The Elder Economic Security Standard™ Index is jointly developed by the organization Wider Opportunities for Women (WOW) and the Gerontology Institute at the University of Massachusetts Boston. It was developed as a measure of the income that retired seniors need to achieve economic security. This index can be tailor-used to measure your status according to a specific household size, location, housing status as well as health status. It takes into consideration factors like housing, health care, transportation, food and other essentials. it is a very useful tool for estimating what income you'll need to live in just about any place in the U.S. It is also useful for measuring your current expenditure against the index of the place in which you live, and then using that as a gauge to estimate the income you'll need to sustain your particular lifestyle in another place.
It is important to note that the Elder Index is measuring how much income a retired older couple requires to meet their basic needs, living independtly. This means living without public or private assistance. And it also measures basic expenses for seniors (aged 65 and over) living within the community, and not in an institution.
As a basic example, I took a look at what income a retired senior would need to have to live in Sandusky, Ohio, recently named by Forbes as the Best Place to Live Cheaply. And then I compared that data to New York City, often ranked as one of The Most Expensive Cities to Live in the World.
A senior couple living in a one-bedroom in Sandusky, Ohio will spend $543 a month on housing (includes rent, utilities, taxes and insurance). Food will run them $446, transportation $424, and if they are in relatively good health, healthcare would cost them $706 a month. Other miscellaneous expenses of $398 would take their monthly income requirement (or Elder Index Per Month) to $2,517. That is $30,204 per year.
The same couple looking to live as comfortably in New York will pay significantly more. The index has them spending more than twice on housing (no surprise)at $1,261 a month. Food is the same at $446, transportation less at $305 and healthcare slightly lower at $656. Miscellaneous costs running $448 a month takes their total in New York to $3,116 a month, $37,392 a year.
Bear in mind that the figure assigned to each expensiture component is a very conservative estimate of what is required for subsistence. The amounts do not cater for any additional expenses the couple may have, such as extra spending money for vacations, entertainment, gifts or even dining out. This is a base index, and covers just enough for the couple to live adequately, eating fairly healthily, being covered for basic health and economic requirements.
The Elder Index is really handy for scouting out the affordability of any place you have your eye on to move to for your retirement. As long as you remember to build in some extras for enjoying the leisurely life you now have. The tool works well for establishing a base to which I think you need to add to to allow for contingencies as well as recreation.
Also check out my article on Seniors - When is it Time to Move?