It’s No Surprise New York City Is One of The Most Expensive Cities to Retire. But Do You Know Why?

New York City might not be the first place that comes to mind when considering retirement. While many people relocate south for sunshine, the Big Apple offers significant advantages for retirees: walkable neighborhoods, world-class healthcare, and endless entertainment.  

However, one major obstacle may stand between you and a New York City retirement: the cost. 

Retiring in New York City requires careful financial planning to handle inflated housing costs, healthcare expenses, local amenities, and taxes. As one of America’s most expensive cities, you’ll need to understand these key factors before deciding if NYC retirement is right for you. 

Key Takeaways

• Housing in New York City costs nearly triple the national average, with median home prices exceeding $1.1 million. 
• New York offers exceptional access to healthcare, but it comes at a cost higher than the national average. 
• New York taxes retirement income (except for Social Security and government pensions), and city/state income taxes can significantly reduce retirement income.
• Retirees gain access to exceptional amenities, walkability, and healthcare, but must weigh those against long-term affordability.

Understanding the Costs of Retiring in New York City

Property Prices:

Housing is by far the largest retirement expense in New York. The city’s median monthly housing cost being $2,225, significantly higher than the national average. 

If you are planning to buy, prepare for sticker shock. The median home price in New York City home price exceeds $1.1 million, nearly triple the U.S. median of $400,000. Properties in more popular neighborhoods can easily exceed $700,000. In Manhattan, expect to pay substantially more than if you decide to live in the neighboring boroughs of Brooklyn, Queens, the Bronx, or Staten Island.

For renters, there will be significant upfront costs to get into a new apartment. The standard practice requires: 

• First month’s rent.
• Security deposit equal to one month’s rent.
• An average monthly rent of nearly $4,000 for a 1-bedroom apartment (as of April 2025).
• Moving costs averaged $10,454 (up 29% since pre-pandemic).

If you are moving to New York from out of state, prepare for a few trade-offs. In New York, your money will buy a lot less square footage than elsewhere. Many buildings offer gyms, roof decks, and social spaces that will increase your quality of retirement living, but these features will come at an extra cost. And not all buildings will have the amenities you’ll want, so create a priority plan that focuses on your must-haves.

Before house-hunting in the city, create a detailed budget for housing costs and determine the highest amount you’ll be able to spend on housing in retirement. Consider consulting with a financial advisor or real estate agent to dig deeper into the data. 

Healthcare Costs

With 51 hospitals in Manhattan alone and a near-perfect healthcare access score of 99/100, New York City offers exceptional medical care for retirees. The city is home to over 6,500 healthcare facilities, giving retirees direct access to major hospital systems and specialists. 
However, this world-class care comes at a premium price:

• Fidelity estimates retirees nationwide will need $165,000 for healthcare expenses throughout retirement.
• New York has the third-highest premium cost for employee-sponsored single coverage at $9,173.
• Health insurance premiums increased an average of 13% for individual policies in 2025.
• The New York state government projects retiree healthcare costs to rise 59% between 2023 and 2028.

Important

Consider setting aside an additional 20-30% more than typical retirement healthcare calculations if choosing to retire in New York City. 

Local Taxes:

New Yorkers pay both city and state taxes, averaging $1,484 monthly.  Your tax burden as a New Yorker will include: 

• Property Taxes: Ten to twenty percent of your property’s assessed value annually, depending on which tax class you qualify for.
• Sales tax: A combined city and state rate of 8.875%.
• Income tax on retirement withdrawals: New York taxes 401(k)s, 403(b)s, and IRAs as regular income.
• State income tax: New York uses graduated brackets based on your income, ranging from 4% to 10.9%.

There is some good news, however! New York does not tax Social Security benefits, and pensions paid by New York State, local government, the federal government, or other qualifying public authorities are tax exempt.

Calculate your potential tax liability by using a NYC Department of Finance tax calculator or consulting with a tax professional familiar with New York State retirement tax laws. This will help ensure you are financially prepared for retirement in New York, and optimize your withdrawals. 

What Makes New York City So Expensive?

High Demand with Limited Real Estate:

With 1.6 million people competing for housing in a space-constrained environment, demand for housing in New York City consistently drives up the price of housing. The limited investor in a congested space creates a perpetual seller’s market that impacts both buyers and renters. 

The average upfront cost to get into a rental ($10,454) represents 14% of New York City’s median annual household income, making it a significant financial commitment before you even move in.

