Wednesday, July 24

Best and Worst States to Retire With Minimum Savings

Are you looking to relocate soon after you retire but you don’t have enough savings? 

Let’s be honest: we’re all worried about retirement. Especially with this inflation going on, that’s ruining our initial plans. But what can we do? If you’re one of those seniors that are lucky to have enough savings then you’re awesome and I want to sincerely congratulate you because there are not many people who can do that. But on the other hand, other seniors don’t rely that much on their savings and hope that Social Security payments will be their only source of income.

Statistics say that the average American will spend nearly $987,000 by the time they reach retirement age, according to national averages for senior spending and a lifespan at age 65 of 19.4 years. And those who desire a more luxurious and safe retirement should make plans to save a little bit more. Life expectancy and the cost of living may indeed vary from one state to another that’s why in our article we will try to show you state by state which one is the best but also the worst place where you can relocate after you retire.

What are the costs of retiring without worries?

Having a tranquil and comfortable retirement is every human being’s dream. You’ve worked for more than thirty years and now you deserve to relax and have fun. But how is this possible with so many taxes and skyrocketing food prices? Hard to answer. The precise amount of savings necessary to comfortably cover anticipated expenses beginning at age 65 depends on various factors.

For instance, many people who work in the public sector may get regular pension payments in retirement in addition to Social Security. By state and employer, these pension benefits come in different amounts. Furthermore, government assistance can assist in covering the expense of retirement, even in some of the most costly retirement locations.

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Photo by Mike Flippo from Shutterstock

1. Arizona

If you want to retire to a place with warm and nice weather for most of the year, then Arizona should be one of your first options. In fact, in the past few years, this state has become very popular among retirees. It’s even more popular than Florida! Statistically speaking, compared to 16.0% of the entire U.S. population, 17.6% of residents in the state are 65 or older.

In case you still decide Arizona is going to be your retirement destination, you must know that you will likely spend $1.134,482 on retirement, which is more than most states in the US. This is probably due, in large part, to the state’s high life expectancy. People who intend to retire to Arizona should be aware that the average lifespan beyond 65 is predicted to be an additional 20 years, nearly a year longer than the national average.

Moreover, the average monthly homeownership cost for senior citizens is around $410, which is the 15th lowest in the country.

2. Alabama

For more than 16% of the seniors, Alabama is their sweet home, especially in the southern part of the state. Gulf Shores, Orange Beach, and Fairhope are three of the most popular destinations for retirement in Alabama. For example, here all the senior residents need an average of $894,000 to live comfortably throughout their golden years. And this amount of cash is below the national average of about $1.1 million.

So if you’re worried that your savings won’t last long enough for all the years you have left, don’t fret because Alabama is also a tax-friendly state for retirees and Social Security benefits won’t be taxed! That’s good news. Additionally, in Alabama, prices for products and services are typically 14% lower than those nationwide.

If you’re in doubt about retirement and financial planning and need extra information on this topic, give this book a try! A light read, funny, and super easy to understand, this book can be found both in paperback and Kindle versions. Whatever suits you! 

3. Arkansas

I guess we’re on a roll with pointing out the fact that in most states that begin with the letter A, retirement is likely to be more enjoyable. Statistics don’t lie! Arkansas is the third state on our list that has welcomed a lot of seniors in the past few years. What’s not to like about Arkansas? Being one of the best states where elders can retire and live a good life, Arkansas offers its residents a low cost of living, which means you will pay less than 14% compared to other states for both services and goods.

In this state, the average monthly homeownership cost for seniors is around $355, which is the 4th lowest in the nation. In the past years, the senior population grew up to 16% compared to the years before the Covid-19 Pandemic.

4. Florida

In the past few years, Florida has become less popular with retirees, mainly for those who want to retire with minimum savings. Even though its climate is amiable (except for the tornadoes), and there is also a higher concentration of retirees, around 20% of the population compared to other states mentioned before, the overall cost of living got bigger and bigger now reaching $1,194,451 which is higher than the national average $1,134,687.

The average lifespan of 65-year-olds in the state is slightly over 85, which is about a year longer than the average across the country. Florida has the 21st-highest homeownership costs in the country, with an estimated average monthly cost of roughly $500. With all the information we have provided, do you believe you can manage a retirement lifestyle in Florida at this time? You’re welcome to leave us a comment in the comments section because we’re interested in your point of view.

5. California

California is one of the worst states in which to retire in America if you have little saved up because it is one of the most costly states in the country. Average prices for commodities and amenities are 15.4% higher in California than they are nationwide, while the state’s average life expectancy at 65 is 85.7 years, about a year and a half longer than the national average.

As a result, residents would require more money for their golden years in this state than in any other, but no more than you would need to live in Hawaii or New York, where you would require an average of around $1.4 million. Sheesh!  Additionally, the average cost of your monthly household expenses is somewhere around $560, which makes California the 11th most expensive state in the country.

6. Hawaii

While Hawaii is a nice destination for vacations, it is not a good place to move to when you retire. Due to the predicted $1,485,123 total cost of retirement, it is also the most costly state in the nation. Hawaii has an 18.1% higher average cost of goods and services than the rest of the country.

In Hawaii, the life expectancy at 65 is also higher than average. As a result, seniors in the state should anticipate needing around $1.5 million, which is significantly more than the $1.1 million national average, to live out their retirement in comfort. If you own a house in Hawaii the average monthly cost for it is going to be around $518 which is the 16th highest in the country.

