Another calcuation - How much you need to Retire in Each State

[cyber888]

https://www.yahoo.com/finance/news/average-retirement-age-every-state-120000641.html

 

[RetiredHappy]

Whenever we come across articles like this, the numbers are pretty meaningless. Our idea of a comfortable retirement is very different from someone else's.

I looked at Nevada's number, $63,300 annual cost for comfortable retirement. Our home including HOA, utilities and insurance, without a mortgage is already $28,000 per year. This does not include money would we need to set aside for maintenance and repair, which could easily be another $3K to 5K a year. My health insurance before Medicare, at age 63 as in the report, would cost me about $20,000 a year. I don't qualify for ACA subsidized plan and I doubt someone who actually generates $63K of income would either. Food and auto would already blow through the $63K. We need about 3 times of that amount, including taxes, to be comfortable.

 

[W2R]

How much we spend in retirement, is such an individual thing! My spending so far in 12 years of retirement is generally lower than the amount they specify for Louisiana, and I am really not trying to be thrifty these days. But then, I am just one person and not a couple, and I have no dependents, I am on Medicare, and my house and car are paid off. All these factors and many more can affect what we spend in retirement.

 

[Yipper]

Whenever we come across articles like this, the numbers are pretty meaningless. Our idea of a comfortable retirement is very different from someone else's.

I looked at Nevada's number, $63,300 annual cost for comfortable retirement. Our home including HOA, utilities and insurance, without a mortgage is already $28,000 per year. This does not include money would we need to set aside for maintenance and repair, which could easily be another $3K to 5K a year. My health insurance before Medicare, at age 63 as in the report, would cost me about $20,000 a year. I don't qualify for ACA subsidized plan and I doubt someone who actually generates $63K of income would either. Food and auto would already blow through the $63K. We need about 3 times of that amount, including taxes, to be comfortable.

So you’re saying ~$189k/year is your number?

 

[racy]

We're way over on the right side of the bell curve for the "average cost of a comfortable retirement" in our state. But, then, I never wanted to be average

 

[braumeister]

The average cost of anything is meaningless when looking at most states.
IMO it would even be difficult to come up with a meaningful number when averaging across a single ZIP code.
Pure clickbait.

 

[ProGolferWannabe]

Whenever we come across articles like this, the numbers are pretty meaningless. Our idea of a comfortable retirement is very different from someone else's.

I looked at Nevada's number, $63,300 annual cost for comfortable retirement. Our home including HOA, utilities and insurance, without a mortgage is already $28,000 per year. This does not include money would we need to set aside for maintenance and repair, which could easily be another $3K to 5K a year. My health insurance before Medicare, at age 63 as in the report, would cost me about $20,000 a year. I don't qualify for ACA subsidized plan and I doubt someone who actually generates $63K of income would either. Food and auto would already blow through the $63K. We need about 3 times of that amount, including taxes, to be comfortable.

I completely agree about how everyone’s situation is different, but where I find these articles to be interesting and possibly useful, is for comparing relative costs. So if the average cost to retire in Alabama is listed as $50,000 and it is $75,000 in California, then as a starting point I can get the general perspective costs of retirement may run about 50% more in California. Having said that, I think you are basically correct in your thinking. Too many other variables from person to person.

 

[Car-Guy]

It's an easy read and somewhat interesting to me.. However, I found these two quotes odd.

'"Of course, to truly live a comfortable retirement takes more than desire -- it also takes a large chunk of cash."

"it takes more than $1 million to have a comfortable retirement in any state in America -- or over $2 million in the case of Hawaii and the District of Columbia"

But I didn't see where comfortable was defined. Maybe I missed it... The difference between what I think is comfortable and someone else's definition could be huge.

 

[Gumby]

Their methodology is unclear. I checked all the states down to Connecticut, and they are using withdrawal rates exceeding 5.5%, although each state is slightly different. The withdrawal rate for CT is 6.7% They may be adjusting for average retirement age in each state, but that would not be appropriate for what I perceive to be the target audience of the article - those who want to retire early. So, not a particularly helpful article.

