costs to retire "comfortably" in each state

[Ed B]

I don't feel like looking it up right now but I kind of suspect that these numbers for each state are simply a percentage of the state's median household income.

 

[FANOFJESUS]

We spend less than half of the number they listed.

 

[CardsFan]

We spend less than half of the number they listed.

And we spend about 40% more than the "average" for our state.

Which just goes to show, talking about averages for an entire state is pretty much a waste of time.

 

[Dtail]

And we spend about 40% more than the "average" for our state.

Which just goes to show, talking about averages for an entire state is pretty much a waste of time.

+1 We clearly spend more than the Florida average. If one lives in one of the many rural areas of FLA vs. Miami for example, there is a big difference in COL.

 

[timo2]

Seems quite high doesn't it? Even in the poorer states like Mississippi and Alabama and Louisiana it is still $50k+. I wonder if that is before or after Tax? We spend about $45k of REAL after Tax money in NE Florida per year to just break even, before discretionary spending and we do not have a mortgage.

I would also bet that the median of families in those states will be way below that in reality, especially the poorer ones I mentioned. So even pre-retirement living would not be considered "Comfortable" by their standards I am sure. Add the cost of going to work every day may push it even higher.

Based upon my past research before I retired, these amounts seem OK. For instance, around 2010 the Elder index came out with what amount of gross income was needed (by county) to stay off any sort of public assistance for the elderly. Those amounts were typically (IIRC) in the range of $40 to $55K per year. Add some inflation and some extra fun money, and the total seems to be in the ballpark for this summary.

edit: here is the aforementioned elder index, and I did not recall correctly. A spot check showed the annual minimum income to be in $35K to 45K https://www.ncoa.org/economic-security/money-management/elder-index/

 

[Bamaman]

I have yet to agree with such information on cost of living.

I also disagree with magazines when they rank states for quality of life, etc. So many of those in the top ten are HCOL states or states with houses that are just not up to my standards.

It'd be like living in Toronto in a $600K house. Such a residence might cost $100K where I live and just far, far below my standards for a home.

 

[HI Bill]

I have yet to agree with such information on cost of living.

I also disagree with magazines when they rank states for quality of life, etc. So many of those in the top ten are HCOL states or states with houses that are just not up to my standards.

It'd be like living in Toronto in a $600K house. Such a residence might cost $100K where I live and just far, far below my standards for a home.

Yes, in Hawaii, $600K would get you....a small to medium condo, and not even a starter house, except in the countryside. Except, you'd be in Hawaii, with near-perfect weather, and almost no significant natural hazards (unless you live on the rift zone or on the beach). Most of these articles rank quality of life, which isn't just about real estate for many people. If I wanted a mansion, I'd move somewhere where they were cheap. But I wouldn't like the areas, most likely!

Ironically, I've been looking for a very high-quality 1,200-1,500 sf house on Hawaii Island, and all of the houses I've found in those square footage ranges are cheaply built with 8-foot ceilings, and generally run $500-700K. Bump it to $1M, and you can get a 2,500-3,500 sf house, but also cheaply built. Bump it to $1.5M, and stick closer to 2,500, and now, you're getting closer to something with vaulted ceilings and walk-in showers that doesn't look like it was built in the 1970s. Sorry, a little off-topic again. My point was, I'd rather pay more for a nicer place in a higher quality of life area, than to live in a really large/nice house in an area I don't want to be.

 

[EastWest Gal]

The biggest problem is they use average for each state. It would much closer to reality if they broke it down city size, urban, greater urban area, rural, etc. Most states have some more expensive areas in large urban areas-Upstate NY vs NYC for example. If you leave NYC, the rest of NY is probably comparable to neighboring states.

Then they haven’t described household size-some retirees are single, and then there’s widows/widowers.

As a medical lecturer once said, the average human being has one ovary and one testicle. So no one is really “average”.

 

[NW-Bound]

Much of the difference in the cost of living between places is in the housing cost.

And even here, there's a huge variation within the same state. But of course, Hawaii is generally more expensive than California, which is more expensive than Arkansas. The numbers are interesting to look at for a rough comparison, nothing more.

 

[timo2]

The biggest problem is they use average for each state. It would much closer to reality if they broke it down city size, urban, greater urban area, rural, etc. Most states have some more expensive areas in large urban areas-Upstate NY vs NYC for example. If you leave NYC, the rest of NY is probably comparable to neighboring states.

Then they haven’t described household size-some retirees are single, and then there’s widows/widowers.

As a medical lecturer once said, the average human being has one ovary and one testicle. So no one is really “average”.

Totally agree. The only study I've seen that does that is that elder index that I posted earlier. It goes by each county in each state, for single and married.

To me, all the glitzy click bait articles is what I call 'retirement porn' for those that can not retire early. It's fun to look at but will never happen.

