Retiring to Colorado? New Study Shows You'll Need A Nest Egg Of At Least $1 Million

 

                                       Traffic on I-25  near Denver not long ago. 

As I've written in earlier posts, thousands continue to move to the state of Colorado each year looking for something different from their own - especially on retiring.  In my own county (El Paso)  3,200 move here on average a year.  Colorado added 26,489 new residents in 2021 while last year 27,717 new folks moved here.

 Most of the newcomers are unaware the available water resources don't support the influx. Many are also shocked to find out the economy won't support a sustainable life style.

According to Prof. Tony Robinson, who chairs the political science department at the University of Colorado- Denver:

 "The Rocky Mountain West was not meant to be a highly populated area. There simply is not enough water in the West to sustain the kind of growh rates going on."

 Why then do so many people - especially looking for a place to retire - want to move to Colorado? Well, because of the majestic mountain scenery,  e.g.

                          Approaching Twin Lakes in Colorado  - scenic drive

which admittedly isn't as crisp as it used to be thanks to too much pollution from places like the Suncor refinery, e.g.

Cold Weather Triggers Another Suncor Pollution Event - Just Before The Holidays 

And, of course, we oldsters are getting a lot of the blame for growth too. According to the same D. Post report from a few years ago, quoting Lieutenant Governor Donna Lynne:

"Even though people talk a lot about the influx of millennials, the population that is really growing and that we're really concerned about is the over-65 population."

The report goes on to state that between 2000 and 2025 the number of people retiring in the state is expected to increase by 74 percent.   This compares to a projected 27 percent increase in the work force over the same period.  Then warning:

"By 2030, the state's senior population is expected to increase by 508,000 or 68 percent over current levels."

But any of these folks coming, I mean the over 65 set, had better have a 'ton' of money, I am talking about at least $1 million saved in addition to the Social Security they may be receiving (and that would be before Social Security is reduced by 2035 unless congress acts to bolster it.)

According to a new study from LendingTree  the average amount a retiree receives in Social Security payments ($25,504), and their average annual spending ($58,992) they'd need to earn $75,245 a year before taxes.  (And I'm assuming they can afford the average home cost in most Colorado communities, of a half million.) retirement portfolio would need to provide $49,741 to meet that demand.  Following the 4% rule withdrawal from portfolio rule, a Denver area retiree would need to set aside $1,243,532 at the time of retirement.   

Thinking of moving to a less expensive Colorado community? Think again. The same study found that a retirement nest egg of $1.16 million was needed in Boulder; $1.08 million would work here in Colorado Springs; $1.12 million in Fort Collins; $1.02 in Grand Junction, and $1.09 million in Greeley. The only metro area in Colorado with a nest egg requirement below $1 million was Pueblo at $943,742.  But given the short housing supply and hundreds of people searching for homes there they can't afford here in the Springs, I'd wager they still need a million or more to make it- even in Pueblo.

The lack of housing, creating a shortage of supply throughout Colorado, has radically driven up costs even forcing many who'd moved to Denver to look for housing 67 miles away in Colorado Springs. So now our housing prices have been shooting up too. (We regularly receive up to two notices a week from realtors begging to buy our place "on the spot, hard cash".  Of course, we just laugh and tear them up. Selling our place even for "hard cash"  would then put us behind the eight ball to get any new place, especially now with current high interest rates.

Thinking of retiring soon?  Best to look beyond Colorado, or if you do intend to come make sure you have that $1 million plus you will need to live here, especially to buy that new home.  And be reminded there are also limits being placed on new developments precisely because of this state's water supply problems thanks to a 20+ year, once in a millennium drought. 

See Also:

New Home Tracts Closed To City Water Access In The Springs? Yes, For Now - Given Limited Water Supply