 

[Out-to-Lunch]

I was amazed by how much detail they put in the methodology section:

Methodology: GOBankingRates looked at the average retirement age in every state, as reported by Money Talk News on Sep. 29, 2019, using data from the U.S. Census Bureau’s latest American Community Survey and compared it with the cost to retire in each state. To find the cost of a comfortable retirement in each of the respective states, GOBankingRates analyzed consumption expenditures of Americans aged 65 and older, based on data sourced from the Bureau of Labor Statistics' (BLS) Consumer Expenditure Survey 2019: (1) annual spending on groceries, defined as "food at home" by the BLS; (2) annual spending on housing, defined as "shelter" by the BLS; (3) annual spending on transportation, defined as ""Gasoline, other fuels, and motor oil" + "other vehicle expenses" by the BLS; (4) annual spending on healthcare; (5) annual spending on utilities, defined as "uilities, uels and other services" by BLS. These were then adjusted to every state's itemized cost-of-living index, sourced from the Missouri Economic Research and Information Center's 2020 Quarter 3 average annual cost-of-living index. After calculating total necessities expenditures, an additional savings buffer was calculated by assuming that total expenditures covers 80% of one's budget (50% for necessities and 30% for discretionary spending), with 20% left over for savings. All of GOBankingRates original data and analyses was conducted on Dec. 14, 2020.

 

[cathy63]

https://www.yahoo.com/finance/news/average-retirement-age-every-state-120000641.html

This guy publishes this same article every few months.
https://finance.yahoo.com/news/comfortable-retirement-cost-every-state-090000149.html
https://www.yahoo.com/news/average-retirement-age-every-state-090000680.html

In the past 9 months, he thinks the cost of retiring in CA has gone down by $385,411.85. That alone is enough to make me discount the rest of his numbers.

Here are the previous discussions on this series of articles.
https://www.early-retirement.org/forums/f28/cost-of-retiring-comfortably-in-every-state-99956.html

https://www.early-retirement.org/fo...ire-number-in-every-state-article-105440.html

 

[FANOFJESUS]

Whenever we come across articles like this, the numbers are pretty meaningless. Our idea of a comfortable retirement is very different from someone else's.

I looked at Nevada's number, $63,300 annual cost for comfortable retirement. Our home including HOA, utilities and insurance, without a mortgage is already $28,000 per year. This does not include money would we need to set aside for maintenance and repair, which could easily be another $3K to 5K a year. My health insurance before Medicare, at age 63 as in the report, would cost me about $20,000 a year. I don't qualify for ACA subsidized plan and I doubt someone who actually generates $63K of income would either. Food and auto would already blow through the $63K. We need about 3 times of that amount, including taxes, to be comfortable.

We only need about half of the amount they say. So it can vary a lot by each couple.

 

[Gumby]

I was amazed by how much detail they put in the methodology section:

I'll admit, I never made it that far down the page. But even if they are assuming 20% of the annual figure is savings (and why assume 20% savings if you're retired?), the withdrawal rate just to support expenses in Connecticut is still 5.4%, which I would consider unacceptably high.

 

[MichaelB]

I was amazed by how much detail they put in the methodology section:

This guy publishes this same article every few months.
https://finance.yahoo.com/news/comfortable-retirement-cost-every-state-090000149.html
https://www.yahoo.com/news/average-retirement-age-every-state-090000680.html

In the past 9 months, he thinks the cost of retiring in CA has gone down by $385,411.85. That alone is enough to make me discount the rest of his numbers.

Here are the previous discussions on this series of articles.
https://www.early-retirement.org/forums/f28/cost-of-retiring-comfortably-in-every-state-99956.html

https://www.early-retirement.org/fo...ire-number-in-every-state-article-105440.html

Thanks for providing some context and reference to previous threads. Even a little can go a long way in helping a discussion find some relevance.

 

[bobandsherry]

Funny.... Shows cost to retire in Illinois is less than Florida. As a transplant from Illinois I know that's not right. While I figured numbers are meaningless I thought maybe directionally could be useful as you compare vs states, but this shows that's not useful for even this purpose. Perhaps Illinois skewed with a lot of the rural areas vs major cities.

 

[Out-to-Lunch]

I'll admit, I never made it that far down the page.

Well, there are some small advantages to living in the alphabetically penultimate state!

 

[RetiredHappy]

So you’re saying ~$189k/year is your number?

Yes, pretty close. We have a fairly expensive country club golf membership and travel extensively.

 

[racy]

... the withdrawal rate just to support expenses in Connecticut is still 5.4%, which I would consider unacceptably high.

I thought the same when I looked at my state. Then I thought, if social security is taken into account then the w/d rate drops considerably.

 

[CRLLS]

Funny.... Shows cost to retire in Illinois is less than Florida. As a transplant from Illinois I know that's not right. While I figured numbers are meaningless I thought maybe directionally could be useful as you compare vs states, but this shows that's not useful for even this purpose. Perhaps Illinois skewed with a lot of the rural areas vs major cities.

