likely to move.
• Older movers can be broadly categorized as either Planners or Reactors, based on whether they experience a negative shock.
• Households that receive a negative shock, such as divorce or death of a spouse, are more likely to move compared to non-shock households or households with other types of shocks.

I lived in Muskegon back in the 60′s before moving over to the east side of the state. I recently came back for a visit and realized how much I missed the place and how nice it is…or could be. Housing is cheap, taxes are low compared to over here and the Lake is fantastic. The plans for downtown are very cool, too. Winters suck, but then they do everywhere in Michigan. I’m thinking of moving back….what do you think, people?
-MHS65

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I’m not retired yet but am looking to kind of “semi-retire” and thought M2 would be a good place. I’d like to buy or build a place with some form of lake view or maybe even opt for one of the new live-work units downtown. I came back last summer and reconnected with some old MHS alums and we all agreed that this was and is a good place with essentially good, down to earth people. The bottom line is the people after all.Ideally, I’d do summers in M2 and winters somewhere warm….that is if my 401K ever recovers.I have been reading this forum and am surprised at how negative people are about the place.
-MHS65

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Personally I wouldn’t move away from here by choice. I guess that’s an endorsement to move here.

There’s no place like it and I’ve been to alot of other cities and states.

You can get a very decent house for 200,000 that elsewhere would cost 500,000. Commuting is of little concern as the roadways , while rushed at times, are hardly ever jammed. It’s the golden coast for your golden years.

Despite the harsh words of some, the people are actually quite accomodating. I think you have a great idea if you choose our area.

Welcome Home
-vintageMCC

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1. How much will it cost to live there?
2. What about taxes?
3. What medical care is available?
4. Is it easy to get to and from?
5. Is there enought to do?

We think Muskegon is a great retirement locale – especially for folks from larger midwestern cities looking to stay close to their roots yet significantly lower their living costs.

Here’s a good definition:

A Replacement Ratio is a person’s gross income after retirement, divided by his or her gross income before retirement. For example, assume someone earns $60,000 per year before retirement. Further, assume he or she retires and receives $45,000 of Social Security and other retirement income. This person’s replacement ratio is 75 percent ($45,000/$60,000).

Typically, a person needs less gross income after retiring, primarily due to several factors:

• Income taxes go down after retirement. This is because extra deductions are available for those over age 65, and taxable income usually decreases at retirement.
• Social Security taxes (FICA deductions from wages) end completely at retirement.
• Social Security benefits are partially or fully taxfree. This reduces taxable income and, therefore, the amount of income needed to pay taxes.
• Other forms of retirement income, like pensions, are often are exempt from taxation by states
• Saving for retirement is no longer needed.

For all the reasons listed above, conventional wisdom has it that most people will need about a 75% replacement ratio to maintain their standard of living in retirement. Discussion typically focuses on finding ways to maximize sources of replacement ratio income: social security, pensions and retirement savings (401k, IRA, 403b, 457, etc.).

But with company pensions non-existant for many workers and 401k plans imploding, the reality is that many people nearing retirement will not achieve a 75% replacement ratio. In essence, many people will find they cannot retire as planned or, they will need to retire to a different lifestyle and/or standard of living.

But this does not have to mean retiring in poverty or making huge lifestyle sacrifices. In many cases, moving to a lower cost area can help bring retirement finances back into balance. For example, in the Midwest, retirees living in large cities like Chicago or Milwaukee paying housing, taxes and other living expenses that are far greater in nearby smaller cities.

If you are nearing retirement and wondering how you will ever make ends meet, we encourage you to browse this website to see if Muskegon, Michigan might be the right place for you to call home in your retirement years.

There certainly can be psychological rewards from owning a home free and clear and living debt free. But, financially, you may not always come out ahead following this course. As the article notes:

To pay off a mortgage, you’ll have to come up with a lump sum, probably from your portfolio. The basic rule of thumb holds that you should usually keep your mortgage if your after-taxinterest rate is lower than the expected after-tax returns from your investments… Imagine you have ten years remaining on a $100,000 mortgage at a 6% interest rate. If you stick with mortgage payments, you’ll pay $179,000 in interest and principal over the ten years. But if your investments earn 8% a year, $100,000 would grow to $215,900 in ten years. Forgoing those earnings by using that $100,000 to pay off the mortgage early effectively costs you $36,900…

In addition to the raw financial calculations, other considerations should be kept in mind. For one, using reserves to pay down the mortgage means you will have less cash available for unexpected expenses. Homes are illiquid investments and, with the economy in a crunch, it is not as easy as it once was to access your home equity via a home equity loan or line of credit.

Second, using money from a 401k or other tax advantaged account to pay off a mortgage could push you into a higher tax bracket. This is because the funds you contributed to the 401k account were tax deferred and accumulated tax-free. But when you take the money out to pay off a mortgage, the funds become taxable. Taking $100k out to pay down a mortgage might result in an unexpectedly large tax bill!

Downsizing can be a strategy that allows retirees to live mortgage free, keep portfolios invested and retain maximum financial flexibility. For example, a retiree with a $250,000 home and a $100,000 outstanding mortgage, could sell the home, buy a $150,000 replacement dwelling and live their retirement debt-free without ever touching their other investments.

Expanding your geographical frame of reference makes downsizing decisions even more attractive: if you live in a large, expensive city, you will find that smaller communities in the same region offer far more home for the dollar.

Condominium prices in Muskegon range from $50,000 to well over $500,000 and include newly constructed developments as well as established, successful condo associations. In Muskegon, you will find waterfront Michigan retirement condos complete with boatslip or chic urban loft condos with spectacular high-rise waterviews.

We invite you to explore our website to discover the Muskegon Community and see how retiring in Muskegon can be a very savvy financial move. If you’d like more information, just drop us a note.