Cost of Retiring Comfortably in every State

[cyber888]

Saw this article. Agree or Disagree based on your State. Im in NC and that number is ok.

https://finance.yahoo.com/news/comfortable-retirement-cost-every-state-090000149.html

 

[Another Reader]

The usual clickbait...

Averages are meaningless in California. Do you live in the Bay Area or Fresno? Quite a difference...

 

[ShokWaveRider]

Clickbait maybe, but fairly accurate clickbait in my experience of looking around over the years.

Note how most of the lower numbered states with the exception of a few are less desirable places to live. They would have to be cheap in order to convince folks to move there. Again, one gets what one pays for.

 

[aaronc879]

The number is way too high IMO. I have lived a comfortable life for well under half what they say I "need". I have a mortgage now and won't when retired so that makes their number even more crazy. I know many people who are retired on well less than half their number and are comfortable. I am talking about single people though, not couples.

 

[braumeister]

The usual clickbait...

Averages are meaningless in California. Do you live in the Bay Area or Fresno? Quite a difference...

Statewide averages are meaningless in most states.

 

[MichaelB]

Statewide averages are meaningless in most states.

+1

Lifestyle > family size > location would be how I rank things that affect the cost of retirement.

 

[DayDreaming]

I live pretty comfortably on about 1/2 of what is listed for New Jersey.

 

[Andre1969]

Interestingly, Maryland comes in at $81,310 per year, which is close to my goal, of $80K, that I've been shooting for in my FireCalc scenarios.

However, like most of these types of articles, the word "comfortable" is a somewhat vague term. What's comfortable to me might be downright luxurious to one person, and roughing it to another.

For awhile, I figured I'd be quite comfortable on $60K per year, but after I moved, I figured lets make it $80K, to be safe. The article cites housing costs as a major concern in Maryland. However, that's going to depend on where you live. Maryland isn't uniformly expensive. And, if you own your home free and clear, or have your mortgage close to being paid off, your housing costs will either be much lower, or will be in a few years.

Now in my case, my mortgage won't be paid off until I'm 79 years old. I want to retire when I'm 51, so the mortgage will be a big factor for most of my retirement. But, since it's fixed-rate, over time, inflation will ease the pain of it. Presuming I stay wisely-invested, that is.

I bought my first home, a condo, in 1994. By the time you threw the condo fee on top of the mortgage, the payment was a bit over $900 per month. Adjusting for inflation, that would be around $1558 per month now. But, if I had stayed in it, and kept the same mortgage, the total payment today would be around $1100-1200. I know property taxes went up some, and the condo fee, which was $119.58/mo when I first moved in, is around $300 these days.

Actually, if I had stayed in it, it would be paid off now. I got suckered into a high 9.625% interest rate when I bought it, at age 24, with a low income and not much credit history. I refinanced in 1999, to around 7.25% I think. And then in 2002 I refinanced to a 15 year mortgage at 5.5%. If I had stayed the course it would have been paid off in 2017, but knowing me, I probably would have refinanced again, once rates dropped even more, so I'd probably still have a small mortgage. I don't know what a 15 year average rate is nowadays. My 30-year, on the new house, is 3.875%, so I imagine you could get a 15 for around 3, or a bit less?

 

[ShokWaveRider]

The biggest cost in Hawaii is Real Estate, if one already owns a home, comfortable living is a lot less than specified. But using ~$1m and plus of one's stash on a home makes it a lot less doable, if not impossible at the specified numbers, unless one wants to live in a 4 x 4 shack.

 

[Midpack]

Statewide averages are meaningless in most states.

+2. The list is probably correct, but unlike many other big ticket expenses (cars) your real estate costs are a huge variable chunk of COL and you can control where you live and how much house you want or need. Rural areas can easily be a fraction of cities, and large metro area suburbs get cheaper and cheaper the further you get from city center. When I look at COL data, I look at housing costs, but I look at COL without housing more closely.

 

[Qs Laptop]

I'm living comfortably on much less than $62,000 in Minnesota, (in suburban Minneapolis) so I'd say the numbers are too high.

 

[joeea]

We're in Maine. The state average is pretty silly.

Maine is a big state, with an extremely wide range of possibilities. Without knowing specifically which part of Maine, it's impossible to define "comfortable" in any meaningful way. It would be easy to live on far less, if you were willing to relocate to some of the less expensive parts of Maine. If you want to lie in the more expensive parts, this amount would be inadequate for comfort.

Doesn't matter. We've never relied on state averages in our planning.

I haven't yet met the average person in the average town living comfortable on that average amount in Maine. Perhaps some day I will.

Agree or Disagree based on your State.

I guess: Disagree.

 

[EastWest Gal]

Statewide averages are meaningless in most states.

+3.

In PA, the article said transportation costs are high. Huh? Compared to what? The cost of walking, biking are the same everywhere. Gasoline is low-average compared to surrounding states. Philly's SEPTA system, Harrisburg's Capital Area Transit bus system, and Pittsburgh's Port Authority transit system all offer FREE transportation for folks 65 and over. I'm not sure how FREE = high cost.

Obviously whoever added the state by state commentary didn't do their homework.

 

[Senator]

I can say in MN, you can retire very comfortable if you do not work at all. Regardless of what your age is.

 

[gauss]

So I am guessing that the study assume that everyone is renting.

Would have been nice to see a spreadsheet with the 50 states' figures decomposed into their categories or at least a discussion of the methodology.

