Retirement expenses vary significantly among American states, raising concerns amid anticipated Social Security reductions
No one can ignore the approaching golden years, whether it's a few decades or just a heartbeat away. The question of how much money one needs to have saved for a stress-free retirement is a significant factor in the planning process, and this can vary depending on factors such as living expenses, retirement income sources, and health care costs.
Recently, GOBankingRates published an intriguing study, delving into the retirement savings necessary to achieve a "comfortable" lifestyle without factoring Social Security income and considering each U.S. state's associated expenses for a retiree.
INCOME SHADOWS OVER SOCIAL SECURITY
Social Security, a common retirement income source, is experiencing potential future financing challenges. Social Security trustees recently reported that the combined Old-Age and Survivors Insurance and Disability Insurance trust funds would be able to pay 100% of benefits until 2034, a year earlier than last year's predictions. After that, the trust funds would only cover 81% of scheduled benefits, resulting in a compulsory 19% reduction for recipients.
COMFORTABLE RETIREMENT SAVINGS BY STATE
The retirement nest egg required for a comfortable lifestyle in each state at 60, absent Social Security, was calculated by GOBankingRates. Here are a few examples from their research:
- Texas:
- Annual cost of living comfortably: $81,985
- Total savings needed to retire at 60: $1,639,693
- Total savings needed to retire at 70: $819,846
- Utah:
- Annual cost of living comfortably: $110,623
- Total savings needed to retire at 60: $2,212,458
- Total savings needed to retire at 70: $1,106,229
- Vermont:
- Annual cost of living comfortably: $97,999
- Total savings needed to retire at 60: $1,959,971
- Total savings needed to retire at 70: $979,986
- Virginia:
- Annual cost of living comfortably: $96,141
- Total savings needed to retire at 60: $1,922,813
- Total savings needed to retire at 70: $961,406
These numbers demonstrate that having between roughly $1.6 million to over $2.2 million in savings is needed for a comfortable retirement at 60 without Social Security, depending on the state. The annual cost of living comfortably ranges from about $70,000 to over $110,000, depending on the state[5].
CONFIDENCE IN RETIREMENT SAVINGS
A recent Gallup survey found that half of non-retired American adults with a retirement savings account feel they will have enough to live comfortably in retirement. Confidence was lower among those without a retirement savings account, with only 31% expecting to have sufficient funds for a comfortable retirement[6].
Remember, these numbers are just estimates and can vary significantly based on individual circumstances. It's crucial to plan ahead and consult with a financial expert to tailor a retirement plan that fits your needs and goals.
Eric Revell contributed to this report.
[5] GOBankingRates. (2021). The Most and Least Expensive States to Retire.https://www.gobankingrates.com/retirement/most-least-expensive-states-to-retire/
[6] Gallup. (2021). Americans' Retirement Savings Outlook Faces Challenges.https://news.gallup.com/poll/348427/americans-retirement-savings-outlook-faces-challenges.aspx
- To achieve a comfortable retirement without factoring Social Security income, GOBankingRates suggests having savings of $1,639,693 to $2,212,458, depending on the state.
- The annual cost of living comfortably for retirement without Social Security varies across states, ranging from $70,000 to over $110,000.
- In a recent Gallup survey, half of non-retired Americans with a retirement savings account expressed confidence in having enough funds for a comfortable retirement.
- Confidence in having sufficient retirement funds was lower among those without a retirement savings account, with only 31% expecting to have enough.
- It's crucial to plan ahead, consult with a financial expert, and consider individual circumstances when deciding how much to save for a comfortable retirement.