 High Taxes:

Unlike most places, living in New York means paying both state and city taxes. On most purchases, you’ll pay a combined sales tax of 8.875%. Some items are tax exempt, however, including medicine, medical devices, prescription drugs, most groceries (excluding pre-prepared foods), and clothing/footwear purchases under $110.

There are also specialized taxes to consider, such as: $0.25 per gallon on gasoline, $5.35 per pack of cigarettes, $6.44 on spirits, and 20.57% on cell phone services.

Before you decide to bring your car to New York City, consider that New York ranks third in the country for the highest vehicle-related taxes. Not only is gasoline taxed at $0.25/gallon, but the license fees are taxed at 28.7%, and toll fees at 45.7%.

Expensive Healthcare and Services:

New York City’s healthcare system ranks among the best in the world, but this quality comes at a steep price. Healthcare costs in New York exceed the national averages across nearly all categories, with the city having the third-highest premium costs. These rates are expected to rise, which will put additional strain on your retirement income. 

While you can save money by foregoing car-ownership in New York, public transportation will still come at a cost. New Yorkers spend an average of $557 a month on transportation. A single subway or bus ride will be increasing from $2.90 to $3 in August 2025. If you are a frequent rider, you can purchase an unlimited monthly MetroCard for around $130. If you do decide to bring a car, keep in mind that parking can easily cost upwards of $500 a month, plus tolls to get in and out of the city, as well as congestion pricing.

Other daily living expenses will account for a large portion of your monthly budget as well, as New Yorkers spend over $1,000 monthly on food costs alone. When building your retirement budget, factor in the increased cost of living expenses, including groceries, dining out, entertainment, and utilities. 

Create a detailed monthly budget that realistically covers all expenses based off of your hobbies and retirement bucket list.

Tracking your average spending for three to six months and adjusting for inflated New York prices will help you understand how much you’ll need to comfortably retire in New York City while doing things you enjoy. 

Retirement Considerations in New York City

Spending your retirement in New York City will bring some excellent benefits along with its trade-offs. The cost of living will be higher than if you were to migrate to a smaller city, but many retirees who are able to afford the elevated costs find the pay off completely worth it. 

Pros: Access to World-Class Amenities

If your ideal retirement includes dining at world-famous restaurants, seeing the latest Broadway show, and afternoon strolls through Central Park, New York could be a dream retirement destination. 

You’ll have unparalleled cultural exposure with world-renowned museums, theaters, restaurants, and parks right outside your doorstep. If access to good healthcare is your top priority, the city offers direct access to top-rated medical facilities and specialists during a time when you may need them most. 

Extensive public transportation options will eliminate concerns about driving as you age, and daily errands and activities will be accessible without a vehicle. You’ll also have the benefit of living amongst a large and diverse population, creating more social opportunities and making it easier to build a community near you. 

Cons: High Cost of Living and Housing

Housing costs will run you two to three times the national average, higher costs of everyday expenses will impact every purchase you make, from food to entertainment to basic services, and the tax burden of both city and state taxes will reduce your overall retirement income. 

With high housing demand and limited space, you may not be able to find your dream home right away. This may mean accepting smaller living quarters than other retirement destinations, and the winter weather may limit mobility for older adults. 

To determine if retiring in NYC makes sense for you, have an in-depth understanding of your projected retirement income and create a list of lifestyle must-haves versus things that would be nice to do. Take into consideration the financial impact, and decide if the benefits of living in New York make sense when weighed against the costs. This is going to be a highly personalized decision based on your priorities and lifestyle. 

The Bottom Line

New York City can offer a unique and fulfilling retirement experience, with its walkable neighborhoods, world-class healthcare, and unlimited cultural activities. However, these benefits will come at a significant cost that will require careful retirement planning. 

Here are a few steps that will help you determine if retirement in New York City is feasible: 

1. Calculate your retirement income from all potential sources (social security, investments, pensions, etc.). 
2. Explore housing alternatives, such as living farther out into the boroughs, or co-op apartments. 
3. Work with a tax specialist to maximize your tax advantages. 
4. Create a healthcare plan specific to New York, beyond standard medicare enrollment. 

Before committing to a NYC retirement, calculate your complete retirement budget taking into account the elevated costs of New York goods and services. Meet with a financial advisor to create a realistic plan and see if moving to the city is feasible with your retirement income. 

With proper planning and clear priorities, you can have the retirement of your dreams in New York City.