If you’re worried about retirement, you’re not alone. A new survey from TD Ameritrade found that 37 percent of Generation Xers don’t think they’ll be able to afford to quit working – ever. With prices for housing on the rise in the Lone Star State, is retirement still within reach for most Texans?
Michael Sury, a lecturer in the Department of Finance at The University of Texas at Austin, says concerns about retirement readiness can take several forms: not having enough money saved, worrying about running out of money after leaving the workforce, or not saving any money for retirement.
“Surveys have tended to show that Gen Xers believe that they’ll need about half a million [dollars] to retire,” Sury says. ” And unfortunately when you do some of the financial planning that’s necessary to try and understand what you need for retirement, it turns out that number is woefully inadequate.”
Sury says it actually takes $1 million to retire, assuming modest investment returns, and inflation.
With no state income tax, and a somewhat lower cost of living in metro areas than you find in other cities around the country, Sury says Texas is a pretty good place to retire. But the cost of living is on the rise, especially in Austin and Dallas.
“As we see more and more demand coming into our cities, and higher incomes, you can seriously expect the cost of living to rise here as well,” Sury says.
Sury says there are risks even for those who own a home or have managed to save for retirement. He predicts a correction in housing prices, and says the high-flying stock market is due for a downward swing at some point.
Written by Shell Brisbin.