Traverse City Has Lake Michigan Beaches and Cherry Orchards. What It Takes to Retire There at 66 on $1.1 Million

详细摘要

A couple with $1.1 million and Social Security can cover the Michigan budget, but one big purchase could tip the math. Before they fall for the orchards and Lake Michigan beaches, they need to look at the house and a February test.

Can a retired couple afford to live in Traverse City, Michigan, on Grand Traverse Bay? Some couples who vacation in the area consider staying year-round. Here's the situation: a married couple, both 66, both starting Medicare, with $1.1 million saved. Whether it works depends largely on whether they've already paid off their home.

The SSA estimates a typical couple where both spouses collect benefits gets $3,095 a month in 2026, rising to $3,208 a month after the 3.6% COLA for 2027. That comes to about $38,500 a year. Taking 4% of $1.1 million adds $44,000. Put together, that's roughly $82,500 a year, or about $6,875 a month. A 3.6% COLA is set for 2027.

On the spending side, the BLS puts average household spending at $81,905 for 2025. Michigan's price level stands at 96.2, compared with the national 100. Adjusted for that, the average is about $78,800, or roughly $6,570 a month. The statewide average may understate Traverse City's resort housing market, which tends to run hotter than the state overall.

Medicare Part B costs $202.90 a month per person, so about $4,870 a year for the two of them. That's before Part D, a Medigap plan, or the $283 deductible each. Their income stands far below the $218,000 joint IRMAA threshold, so Medicare's income surcharges won't apply.

Many successful investors eventually reach the same moment. The saving is done, the portfolio is built, and the question quietly changes from how much can I grow this to how much can I take out? Get that second question wrong and decades of good investing can come apart in a handful of years.

Federal tax is another line in the budget. With $44,000 in withdrawals, about $22,400 of their benefits become taxable. Subtracting the $32,200 joint standard deduction, a rough estimate lands near $3,600. Spending plus tax comes to about $82,400, which uses up nearly all of the income. Michigan, for its part, doesn't tax Social Security, and the state finishes its phase-out of the tax on retirement income this year.

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