Retirement Cost of Living Ranked by State

[flintnational]

This is a link to a USA Today article listing the annual cost of living during retirement for a couple living in each State. Their definition of the sample couple is shown below.

"We then reviewed data from the Economic Policy Institute’s Family Budget Calculator for a couple 65 or older with no dependents, which measures the income a family needs in order to attain a modest yet adequate standard of living at the metropolitan level. "

Per this article, Arkansas ($36K) is the least expensive place for a couple to retire and Alaska ($56K) is the most expensive.

"50. Arkansas
• Estimated annual retirement costs: $36,378
• Avg. annual earnings for 65+ households: $22,276 (8th lowest)
• Avg. annual homeownership costs for seniors: $11,112 (2nd lowest)
• Pct. residents 65+: 16.5 percent (19th highest)"

"1. Alaska
• Estimated annual retirement costs: $56,879
• Avg. annual earnings for 65+ households: $36,513 (the highest)
• Avg. annual homeownership costs for seniors: $19,260 (9th highest)
• Pct. residents 65+: 11.2 percent (2nd lowest)"

 

[Rianne]

19. Illinois

• Estimated annual retirement costs: $43,221
• Avg. annual earnings for 65+ households: $29,890 (10th highest)
• Avg. annual homeownership costs for seniors: $17,028 (15th highest)
• Pct. residents 65+: 15.2 percent (12th lowest)


Interesting. I'd like to see property tax averages. I bet Illinois in the top 5. Although my mom, passed at 93, was grandfathered into her property taxes.

 

[RunningBum]

I wouldn't even begin to use something like this to decide where to live. Property taxes and real estate vary pretty widely within most states, for one thing. Just because you can come up with numbers for something like this doesn't make it meaningful.

 

[gerntz]

I wouldn't even begin to use something like this to decide where to live. Property taxes and real estate vary pretty widely within most states, for one thing. Just because you can come up with numbers for something like this doesn't make it meaningful.

I doubt there's much you could do to make costs higher just about anywhere in the bottom 15 higher than those in the top 15, living style being the same. But yes, it wouldn't be the deciding factor for many.

 

[flintnational]

I wouldn't even begin to use something like this to decide where to live. Property taxes and real estate vary pretty widely within most states, for one thing. Just because you can come up with numbers for something like this doesn't make it meaningful.

I disagree. We are packing up as I type and headed to Arkansas! I suspect most retirees will also use the article to make their relocation decisions. Or, they may just see it for what it is, a set of data points.

 

[RunningBum]

I doubt there's much you could do to make costs higher just about anywhere in the bottom 15 higher than those in the top 15, living style being the same. But yes, it wouldn't be the deciding factor for many.

New York is #3. Maybe I'm wrong, but my impression is that there's an enormous difference between NY City and some (many? most?) parts of upstate NY. It would not surprise me if some of those places upstate are cheaper than the more expensive places in the bottom 15, but I'm not going to make the effort to try to back that up.

 

[Andre1969]

I don't want to sound too much like a trust fund baby, but to me at least, most of those data points seem too close together to make the choice, based only on financial numbers. Throw out Alaska and Hawaii, which are a bit of an aberration, and the range of the rest is only between $36-$50K per year, or a $14K gap.


Of course, to make up a $14K gap, you need to amass an extra $350,000, assuming a 4% SWR.


But, like others said, these are simply averages, and actual numbers can vary widely depending where you are in the state. For instance, I live in Maryland, rated #8 most expensive on that list, and always hear about how expensive the state is, and there's an old saying that nobody retire TO Maryland, only AWAY from it. But, I don't find it to be that bad. Maybe it's just because I got used to it, so I don't have the experience of anyplace else?

 

[Dtail]

One can live in a rough neighborhood in FLA or on Fischer Island/Naples, etc and the difference would be enormous. Nice stats but not that useful except as general data.

 

[flintnational]

The data was obtained from the Bureau of Labor Statistics, the Feds. It is for Metropolitan areas only and does not include rural data. Yes, there will be a wide distribution within each State. But, this is the actual costs for the "average retiree" as defined in the article. The States that most of us would think of as high cost or low cost seem to be confirmed by this data. And, yes you can live on less in a high cost State. But, the average retiree is spending more in high cost areas. Not a big surprise.

 

[ArkTinkerer]

As someone who lives in Arkansas, I can tell you the number is either low or high depending on where in the state you live. NW Arkansas is expensive. Live in a rural area is cheap. I live in Conway, where there is a state university and 2 private colleges and cost is about what they quote but I live a bit on the high side of that. Real happening place and I couldn't touch it for the cost of living in most of the rest of the country. Lots of shows and lecturers brought in from around the country at the local theater and then small performances by students. Also a great place if you like to hunt/fish/hike/motorcycle and the bicycle trails are improving. So, stay away or you might raise my cost of living!

