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4 Financial Considerations for Retiring in Denver

The picturesque mountains, year-round blue skies, and growing beer and culinary scene are just a few reasons Denver is the perfect place to retire. In fact, year-over-year, Denver — and more broadly, Colorado — secure top spots on various “best places to retire” lists.

If Denver ranks on your list as an ideal location to retire, have you customized your retirement plan to fit its unique financial criteria? If not, have no fear. This resource can serve as your guide to help you define financial considerations to create an enjoyable retirement in Denver.

Check out five factors to consider for your Denver retirement planning.

1. Housing in a Changing Market

If buying or selling real estate in the Denver area is a component of your personal retirement plan, consider the market and its fluctuations.

Housing price facts: According to Zillow, the median housing price in Denver has increased year-over-year for the last eight years straight, with the current median cost hovering around $365,000. This price tag is above the national average of $226,800, but lower than the average in major metros, and other cities of comparable size like Austin, Texas or Salt Lake City, Utah.

Current market changes: Even though a recent Denver Post article indicates the housing market in Denver is experiencing a cool down - swinging toward a buyer’s market rather than a seller’s - there is plenty of evidence to show the market is still a good one in which to invest. Specifically, “High-demand neighborhoods like RiNo, Sloan’s Lake, and Highland are as competitive as ever,” says Jill Schafer, chair of the market trends committee of the Denver Metro Association of Realtors.

The takeaway: For anyone incorporating real estate into their overall retirement plan, it’s critical to keep a close eye on the market. By observing the patterns in real estate, you can better determine how a transaction will impact your overall retirement plan, whether you’re buying or selling.

2. Overall Cost of Living

Housing expenses are only a part of your comprehensive financial plan. If you’re unfamiliar with Denver, you’ll want to consider the overall cost of living. Will a move to Denver call for adjustments to your current savings strategy?

Fast facts about Denver’s cost of living, according to SmartAsset:

  • Date night, at a mid-range restaurant in Denver, will cost about $60, compared to the national average of $50.
  • Beer in Denver is roughly $5, compared to the national average of $4. (But, can we talk about the craft beer scene here?)
  • Utility prices (electricity, heating, water, and garbage for a 915-square foot abode) cost an average of $124.01 in Denver, compared to the national average of $152.06.
  • Residents pay an average of $2.77 per gallon for gas, compared to the national average of $2.86.
  • According to PayScale, grocery prices in Denver are 2 percent lower than the national average.

Though Denver remains close to U.S. averages for cost of living, according to the Bureau of Labor Statistics, the overall cost of living in Denver has increased 1.6 percent over the last year and may continue to climb in the years to come.

Takeaway: If you’re moving to Denver from a major metro, the decreased cost of living will help you stretch your retirement savings quite a bit. For those living in less expensive areas, take a detailed look at how your spending patterns will be affected in a pricier region by using online tools like this calculator from PayScale. Slight increases might affect your existing retirement plan. As with other areas of financial planning, the cost of living is destined to change year-over-year.

3. Rising Healthcare Costs

Denver is ranked as one of the healthiest cities in the United States due to its prevalent fitness scene and it’s well-performing healthcare system. Unfortunately, there is a price to pay for this utopian lifestyle.

The overall cost of healthcare in Colorado has been increasing year-over-year. Experts point to the state’s increasing cost of living and the expense to hire doctors and nurses as two key factors driving up total healthcare costs for individuals in the state.

Despite the documented increases, Colorado still remains more affordable than other states across the nation. According to The Colorado Sun, the average person in Colorado spends $6,804 in health care each year, which is well below the national average of $10,739 per person.

Takeaway: Healthcare will be a large component of your personal retirement plan strategy regardless of your retirement location. After just five years living in Denver, you can expect to have spent an average of $34,020 on health care expenses. However, compared to the rest of the nation, The Centennial State remains more affordable — at least for the moment.

4. Factoring Lifestyle into Retirement

During retirement, no more 9-to-5 job means you’ll have the opportunity to reallocate your time toward hobbies and activities you enjoy. In fact, we argue planning for retirement based on your personal values is the most important component of a comprehensive retirement plan.

One way to factor your lifestyle into a retirement plan is through a Planning for LIFE Experience™ framework, which Wealth Legacy Institute has coined and perfected. This approach to retirement planning means:

  • Determining your retirement values
  • Walking through variations for monthly spending and retirement ages to find your perfect balance of time in the workforce and savings for a happy retirement
  • Defining action items to help you achieve your ideal retirement

For some clients, the perfect retirement involves traveling and exploring the world. For others, it’s about enjoying their current city and all it has to offer. For those who relocate to Denver for retirement, we’re lucky to have many great options for recreation and entertainment.

From fly fishing and hiking to long weekends at national parks, there is no shortage of access to leisure within and near this city.

Takeaway: According to Daniel Gilbert’s book “Stumbling on Happiness”, thinking about future happiness stimulates pleasure centers in your brain. By carefully preparing for your retirement, not only will you have something to look forward to, but you’ll also enter retirement with confidence and security, making your future reward even sweeter.

Working with a Local Professional

After reading this article, you may have noticed that every aspect of financial planning fluctuates year-over-year. To keep up with the changes and their impact on your personal retirement plan, it’s wise to work with a wealth advisor. Choose a local professional who can help you zero in on expenses, investments, and financial adjustments that match the changes specific to your region.

If you plan to retire in Denver, Wealth Legacy Institute is staffed with local fiduciary advisors to not only help you plan your perfect retirement but to do so with your best interests in mind.

Want to learn more about retirement in Denver?

Read our 2020 Guide to Retiring in Denver for additional considerations that will factor into your personal retirement plan.

2020 Denver Retirement Guide

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