-gauss

 

[Rianne]

Illinois comes very close to what we spend/year within $2k or so. But we live downstate. Chicago/suburbs different story. It's an average. One could live in southern Illinois for far less than $59K and very comfortably. C-U is a University town with many free services, good/affordable transportation, many restaurants, grocery stores, entertainment options(football, basketball, concerts). Property taxes, awful, but fit in the budget.

 

[Chuckanut]

They do give the reader an idea of what 'comfortable' living means to them:

GOBankingRates looked at four factors in all 50 states and the District of Columbia: per capita spending on groceries, healthcare, housing and transportation. Then, the annual retirement income needed to cover these living expenses was calculated, with an additional 20% to account for the “comfortable” aspect of retirement.

Is an additional 20% enough? I guess it depends. If one is happy sitting on the front porch chatting with the neighbors, it might be to much.

OTOH, if comfortable means having a house cleaner, cook, gardener and a valet, plus several cars suitable for everything from a night out on the town to off road adventures, perhaps not.

 

[W2R]

The article is pure and utter trash IMO. Here's why I think that:

For all of Louisiana, the article claims that a comfortable retirement costs: $57,964.14 a year.

COL is far, far lower in most of Louisiana than it is in New Orleans. But even in New Orleans, city-data says that the median household income is $38,681, and the median per capita income is $29,183 .

So, all these people are living uncomfortable lives even while working for a living. Uh huh. Yeah, sure.

Needless to say, neither of us is spending anywhere near an average of $57,964.14/year in retirement. That's just plain ridiculous. Even including all the substantial one time expenses of buying (in cash) and moving into my Dream Home back in 2015, my average retirement spending is less than $57,964.14/year. I'd be hard pressed to identify anyone that we know here in New Orleans, retired or not, who is spending that much on average, even those who have housekeepers and season tickets to Saints games.

 

[GravitySucks]

Way to high for my part of NY.
State averages are pretty meaningless.
Sperling has my town as 100.8 on the us average, Brooklyn (100 time larger) is 235.6 on their scale

Just saw Sperling lists my village seperate of the town. 88.9 for village vs. 100.8 for town. Must be the low cost homes near the train yard pull the cost down. Or maybe they include the hobos that follow the rails and camp under the bridge.

 

[jkern]

Averages tend to be meaningless. It's a good reference to compare COL in different states.

 

[mountainsoft]

38. Washington - A comfortable retirement costs: $67,810.61 a year

I hope not. We've been living on less than $50K for the last several years and we're not even retired yet.

 

[karen1972]

The problem is the article didn't link to the website where they pulled the data. I know the link was posted on this forum somewhere as I had used it to pull up a few locations and I still have the table in an excel spreadsheet but no link.

This article assumes 20% over a couple w/ mortgage, but if they had linked to the actual data site you can see you can drill down by county and it is broken into single/married w/wo mortgage which is much more useful.

Jurisdiction	Household	HousingStatus	HealthStatus	Housing	Food	Transportation	HealthCare	Miscellaneous	IndexPerMonth	IndexPerYear
North Carolina, Durham County	Single Elder	Owner w/o Mortgage	Good	469	256	240	382	269	1616	19392
North Carolina, Durham County	Single Elder	Renter, one bedroom	Good	752	256	240	382	269	1899	22788
North Carolina, Durham County	Single Elder	"Owner w/
Mortgage"	Good	1342	256	240	382	269	2489	29868
North Carolina, Durham County	Elder Couple	Owner w/o Mortgage	Good	469	470	371	764	415	2489	29868
North Carolina, Durham County	Elder Couple	Renter, one bedroom	Good	752	470	371	764	415	2772	33264
North Carolina, Durham County	Elder Couple	"Owner w/
Mortgage"	Good	1342	470	371	764	415	3362	40344

 

[ShokWaveRider]

Yes of course one can live in "Their" own particular comfort zone for less. Others will require more. These reports tend to err on the upside which I personally think is wise.

One person's idea of comfort vs another's will vary. Typically those without the means specified (or those choose to live on less) will always disagree with those who have and choose to live on the numbers specified in these reports. That is human nature.

Personally from a retirement perspective it is a lot better to err on more than less, so as not be disappointed later. Personally I would much rather live in Hawaii on $100k a year than $50k. One's perception of "comfortable" would be a lot better.

The first reaction/default of any report like this is "Clickbait", it is a lot easier to post that than to seriously take into account one's own "Comfortable" living costs and applying them accordingly to each location they "may" imagine living in.

In our case we would spend all of the recommended ~$100k for our perception of comfortable living in Hawaii, assuming housing is taken care of. We could also live on $50k but would definitely not want to.

 

[Qs Laptop]

Another thing to notice is there isn't much difference in costs for the mid-band of states. You might need $1.35M over 20 years to live comfortably in one state and then 15 states down the list you might need $1.25M over 20 years. OK, that's $100,000 difference spread out over 20 years. That's not a whole lot in my book.

I guess I would use the list as a relative gauge for overall cost of living across the states, but I wouldn't use it as a guide to decide where I want to retire. I say pick your spot and figure out how to economize if needed. Don't pick a low cost state and then be miserably proud that it's not costing you as much to live there as somewhere else.

 

[ShokWaveRider]

I guess I would use the list as a relative gauge for overall cost of living across the states, but I wouldn't use it as a guide to decide where I want to retire. I say pick your spot and figure out how to economize if needed. Don't pick a low cost state and then be miserably proud that it's not costing you as much to live there as somewhere else.

(Highlighted by me) Absolutely so true, some of those LCOL states have miserly governments that do not invest in infrastructure for their residence and simply focus on LCOL, with or without proper amenities that one needs for a fulfilling life.