If you're weighing how long a retirement portfolio will hold up, location matters a lot. A $500,000 nest egg can stretch very differently depending on whether you live in a low-cost city, own your home free and clear, or still have rent or mortgage payments to make each month.
The good news is that this amount does not need to carry retirement alone. When Social Security covers part of your monthly spending, the same portfolio can last much longer in some places and reduce financial pressure.
Below is a look at nine relatively affordable cities and the hidden costs that could change the picture before you move.
Editor's note: All housing data comes from Zillow, unless otherwise stated.
The assumptions behind the math
The portfolio stretches furthest when it is only part of the income picture, so this comparison factors in Social Security at $2,071 per month, the average retired-worker benefit, or $24,852 per year.
The investment portfolio is assumed to cover each city's annual spending after subtracting that benefit. Years of coverage are calculated by dividing $500,000 by the remaining shortfall. Investment returns, inflation, and federal taxes are not included in the model.
The spending baseline uses the Bureau of Labor Statistics average for households age 65 and older: $61,432. From that figure, housing costs of $22,193 were removed, and the remaining $39,239 was adjusted using Kiplinger's retiree cost-of-living index for each city. Housing was then added back in. Renters are assigned each city's typical rent plus $3,600 a year for utilities, while homeowners without a mortgage are assumed to pay property taxes, insurance, utilities, and 1% of home value for maintenance on a home priced at the metro average.
Nine cities, worked through one by one
| City | Average home price | Average rent | Cost of living vs. U.S. | State tax on retirement income | Years if renting | Years if owning |
| Peoria, Illinois | $136,279 | $1,125 | -24.4% | Exempt | 22.8 | 31.9 |
| Jackson, Mississippi | $83,517 | $1,195 | -23.9% | Exempt | 21.8 | 39.4 |
| Fort Wayne, Indiana | $245,193 | $1,221 | -18% | Social Security exempt | 19.5 | 27.3 |
| Des Moines, Iowa | $208,053 | $1,095 | -13.4% | Exempt at 55+ | 19.3 | 23.6 |
| Augusta, Georgia | $187,663 | $1,350 | -20% | Up to $65,000 excluded at 65+ | 19 | 31.2 |
| Oklahoma City, Oklahoma | $204,979 | $1,395 | -14.5% | Up to $10,000 excluded | 17.2 | 23.2 |
| Kansas City, Missouri | $250,185 | $1,429 | -11.6% | IRA/401(k) taxed | 16.3 | 22.6 |
| Columbus, Ohio | $243,122 | $1,500 | -8.6% | IRA/401(k) taxed | 15.3 | 21.9 |
| Lexington, Kentucky | $331,087 | $1,650 | -9.2% | $31,110 deduction | 14.6 | 20.1 |
Methodology note: The $3,600 utility assumption was used for both renters and homeowners, and homeowners were also assigned annual maintenance costs equal to 1% of home value. Insurance figures are averages, and effective property-tax rates can vary widely within a state. These ownership estimates should be viewed as illustrative.
The homeowner scenario is stronger in every city because it eliminates rent and usually lowers housing costs. Even so, buying a home outright requires funds outside the $500,000 portfolio.
Main takeaways
Best for renters: Peoria, thanks to its 24.4% lower cost of living.
Best for homeowners without a mortgage: Jackson, where the portfolio could last about 39 years, helped by Mississippi's retirement-income tax exemption and property taxes of roughly $2,071 on an average home.
Des Moines offers a useful caution. Rent is relatively low at $1,095, but ownership only adds about four years of coverage compared with renting, from 19 years to 23 years, because the city's 1.51% effective property-tax rate lifts annual taxes to around $3,000.
Oklahoma City loses some of its housing savings to higher insurance costs.
Peoria and Jackson, the two cities with the deepest cost-of-living discounts, are where $500,000 lasts the longest. Columbus and Lexington, which sit only 8% to 9% below the national average, rank near the bottom.
A $1,500 mortgage would shorten the timeframe in each city to roughly 12 to 16 years, which could erase much of the advantage of owning a home.
Why the Midwest and South stand out
All nine cities in this list are in the Midwest or the South. That matches Kiplinger's broader ranking of the 24 cheapest places for retirees, which is largely shaped by lower housing costs and a lower overall cost of living.
By contrast, coastal metros where households age 65 and older spend more than the national average of $61,432 tend to fall below the 14-year mark. High housing, property-tax, and insurance costs help explain why none of those places appear here.
What a cost-of-living index can miss
- Homeowners insurance: Coverage and premiums vary from place to place.
- Property taxes after a purchase: Effective rates differ, and many states reassess homes at sale, so a neighbor's tax bill may not match yours.
- Medigap premiums: A Plan G averages $183 per month in Mississippi and $257 in Missouri, an annual difference of $888.
- Access to specialists: Every metro on this list has major medical centers, but moving to a smaller town for cheaper housing could leave a retiree an hour or more from a cardiologist or oncologist.
Bottom line
A $500,000 portfolio paired with an average Social Security check can support retirement in many of these cities. Depending on housing, the model suggests about 15 to 23 years for renters and 20 to 39 years for homeowners without a mortgage, compared with roughly 14 years at national-average spending.
That said, the money is not guaranteed to last that long. Inflation, weak investment returns, federal taxes, and surprise medical bills could all shorten the timeline. The best approach is to test the numbers using your own household budget rather than a national average.
This article is for informational purposes only and should not be considered investment advice.
Choice Home Warranty Benefits
- First month free
- Protection for unexpected expense
- 24/7 claims hotline
- Network of over 15,000 technicians
More from Digilifetrends
Vanguard identifies 3 financial priorities married couples should tackle
Most married couples want financial stability, but agreeing on that objective is not the same as working together to reach it. Without a common plan, couples who value the same…
4 min read · Published 2026-11-02Clark Howard Says Not to Hurry on Mortgages Under 5% — Do This First
Clark Howard says mortgages below 5% do not need to be paid off early, but only after a Roth IRA and 401(k) are fully funded.
5 min read · Published 2026-11-01Clark Howard Says Not to Hasten Mortgage Payoff When Rates Are Under 5% — Start Here Instead
Clark Howard has a straightforward rule for homeowners with a low-interest mortgage, but the numbers show an important wrinkle: the right move depends on where your extra cash is…
5 min read · Published 2026-11-01