Retirement Savings: A State-by-State Breakdown
When it comes to retirement, the amount you need to save varies greatly depending on where you plan to call home. A recent analysis by GoBankingRates reveals that the cost of living in different states can impact your retirement savings needs by as much as $1.49 million.
The Highest and Lowest States
Hawaii tops the list, requiring a staggering $2.21 million to cover essential living expenses for 25 years after retiring at 65. On the other hand, West Virginia requires the lowest amount, with a minimum of $712,913 needed to cover the same basic costs.
Calculating the Estimates
The estimates are based on average annual living expenses for each state, using the most recent data available from the U.S. Bureau of Labor Statistics. By subtracting average Social Security income from the annual expenditures and dividing the remaining amount by 4%, GoBankingRates arrived at the minimum required savings for each state.
Factors Affecting Cost Differences
Housing is the primary driver of cost differences between states, but significant variations in health care, utilities, and transportation also play a significant role. Additionally, these estimates only reflect the bare minimum needed to retire and do not account for discretionary spending like travel or entertainment.
A State-by-State Look
Here’s a breakdown of the expected total needed for retirement at age 65 in each state:
Important Considerations
While these estimates provide a helpful starting point for savings, they’re averages and may not fully account for other factors like inflation, lifestyle changes, or unexpected expenses. It’s essential to consider these variables when planning for your retirement.
Planning for the Future
By understanding the cost of living in different states, you can better prepare for your retirement and make informed decisions about your savings. Remember, it’s never too early to start planning for your financial future.
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