How much do you REALLY need to retire? A fascinating map shows the income seniors in each state need to live comfortably
- Retirement in Hawaii will cost more than twice as much as in Mississippi
- The average annual pension cost in all 50 states is $68,000
- Assuming 3 percent inflation, those retiring would need $3.5 million
Seniors looking to relocate may want to avoid Hawaii, as numbers show it’s the most expensive state to retire in.
According to a study by GoBankingRates, retirees in the Aloha State need $121,000 to live comfortably, compared to retirees in Mississippi who only need $55,000.
Washington DC, Massachusetts, California and New York were the second most expensive states to retire in, with an average annual cost of $94,000 across all four states.
After Mississippi, the four cheapest states were Oklahoma, Alabama, Kansas and Iowa, with an average cost of $57,000 per year.
In the United States, the average annual income required for comfort was $68,000.
According to a study by GOBankingRates, the average annual income required for comfort across the 50 states was $68,000
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Assuming an average inflation rate of 3 percent and assuming that the American retires now at age 65 and expects to live another 30 years, he would need nearly $3.5 million. These figures do not take into account the additional bonus of social security contributions.
The study took into account the costs of food, healthcare, housing, utilities and transportation to determine the average retirement income that would be needed for a comfortable retirement.
After calculating total consumer spending, an additional savings buffer was calculated, assuming that total spending consumes 80 percent of a budget, leaving 20 percent for savings.
The GOBankingRates study analyzed spending by Americans ages 65 and older based on data from the most recent Bureau of Labor Statistics survey.
Expenditure estimates were then adjusted for each state by scaling each cost category by its corresponding cost of living index value.
The study found that in Hawaii, the state with the highest pension requirements, about $121,000 annually would be needed to have a comfortable retirement. Pictured is an aerial view of Honolulu, Hawaii
According to a recent study from Northwestern Mutual, the average American expects to need $1.27 million to retire comfortably
Other studies have found that while many Americans recognize that such large sums of money are necessary to maximize their chances of a comfortable retirement, many simply do not have it.
According to a recent study by Northwestern Mutual, Americans estimate they will need $1.27 million to retire comfortably, but the average savings is just $89,300 – just 7 percent of the target amount.
However, according to the results, almost half of respondents – around 48 percent – admitted that they didn’t think they had saved enough money for the future they wanted.
Overall, the average American now believes they need to work until age 65 to be ready for retirement, up from 64 last year.