If your 401(k) has been mauled, don’t despair. You can still retire comfortably by taking control of your expenses–especially housing costs. One popular way to tap your home equity is through a reverse mortgage. The bank, in return for a claim on your equity, pays you for as long as you live in your home. Another strategy is to trade down. Swapping a four-bedroom house for a small town house can free up capital to put into investments that will boost your monthly income. You can save even more by moving to a place that’s fun and offers a low cost of living. Consider the five locations below, and for more options, visit MONEY magazine’s website, money.cnn.com/best/bpretire
San Antonio, Texas Mention San Antonio, and most people remember the Alamo. But there’s so much more: colleges, museums, challenging golf courses, Market Square with its arts and crafts stores, and the charming River Walk, lined with restaurants and parks. San Antonio nicely combines big-city amenities with a small-town resort feel.
–TAXES: There is no state or local income tax.
–HOUSING: The median price for a single-family home is only $70,000, half the national average of $146,000.
Grants Pass, Ore. Set in the middle of the Rogue river valley, Grants Pass offers white-water rafting and blue-ribbon fly-fishing as well as hiking, biking, golfing and skiing in the nearby Siskiyou Mountains. Shielded from the Pacific by mountains, Grants Pass has little of the rain or fog that afflicts much of the Northwest.
–TAXES: The state’s income tax ranges from 5% to 9%, but there’s no local income tax and no state or local sales tax.
–HOUSING: The average home costs just $130,000.
Charleston, S.C. Not only is Charleston a waterside city that exudes small-town feel; it also has Old World Southern charm. Cobblestone streets with stately mansions, old churches and ornate public buildings abound. And the city boasts excellent theaters, museums, restaurants and golf courses (including America’s oldest one).
–TAXES: State income tax ranges from 2.5% to 7%, and state sales tax is 5%. No local income tax.
–HOUSING: Homes in Charleston average just $123,000.
Ireland The Emerald Isle is small, so you can travel from white beaches to undulating hills in no time. And it’s the closest Europe gets to the U.S., should family or friends want to visit. Ireland is not as cheap as it used to be, and cities like Dublin are out of the question for many retirees. But rural counties such as Clare and Cork are still affordable. And language is no problem.
–TAXES: Income taxes range from 28% to 46%.
–HOUSING: The average home costs $166,000.
Mexico More and more Americans are retiring south of the border, where the cost of living is low and the weather is excellent year-round. An hour’s drive south of Guadalajara is Lake Chapala, with a large colony of U.S. retirees. For a place with fewer gringos, consider Guanajuato, a charming hilltop university town.
–TAXES: Income taxes range from 3% to 35%.
–HOUSING: Homes average $100,000 in Lake Chapala, $110,000 in Guanajuato.
–By Nick Pachetti
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