 

[W2R]

$57,964? Yeah right.

That would go a long way in New Orleans, much less in the boonies.

Typical Marketwatch article.

 

[aaronc879]

These articles are never worthwhile. It's all up to the individual. I live comfortably on less than $20K/yr with a mortgage. My parents live a couple blocks away. They have $60K+/yr of income(VA disabilty, pension, SS X2) and always say they feel poor. They have no mortgage and property taxes are under $2K/yr. Where's the money go. There are multiple other examples of people who live within a few miles of me who are on either end of the spending rate so it doesn't matter where you live.

 

[FreeBear]

Interesting, we usually budget and spend 15-30% more than what is "comfortable" in our state according to the article. The number stated, coincidentally, corresponds to our "survival" budget. We do have a mortagage and live in the HCOL part of the state.

Subjectively speaking, we live like kings! We ride our bikes all day and enjoyed grilled salmon dinners on the deck with an adult beverage. Life is good. It's just so amazing to not have to w*rk for a living!

 

[ckelly78z]

No doubt that a large metropolitan area will be much higher COL than a rural small town. We live on a 10 acre farm that is paid off, and have low overhead, from living somewhat frugally. We know many city folks who more than make up for our "cheapness" by living in the high rent district, constantly going out for dinner, and a ball game, wearing designer clothes, and driving new Teslas.

 

[foxfirev5]

Well I see that I'm above average at something.

 

[joeea]

And we spend about 40% more than the "average" for our state.

Which just goes to show, talking about averages for an entire state is pretty much a waste of time.

Are you not living comfortably?

 

[donheff]

DC shows up at #2, behind Hawaii. Probably good in comparison to states where there are lots of choices but compared to big cities we would have some competition.

 

[ShokWaveRider]

Seems we should be comparing QOL not COL.

 

[CardsFan]

Are you not living comfortably?

Did I say I was not?

Just pointing out, as others have said, an average for an entire state is meaningless. And certainly not EXACTLY what you need, as stated in the headline.

But, of course, the article is just MarketWatch click bait.

 

[Gumby]

The article addresses your criticism

Of course, these are statewide figures, so it may be that certain cities in the state where it’s pricier to retire in than others. For example, someone looking to retire in San Francisco is probably going to spend more than a person in other spots in the state (you can look up the cost of living for different cities here https://www.bestplaces.net/)

 

[Koolau]

Hawaii is expensive. Virtually everything is more expensive than (especially) the heartland. However, I think there is a flaw in the way the data may have been developed (or at least explained.) Since the article only hints at it, I'll assume that the data include a mortgage on an "average" home. Since homes/condos go for $500K to $1mil or so, mortgages would be very significant.

Now we get into philosophy. Is a mortgage an "expense" (like rent) or is it more an "investment" (like monthly contribution to a 401(k))? We could (and have, heh, heh) debated such questions many times in the past. I believe the article used the average Hawaii mortgage as an expense. In short, a mortgage means a lot of money is going out, but in reality, it's not all expense in most cases.

We don't have a mortgage and our expenses (due to living in Hawaii) are WAY less than the $117K suggested.

 

[carnivalday]

I think they said that's a "household" cost..unless I just misread/misunderstood..

I guess thats another reason why this article is so misleading. A household can be a single person, or it can be 6 people. The costs will vary widely.

My state says over $50,000 also. I just retired on half that amount, and am doing just peachy. House paid for, auto paid for, low taxes and Im putting in a pool in a few months. Theres just no broad brush for something like this.

 

[Andre1969]

It's interesting that DC is so high, but for the most part, there really aren't any ultra-cheap, rural places to live in DC, so you don't get the variation that you would in most states. Still, I wonder, if you were in DC, and you had your mortgage paid off, would it really be *that* expensive to live?


Groceries and other essentials tend to be more expensive, but a lot of things are within walking distance, or public transportation, so you could give up the car, if you wanted. Having a car in DC is probably very expensive, between insurance, higher fuel prices, and finding a place to park it, if you don't have off-street parking, and are in a more congested area. And from what I've seen of real estate listings, it seems like property taxes aren't *too* extreme. One kicker though, is that it seems like condo fees are high. The condos tend to be either high-rise, apartment style, which usually default to pricey, or converted row houses that, because of their age, and often only having maybe 2-4 units, have a high fee, as well.

 

[NW-Bound]

... We don't have a mortgage and our expenses (due to living in Hawaii) are WAY less than the $117K suggested.

Most retirees here do not have a mortgage, unless they carry one deliberately to follow an investment strategy. This means people here are asset-rich.

The average Joe counts on monthly income, and the article is written for him.

 

[joeea]

Did I say I was not?

You seemed to think spending more than the average required to be comfortable was unusual.

By definition, it's not.