 

[zinger1457]

Not perfect or totally accurate but a better tool where you can compare the cost of living between two cities (instead of states) is numbeo. https://www.numbeo.com/cost-of-living/

 

[Big_Hitter]

I wouldn't even begin to use something like this to decide where to live. Property taxes and real estate vary pretty widely within most states, for one thing. Just because you can come up with numbers for something like this doesn't make it meaningful.

yep

 

[imoldernu]

Apropos of nothing important, but something I learned. I always thought of a metropolitan area as having a relatively high income, so when I saw the methodology of the Cost of Living rank, I was thinking of Naperville, a higher income city, Near our previous home... So here's what I learned. :

In order to determine what it costs to retire in every state, 24/7 Wall St. reviewed annual expenses at the state level as determined by the Bureau of Labor Statistics’ 2017 Consumer Expenditure Survey. We then reviewed data from the Economic Policy Institute’s Family Budget Calculator for a couple 65 or older with no dependents, which measures the income a family needs in order to attain a modest yet adequate standard of living at the metropolitan level. Using the Consumer Expenditure Survey’s differences in budgetary needs between the average American and residents 65 and over, 24/7 Wall St. calculated the average annual retirement costs by state.

Numbers from City-Data:

Peru, IL Estimated median household income in 2016: $51,483
where we live today

Naperville, IL Estimated median household income in 2016: $116,482
61 miles away

Chicago Estimated median household income in 2016: $53,006
99 miles away

So... I learned that metropolitan areas are composites of high and lower incomes which level out the statistics. How does that work out in the metro area in your state. When I think high median income, I think of Los Angeles. CA.

Estimated median household income in 2016: $54,432

and for New York,New York:
Estimated median household income in 2016: $58,856

Live and learn.

So how does that work out in your state?

 

[Chuckanut]

I've been beating the drum for Arkansas for years. Now that the word is finally out, I hope a lot of people got in early before the rush

 

[braumeister]

Averages at a statewide level are pretty meaningless for most states. There is too much variation between cities, between city and suburban/rural areas, and even usually between parts of a single city.

 

[teejayevans]

One can live in a rough neighborhood in FLA or on Fischer Island/Naples, etc and the difference would be enormous. Nice stats but not that useful except as general data.

Like the 4% rule, it’s general guidance.

 

[gstillson]

It varies SO MUCH within a single state that this cost of living thing is a bit silly.

We are talking 100%+ more for housing costs in one area than another in a single state!

 

[HillCountry]

And you are never the average person. Besides, cost of living is just one factor. For me, it’s not an important factor.

 

[GravitySucks]

New York is #3. Maybe I'm wrong, but my impression is that there's an enormous difference between NY City and some (many? most?) parts of upstate NY. It would not surprise me if some of those places upstate are cheaper than the more expensive places in the bottom 15, but I'm not going to make the effort to try to back that up.

I'm up here in CNY. Houses, food, and entertainment are cheap, but taxes are high. I consider it a MCOL area.

 

[Midpack]

Not perfect or totally accurate but a better tool where you can compare the cost of living between two cities (instead of states) is numbeo. https://www.numbeo.com/cost-of-living/

With the usual disclaimer, this let's you compare side by side

https://www.bestplaces.net/compare-cities/?city=new_york_ny

Nice place to start, but even then large metro areas alone can vary substantially. I have been studying a large metro area since July and there are neighborhoods at 1/3 our house budget, and others at 3 times if we look hard enough. Most of cost of living is real estate prices and associated home expenses (prop tax, etc.), nothing else varies nearly as dramatically IME.

 

[MRG]

Geeze all I have to do is move 30 miles South and save a bunch of money. Go figure.

 

[W2R]

Louisiana is #30. Not as low cost as I might have thought!

• Estimated annual retirement costs: $41,107
• Avg. annual earnings for 65+ households: $23,089 (14th lowest)
• Avg. annual homeownership costs for seniors: $12,252 (6th lowest)
• Pct. residents 65+: 14.9 percent (7th lowest)

I listed my home ownership costs at $5,734 in that other thread, but that did not include utilities and was for a paid off home. I should check to see how they computed that number. My present house, which I call my Dream Home, is a very nice house in a good location!!!

My overall spending in 2018, including taxes (which I never specify here), was considerably less than $41,107.

I really don't get it! Maybe I should pat myself on the back, look insufferably supercilious, and tell everybody how much more frugal I am than others here, but that really isn't true....

 

[Teacher Terry]

W2R, I think one reason your budget is low is because you don’t travel. We spend 10-14/year on it. We also go to a lot of plays, shows, festivals, etc which costs money. So that’s probably one difference.

 

[gstillson]

If you live in New Orleans, do you really *need* to travel?

I mean, the world comes to you.

 

[ExFlyBoy5]

As someone who lives in Arkansas, I can tell you the number is either low or high depending on where in the state you live. NW Arkansas is expensive. Live in a rural area is cheap. I live in Conway, where there is a state university and 2 private colleges and cost is about what they quote but I live a bit on the high side of that. Real happening place and I couldn't touch it for the cost of living in most of the rest of the country. Lots of shows and lecturers brought in from around the country at the local theater and then small performances by students. Also a great place if you like to hunt/fish/hike/motorcycle and the bicycle trails are improving. So, stay away or you might raise my cost of living!

My first AF assignment out of tech school was for Little Rock AFB. I initially hated the idea, but when I realized it was only 8 hours drive from "home", I warmed up to the idea. Ultimately, I loved the assignment (6 years there) and enjoyed "cruising" up in Conway...there were *plenty* of young college gals for this young AF man to flirt with. Little Rock was great because it had much of the amenities of a larger city, but without the large population and traffic. Plus, there was fantastic outdoor activities that were very close by. Bottom line, if it was a little closer to DW's family...we would live there. Probably up in the NW part of the state though, since Little Rock has grown a little too much for me since I was there.