Of course they are not right. In Illinois where there is such a difference in COL from one local to another, how can there be a single number that covers the whole state? There cannot. It must be the same in any other state where there are rural areas, urban areas and highly desirable vacation-like areas. I always take reports like this with a grain of salt.

 

[Exchme]

This guy publishes this same article every few months.
https://finance.yahoo.com/news/comfortable-retirement-cost-every-state-090000149.html
https://www.yahoo.com/news/average-retirement-age-every-state-090000680.html

In the past 9 months, he thinks the cost of retiring in CA has gone down by $385,411.85. That alone is enough to make me discount the rest of his numbers.

Here are the previous discussions on this series of articles.
https://www.early-retirement.org/forums/f28/cost-of-retiring-comfortably-in-every-state-99956.html

https://www.early-retirement.org/fo...ire-number-in-every-state-article-105440.html

Thanks, I knew I had seen this discussion before. As before, cost of living varies hugely depending on where you live within a state. Attractive parts of big cities go for a lot more than other places, so it's really pointless to average that with areas that don't have people with lots of money.

In other words, it's just clickbait.

 

[ncbill]

Whenever we come across articles like this, the numbers are pretty meaningless. Our idea of a comfortable retirement is very different from someone else's.

I looked at Nevada's number, $63,300 annual cost for comfortable retirement. Our home including HOA, utilities and insurance, without a mortgage is already $28,000 per year. This does not include money would we need to set aside for maintenance and repair, which could easily be another $3K to 5K a year. My health insurance before Medicare, at age 63 as in the report, would cost me about $20,000 a year. I don't qualify for ACA subsidized plan and I doubt someone who actually generates $63K of income would either. Food and auto would already blow through the $63K. We need about 3 times of that amount, including taxes, to be comfortable.

Remember everyone's eligible for subsidies, at least over the next couple of years.

A subsidized ACA plan would cost under $6,000 in annual premiums for someone with a mAGI of $63,000 in 2021 & 2022.

 

[RetiredHappy]

Remember everyone's eligible for subsidies, at least over the next couple of years.

A subsidized ACA plan would cost under $6,000 in annual premiums for someone with a mAGI of $63,000 in 2021 & 2022.

"everyone"? Not if one is making too much. I didn't look at the actual ceiling but we are already at 22% to 24% tax bracket each year and we cannot manage our income to make MAGI work to the ceiling.

 

[Bamaman]

The real question is what's a comfortable life. Being comfortable in one place is not necessarily the same as being comfortable in another.

And the cost of living can vary dramatically from place to place--even with cities in close proximity and in the same state.

We're in Georgia right now, and we find the cost of groceries to be substantially more than where we live. And the grocery chains here don't have great week to week sales.

We went on a overnight trip last week to the big city 90 miles north of us. We find the real estate prices there to be at least double that of our housing market. Property taxes are also twice our taxes, and four times as much if you're in the city limits. I had a free night in a hotel, but the prices of rooms has really skyrocketed the last 3 years to the point of almost being unaffordable.

Another issue is the standard of living in any given state. The northern third of our state has a very high standard of living, and so does the southern 20% along the Gulf Coast. In between very often has a marginal society with poor healthcare and poor standardized testing numbers for schools. This is not uncommon across the country with large states.

I've net to see any of the city to city or state to state comparisions to be anywhere close to accurate.

 

[Sunset]

Funny.... Shows cost to retire in Illinois is less than Florida. As a transplant from Illinois I know that's not right. While I figured numbers are meaningless I thought maybe directionally could be useful as you compare vs states, but this shows that's not useful for even this purpose. Perhaps Illinois skewed with a lot of the rural areas vs major cities.

Thanks, I was thinking it had value as a comparative thing, and was amazed:
IL $54K , HI $120K

Sure HI is expensive but that much more

 

[jr6035]

Whenever we come across articles like this, the numbers are pretty meaningless. Our idea of a comfortable retirement is very different from someone else's.

I looked at Nevada's number, $63,300 annual cost for comfortable retirement. Our home including HOA, utilities and insurance, without a mortgage is already $28,000 per year. This does not include money would we need to set aside for maintenance and repair, which could easily be another $3K to 5K a year. My health insurance before Medicare, at age 63 as in the report, would cost me about $20,000 a year. I don't qualify for ACA subsidized plan and I doubt someone who actually generates $63K of income would either. Food and auto would already blow through the $63K. We need about 3 times of that amount, including taxes, to be comfortable.

63k a year gets you basically free Healthcare with the ACA.