Christopher Alarcon, Wealth of Geeks
Northwestern Mutual’s 2024 Planning & Progress Study reports retirees who want to spend their golden years in comfort will need $500,000 more than in 2020. Over just four years, people’s “magic number” has jumped 53%.
Of course, retirement expenses vary, but the national average now looks closer to a million and a half dollars needed. That’s especially true if you hope to move to Hawaii, California, New York, or Alaska.
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Hawaii: The most expensive state for retirees
Hawaii, the island paradise, consistently ranks among the most expensive states to retire in. With average housing prices well above the national average and daily necessities, like groceries, up to 30% more expensive than on the mainland, you’ll need significant savings to make Hawaii your retirement dream.
Zillow reports that the typical home price in Hawaii was $861,040 in the first quarter of 2024. With a 4.5% sales tax applied in most counties, the average annual retirement expenses run to approximately $103,610, making the minimum savings for 25 years of retirement in Hawaii $2.05 million.
Massachusetts, California, New York, and Alaska are the next four most expensive states to retire in. However, cheaper options do exist.
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Wyoming: The most affordable place to retire
On average, homeowners in Wyoming spend less than 30% of their monthly budget on housing. Investopedia records that the state has low costs for both Medicare and living expenses, making it not only the most affordable but also one of the most popular states to retire in.
The median house price in Wyoming is one-third that of Hawaii at just $330,000, and with a sales tax of only 4%, it’s easy to see how retirees could live well in Wyoming on a tight budget.
If Wyoming isn’t your idea of home, Utah, Montana, Idaho, and Virginia rank as the next most affordable states for retirees.
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Retirement is changing
A 2022 Gallup study found people are retiring later, potentially reducing the number of years post-retirement without an income and the savings needed.
Retirees are much more likely to earn a small income from side gigs or part-time jobs than in the past, reducing the amount of savings needed.
The million-dollar retirement fund price tag for Hawaii doesn’t take into account investments that retirees may hold. Rental properties, stocks, and other financial products that produce income would reduce the need for such a large retirement fund.
Of course, the final puzzle piece is how much the person spends. Couples who are used to spending their wages frugally and living on a shoestring will find it easier to retire on less money, and for those who like to spend, start saving!
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Florida – The most popular retirement state
At 6%, Florida has a higher sales tax than both Hawaii and Wyoming, and the Sunshine State’s median house price is $472,200, in line with the national average.
The state attracts retirees from all over the country; even Michael Jordan is spending his golden years there. Jordan isn’t the only basketball legend to move to the Sunshine State; Shaquille O’Neal spends most of his retirement in his Orlando mansion.
However, Florida didn’t make the top ten list of affordable places to retire — it ranked 43rd. So what is the attraction?
“I asked my father why he retired in Florida,” says Face Dragon ‘s Greg Gaynor. “His answer is representative of many retirees. ‘It’s the weather. Every day is a sunny day, so you can take a walk, go to the beach, go to the bar. That’s what retirement is to our generation.’
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Where can you afford to retire?
The Federal Reserve reported in 2023 that approximately 28% of Americans have no retirement savings.
For most people, retirement is a careful balance of savings and expenditure; it’s about balancing the life they want with the life they can afford. Expenses that soon-to-be-retirees must take into account include:
• Accommodation expenses
• Living expenses
• Transportation
• Medical costs
• Travel expenses
The difference between these five factors makes a state more or less affordable for retirees. However, Florida proves that price isn’t everything.
Cost is an essential factor, but it’s not the only thing to consider when deciding where to retire. Prakash Kolli, finance and retirement expert of Dividend Power, says, “Before deciding, research essential criteria first, like taxes, health care access, property prices, and daily living expenses, but remember that this isn’t a holiday. Consider the things you do every day, local amenities like malls and restaurants, distance to loved ones, and, of course, pick somewhere with the weather you enjoy.”
Of course, retirement expenses vary, but the national average now looks closer to a million and a half dollars needed. That’s especially true if you hope to move to Hawaii, California, New York, or Alaska.
—————
Hawaii: The most expensive state for retirees
Hawaii, the island paradise, consistently ranks among the most expensive states to retire in. With average housing prices well above the national average and daily necessities, like groceries, up to 30% more expensive than on the mainland, you’ll need significant savings to make Hawaii your retirement dream.
Zillow reports that the typical home price in Hawaii was $861,040 in the first quarter of 2024. With a 4.5% sales tax applied in most counties, the average annual retirement expenses run to approximately $103,610, making the minimum savings for 25 years of retirement in Hawaii $2.05 million.
Massachusetts, California, New York, and Alaska are the next four most expensive states to retire in. However, cheaper options do exist.
—————
Wyoming: The most affordable place to retire
On average, homeowners in Wyoming spend less than 30% of their monthly budget on housing. Investopedia records that the state has low costs for both Medicare and living expenses, making it not only the most affordable but also one of the most popular states to retire in.
The median house price in Wyoming is one-third that of Hawaii at just $330,000, and with a sales tax of only 4%, it’s easy to see how retirees could live well in Wyoming on a tight budget.
If Wyoming isn’t your idea of home, Utah, Montana, Idaho, and Virginia rank as the next most affordable states for retirees.
—————
Retirement is changing
A 2022 Gallup study found people are retiring later, potentially reducing the number of years post-retirement without an income and the savings needed.
Retirees are much more likely to earn a small income from side gigs or part-time jobs than in the past, reducing the amount of savings needed.
The million-dollar retirement fund price tag for Hawaii doesn’t take into account investments that retirees may hold. Rental properties, stocks, and other financial products that produce income would reduce the need for such a large retirement fund.
Of course, the final puzzle piece is how much the person spends. Couples who are used to spending their wages frugally and living on a shoestring will find it easier to retire on less money, and for those who like to spend, start saving!
—————
Florida – The most popular retirement state
At 6%, Florida has a higher sales tax than both Hawaii and Wyoming, and the Sunshine State’s median house price is $472,200, in line with the national average.
The state attracts retirees from all over the country; even Michael Jordan is spending his golden years there. Jordan isn’t the only basketball legend to move to the Sunshine State; Shaquille O’Neal spends most of his retirement in his Orlando mansion.
However, Florida didn’t make the top ten list of affordable places to retire — it ranked 43rd. So what is the attraction?
“I asked my father why he retired in Florida,” says Face Dragon ‘s Greg Gaynor. “His answer is representative of many retirees. ‘It’s the weather. Every day is a sunny day, so you can take a walk, go to the beach, go to the bar. That’s what retirement is to our generation.’
—————
Where can you afford to retire?
The Federal Reserve reported in 2023 that approximately 28% of Americans have no retirement savings.
For most people, retirement is a careful balance of savings and expenditure; it’s about balancing the life they want with the life they can afford. Expenses that soon-to-be-retirees must take into account include:
• Accommodation expenses
• Living expenses
• Transportation
• Medical costs
• Travel expenses
The difference between these five factors makes a state more or less affordable for retirees. However, Florida proves that price isn’t everything.
Cost is an essential factor, but it’s not the only thing to consider when deciding where to retire. Prakash Kolli, finance and retirement expert of Dividend Power, says, “Before deciding, research essential criteria first, like taxes, health care access, property prices, and daily living expenses, but remember that this isn’t a holiday. Consider the things you do every day, local amenities like malls and restaurants, distance to loved ones, and, of course, pick somewhere with the weather you enjoy.”
