Retirement Living: Moving To 'The Danish Capital Of America' Comes At A Cost

Also known as the Danish Delight, Solvang, a Santa Ynez Valley town with 6,000 residents, makes you feel like you'd left Southern California to travel back in time to a European town of yesteryear. Founded by Danish settlers, Solvang provides plenty for retirees to see, eat, and do, from Danish windmills and authentic culinary treasures to historic buildings and museums featuring Danish culture. Retirees can enjoy activities with people in their own age group, too, since nearly a third of the people living in Solvang are above the age of 65. Another enticement for retirees moving to Solvang is the 24-hour emergency medical care center, the Santa Ynez Valley Cottage Hospital, reassuring locals that medical care is available around the clock.

However, retirees moving to Solvang would need to pay extra for the privilege. As noted by BestPlaces, an average home in this town of Danish delights costs $1.12 million, which is a whopping 228.9% higher than national average. Even when you compare a Solvang residence to the California average, which sits at $733,500, the price is 51.6% higher. If you're planning to rent in Solvang, your retirement income would also need to be substantial, because the average rent for a two-bedroom apartment in America's Danish Capital is $2,450. Since it's not recommended to spend more than 30% of what you make on rent, a monthly income of $8,167 or more would be needed for a comfortable lifestyle. Other factors, such as entertainment and festivities, can also drive up your cost of living.

Apart from housing, Solvang comes with two assets that can make it easy to overspend. First, there's Christmas. Americans already spend plenty at Christmas time, with Gallup News noting that many expected to pay more than $1,000 for Christmas gifts alone in 2024. And the town of Solvang takes this holiday very seriously all month long. This can be enjoyable, but it's quite easy to break the bank by shopping at high-end boutiques and buying customized gingerbread houses and uniquely crafted ornaments. Second, Solvang is in the heart of California's wine country. That's a big plus for wine drinkers, but Solvang's high-quality options can make it easy to go beyond the budget.

Retirees who can sell a home to put down a large down payment on a Solvang property might find this charming town more affordable — and, for most people, selling a home in retirement doesn't affect Social Security (but check with your financial advisor first). If that strategy works, then retiring in Solvang might be doable because non-housing costs aren't as far out of line. According to Area Vibes, food costs came in at 7% above the national average — but 5% below the average in California. Goods and services (like getting haircuts, buying toothpaste, or going out for a movie) came in 5% above the national average and 5% below California's average. The health care cost average is 7% below the national amount and 15% below California's.