Personal Finance FAQ

How Much Do I Have to Save to Retire in Columbia, South Carolina?

Cackalacky: South Carolina’s nickname, used when goofy things happen. (Source)

The real estate adage that seemingly everyone knows is “location, location, location.” The house in the swanky neighborhood is going to be more expensive than the run-down claptrap fixer-upper in a bad part of town.

The adage also applies in personal finance. How much you need to retire depends on where you’re going to retire. If you want to retire in New York City, it’s going to take a lot more than it would take to retire in Dubuque, Iowa.

The methodology we use to determine how much you need to retire is based on the Trinity study from William Bengen, which states that you can spend 4% of your net worth each year in retirement lasting for a 30 year retirement. Research by Michael Kitces and Wade Pfau confirm that the rule is still a reasonable rule of thumb for figuring out how much you need to retire.

So, in this analysis, we will evaluate

  1. How much it costs to live in your city
  2. 25 times that amount to enable you to withdraw at a 4% “safe withdrawal rate

How Much Do I Need to Save to Retire in Columbia, South Carolina?

Cost of Living in Columbia, South Carolina

According to the website Numbeo, the cost of living for a four-person family without rent or a mortgage is $2,824.79 per month. Rent in a 3-bedroom apartment in the city center is $1,510.00 per month, and rent outside the city center is $1,165.00. That’s probably the difference between living in Five Points and living in Arsenal Hill. So, we’ll split the difference and say that the average rent is $1,337.50 per month.

Therefore, the total estimated cost of living for a four-person family in Columbia, South Carolina is $4,162.29 per month. This translates into a $49,947.48 annual cost of living.

So, in order to retire in Columbia while renting an apartment and abiding by the safe withdrawal rate, you would need $1,248,687.

Cost of Housing in Columbia, South Carolina

Let’s assume that you want your own house and plot of land to let the dog run around in. White picket fences and 2.5 kids is the American dream, after all. How much does an average house cost in Columbia?

According to Zillow, which we use to grow and manage our real estate investments, the median home price for homes that are listed is $182,900.

However, you are going to have to exchange rent for insurance and property taxes, as well as allocating for maintenance and upkeep on your house. In Columbia, South Carolina, property taxes are 59.3 cents per $100 of value. Insurance is approximately $35 per month for every $100,000 of value. Home maintenance costs approximately 1% of your home value every year.

So, if you’re going to own a $182,900 home, you won’t have to pay the $1,337.50 per month in rent, but you will have the following expenses:

  • Property taxes: $108.46 per year
  • Insurance: $768.18 per year
  • Home maintenance: $1,829.00 per year
  • Total: $2,705.64 per year, or $225.47 per month

Therefore, your cost of living in Columbia, South Carolina, if you own a home will be $3,050.26 per month, or $36,603.12 per year. If you already own a house, then the amount you need to retire will be $915,078, and if you need to purchase the $182,900 home, then you will need $1,097,978.

All of these numbers are estimates. If you live in Five Points versus Arsenal Hill, your numbers will vary. If you eat at Saluda’s every night versus cooking at home all of the time, your numbers will vary. However, this should give you an idea of how much you need to be able to retire in Columbia.

Need help getting there? You can find a financial planner in Columbia to get you started on that path.

By Jason Hull, CFP®