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A Tale of Two Cities

It was the best of times, it was the best of times. Or at least it was for homeowners in either New York City or San Francisco.

Two cities known for their storied histories, diverse cultures, and global influences, New York City and San Francisco are both very different from each other. One has the Golden Gate Bridge, Alcatraz, and a bustling Chinatown. The other has the Empire State Building, Central Park, and Times Square.

New York is known for high finance, exceptional retail shopping, and a fast-paced lifestyle. San Francisco, on the other hand, is known for its booming tech industry, international tourism, and a more laid-back lifestyle. Although comparing the cities would be fun, a post trying to do so may turn into a short novel (and also generate some unwelcome comments). After all, what would be the criteria? You could look at sports teams. The New York Yankees may be the most famous sports team in America, not to mention one of the most valuable, worth an estimated $3.7 billion. Meanwhile In the bay area, the Golden State Warriors are not only competing annually for NBA championships, they are also attempting to go down as the greatest dynasty in NBA history.

Depending on your profession, both cities provide ample job opportunities. Each city has a thriving economy, with over 30 Fortune 500 companies, in total, headquartered between the two (NYC having the majority). With San Francisco’s unemployment rate below 3% though, it’s hard to imagine anywhere else having more job opportunities. Then you could get into the entertainment industry, such as television shows and music groups. One has Friends, Seinfeld, and Sex and the City. The other has Full House, Monk, and Party of Five (I think New York wins this one). New York City brought The Beastie Boys, Fun, and Notorious B.I.G. into the limelight while San Francisco is to thank for The Grateful Dead, Journey, and Santana.

Rather than try to compare the two on subjective criteria, let’s look at some raw numbers instead. NYC data from here on out represents Manhattan, which is New York’s wealthiest borough.

They say that if you can make it in New York you can make it anywhere. Although that may be true for most places, the lone exception may just be San Francisco. Just as the home values have been dramatically rising in Manhattan and San Francisco, so too have the rents being charged by landlords. With a median rent of $3,200 in Manhattan, it is one of the priciest areas to live in the country. In fact, according to RentCafe, Manhattan is home to 16 of the 20 most expensive rental zip codes in the United States (on an average rental measure, not median). Manhattan also holds the #1 spot, with the Battery Park neighborhood commanding almost $6,000 on average. San Francisco (containing fewer zip codes) is home to three of the top 20. Although San Francisco may hold only three of the top 20 spots on an average rent basis, the median rent in San Francisco tops Manhattan’s, coming in at $3,950, according to current listings on Zillow. This is roughly 4 times the national median of $950. When comparing the median rent cost to the median income, rent takes up 58.3% of a person’s pay in San Francisco, while taking up a slightly lower 57.5% in Manhattan. Perhaps that famous saying should come with an asterisk and a note at the bottom.

Retirement Savings in Manhattan

In terms of retirement savings, Manhattan takes the cake. With an average 401(k) balance of $144,000, Manhattan’s average savings for retirement is $14,000 more than San Francisco’s, which has roughly $130,000 per individual. One explanation for the lower savings in San Francisco is the exceptionally high rent, people just don’t have much leftover after paying the bills. When specific neighborhoods are looked at within Manhattan, the upper east side dominates the field, with an average 401(k) balance of about $207,000. The upper west side, on comparison, has an average of $192,000, coming in a not-so-distant second place. The older folks living in the upper east side and the upper west side will also reap the benefits of saving during their working years, with people in their sixties having an average balance of $468,000 and $417,400, respectively. Below is a more detailed breakout among Manhattan neighborhoods.

Retirement Savings in San Francisco

The top neighborhood within San Francisco for retirement savings is the Marina District, yielding an average 401(k) balance of roughly $174,000. This shouldn’t be much of a surprise as this is one of the city’s wealthiest neighborhoods. The Castro/Noe Valley neighborhood surpassed the Sunset District for second place by less than $5,000, coming in with an average 401(k) balance of $157,000 and $153,000 respectively. Below are the details for San Francisco, broken out by neighborhood. In terms of retirement savings there is a little less volatility between the highest savers and the lowest savers within San Francisco than there is within Manhattan. And even though Manhattan residents appear to save more for retirement than San Francisco, both cities are doing far better than the average for the country.


One thing we all can agree on is that both are marvelous cities and no comparisons between the two are needed, or even relevant. And although expensive on the surface, the high cost of living in New York and San Francisco may be justified due to the tremendous opportunities offered, diverse cultures, and unforgettable experiences created.

Have any of you lived in New York City or San Francisco? Did you find that the cost of living outweighed the benefits of living there?

#retirementsavings #401kbalances #SanFrancisco #Manhattan