What do you think about Hawaii? Do you happen to know any retirees in this area?

7. New York

If you want to wake up in a place that never sleeps but you also want to spend a fortune during your retirement years, then you probably guessed we talk about New York! The second most expensive state in the nation, New York isn’t exactly the home for many senior citizens.

The estimated total cost of retirement in New York is around $1,402,473, while the state’s average cost of living is 16% more than the national average.  The only good news for New Yorkers is that it placed 10th in overall quality of life and 16th in health care among the 50 states when it comes to retirement. Furthermore, the average cost for all the senior citizens who own a house in New York is around $700 per month, which is the 5th most expensive in the nation.

8. Illinois

According to the national average, it would cost around $1.1 million in Illinois to retire comfortably today. Housing expenditures are relatively high even if the state’s general cost of living is lower than average. The average monthly cost of homeownership for state citizens who are of retirement age is $609 without a mortgage and $1,458 with a mortgage, respectively, ranking ninth and fourteenth highest among states.

However, in the state of Illinois, the population of seniors over 65 reaches somewhere 15.6%.

9. Indiana

Indiana is a state with a low cost of living, similar to the following two states on the list, making it a good choice for retirees looking to stretch their monthly income to the maximum. The cost of products and services in the state is 10.7% lower than the national average.

A pleasant retirement is reasonably affordable in the state, in part because of this. 65-year-old Indiana citizens may expect to live another 18 and a half years on average, nearly in line with the national average. And the expected cost of $961,044, which is less than the average retirement cost throughout the nation, is what it will take to live comfortably during those years.

Furthermore, the average cost of homeownership for seniors is around $400 which is the 11th lowest in the country. I’d say this will make a good choice for your golden years. What do you think? Is Indiana suitable for your budget?

10. Iowa

In Iowa, the estimated cost of a pleasant retirement is $1,017,35, which is less than in other states and less than the national median of $1,134,687. Every household in the state that is retired earns $47,784 annually, which is less than the $61,559 national median income for households in that age range.

I would say that Iowa is a place where you could feel safe and happy throughout your retirement. Besides being a low-cost state, it also welcomes a lot of seniors annually creating various opportunities for them.

You’re in for some extra educational courses because now you have even more free time? Iowa is known for its town college and literary communities for active seniors who want to explore more but also maintain a great activity of their brains. After all, it’s never too late to learn new things!

Photo by Sean Pavone from Shutterstock

11. Mississippi

Is it true that Mississippi has the second-lowest cost of living? Yes, it is true, and different studies show that this is the state in which it is most affordable to retire and enjoy a comfortable retirement. Based on the average annual spending of households with 65 and older members, a comfortable lifestyle over those years will cost around $885,290 in Mississippi, whose life expectancy at age 65 is over 17 years to 82.6 years.

The average housing cost for families 65 and over with a mortgage in Mississippi is $968 per month, which is cheaper than the average housing cost for households in the same age range without a mortgage in a more pricey state, such as New Jersey.

12. Montana

More than 17% of the people who live in Montana are pensioners, making it another paradise on earth for seniors over 65. According to the average expenditures of Americans in that age range, adjusted for the cost of living in Montana and taking into consideration life expectancy, citizens of the state may anticipate paying just under $1 million to live comfortably in retirement, which is a little less than usual.

Social Security and savings, however, are often not enough for many people to live comfortably into their senior years. In Montana, roughly 38.1% of households with retirees still make a living through wages or salaries.

13. North Carolina

In terms of predicted retirement spending, North Carolina ranks among the bottom third of states with little over $1 million, due to its below-standard cost of living and below-average life expectancy. Because of this, it’s a fun place to live throughout your best years. One advantage of retiring in North Carolina is that the state provides tax reductions for seniors, so your Social Security, IRA, and 401(k) benefits won’t be taxed.

As opposed to the national median valuation of senior-owned homes, which is $217,000, North Carolina’s average home for seniors is valued at $171,500. For residents 65 years of age and older who fulfill certain income standards, the state additionally provides property tax discounts. I guess this is valid proof that North Carolina knows how to care about its senior citizens. Would you like to become one of them? Tell us in the comments section.

14. New Hampshire

Even though the cost of living might be higher compared to some of the states I’ve mentioned before, New Hampshire still has a pretty large population of senior citizens who are satisfied with their retirement finances without making huge efforts to survive. Among residents 65 and older, the poverty rate is only 5.5%, compared to the national average of 9.4%.

This is at least in part because a sizable 42.6% of households with adults 65 and older still work. Believe it or not, New Hampshire has constantly been ranked as one of the best places to retire over the past few years, with a reason!

15. Pennsylvania

Last but not least state on our list is Pennsylvania, a stupendous place to live if you’re a retiree with minimum savings. The eighth highest percentage of any state in the US, 18.2% of people are 65 years of age or older. The average retiree in the state will have to pay $1,083,509 in total for a decent retirement, which is nearly $51,000 less than the national average.

As compared to older Americans generally, Pennsylvanians in retirement are more unlikely to experience financial hardship. Only 8.3% of Pennsylvanians 65 and older live below the poverty line, which is a lower percentage than the national average of 9.4%.

That was the list! I hope this will help you sort things out to be happy and content in your golden years because, after all the time you’ve spent working, you deserve less stress and worries in your life.

And before you leave, if you enjoyed reading this article, you may also like this one: 10 Tips to Host the BEST Garage Sale in Your Neighborhood.

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