Spending Your Retirement Years in Hell, AKA Sunny California

"The question isn't at what age I want to retire, it's at what income."

--- George Foreman

In America, many people spend the early decades of their life struggling through school and then work, often with few days off and fewer vacations, all in hopes that one day, they might retire and finally be able to do all those things that they've put off for most of their lives. Just as every individual has his or her own preferences and talents in the professional world, every person has some ideal retirement, whether it be a modest bungalow on a white sand beach that stretches for miles, or a penthouse apartment that overlooks Central Park. For some, however, their latter years are less golden than brass.

A recent article from U.S. News & World Report listed the ten "worst" locations to spend those years of leisure, and the results are surprising. Where one might expect to see detailed such vacation destinations as Duluth, Minnesota or Gary, Indiana, Report lists, instead, household names like Honolulu, New York City, Los Angeles, and Washington, D.C. What, aside from stunning architecture, pleasant seasonal temperatures, gorgeous landscapes, and historical landmarks, could be wrong with spending those olden, golden years in any of these world-renowned cities?

There is only one answer to that question and, uncannily enough, it's the answer to a staggering number of questions on the minds of the general public in America today: money. As inflation continues unfettered, stocks continue their roller-coaster acrobatics, and government agencies warn of greater evils to come, the almighty dollar and its attainment have become increasingly elusive, even to those who had, previous to the recession, never given their seemingly ever-present financial stability a second thought. In this new landscape of political, economic, and social unrest, the concept of prime vacation and retirement destinations takes on new meaning.

One might argue that those employed by the federal government should be rewarded for their years of service to their country; this argument is quite valid, and is supported by a host of benefits available only to federal employees. Perhaps one of the biggest perks offered only to these employees, military included, is the Thrift Savings Plan (TSP); not only can workers use this as a savings account for their eventual retirements, but the government also matches a certain amount of each contribution an employee deposits. Sounds like federal employees, then, should have the luxury of retiring anywhere from Connecticut to California, right?

With evidence mounting that the federal government's threats of temporary shutdowns and sequestrations are anything but idle, those federal employees who once relied with unfailing faith on their employers are now wondering whether their financial futures are secure, after all. Sequestration often means layoffs and lost wages, and the recent issuance of the first wave of federal employee furlough notices lends more credence to this cloud of doubt. Missing even a couple weeks' worth of pay and TSP contributions might prove disastrous to some employees who rely upon a fixed income; for others who might escape this round of cuts, there are likely more to come.

In the event of another stock market crash as witnessed in 2008, however, all bets are off. Forget furloughs; for those federal employees whose TSP funds are positioned in particularly volatile accounts, their retirement plans might include such posh accommodations as the local weekly-pay roach motel. With assisted living prices in the thousands of dollars per month, many retirees might find themselves with no option other than securing a post-retirement job... or forgoing the warm sands of San Diego for the brisk, biting breezes of Fargo.

Before exposing their hard-earned retirement savings to the unpredictability of the stock market and risking a post-career job in customer service, federal employees should explore their options in savings, particularly in repositioning retirement monies from more to less volatile funds. Otherwise, that dream penthouse in Manhattan might become a garden studio in South Harlem overnight.

References (click to link to articles):

"Furlough to affect Thrift Savings Plan contributions," American Forces Press Service, 3/22/2013.

"The 10 worst places to retire," U.S. News & World Report, 3/11/2013.