"Typical" Retirement Cost by State

[jazz4cash]

From Investopedia for discussion.
I gave it a quick read. Fairly reasonable assumptions, methodology, etc. It' probably a case where no one is "typical", like saying the typical family has 2.1 children.

The Typical Couple's Cost of Retirement in Every State—And the Nest Egg You'll Need to Afford It — Investopedia

A typical American couple needs about $1.16 million saved to retire comfortably—less per person than what a single retiree needs. The average retired couple spends about $84,000 a year, with Social Security covering less than $38,000 of that amount.

stocks.apple.com

 

[Koolau]

From Investopedia for discussion.
I gave it a quick read. Fairly reasonable assumptions, methodology, etc. It' probably a case where no one is "typical", like saying the typical family has 2.1 children.

The Typical Couple's Cost of Retirement in Every State—And the Nest Egg You'll Need to Afford It — Investopedia

A typical American couple needs about $1.16 million saved to retire comfortably—less per person than what a single retiree needs. The average retired couple spends about $84,000 a year, with Social Security covering less than $38,000 of that amount.

stocks.apple.com

Can't seem to access the story.

 

[TheWizard]

I find these types of articles to be pretty much useless.
Sorry...

 

[sengsational]

The costs by state don't mean too much because you can go 20 miles one way or the other and costs can be dramatically different. I'm thinking of housing, but also the cost of health insurance, car insurance and other things that you might not think would change, but do, and sometimes significantly.

The purpose of the article appears to be to shove as many ads at the reader as possible.

 

[Al18]

The article is from Investopedia, and typical click bait. The article says a couple needs $1.33M to retire in Hawaii or NJ. It assumes you only have SS and all you money is NOT invested and you withdraw 4% per year. I don’t think there’s anyone on this forum who has no investments and keeps their money in a checking account.

 

[TheWizard]

The costs by state don't mean too much because you can go 20 miles one way or the other and costs can be dramatically different. I'm thinking of housing, but also the cost of health insurance, car insurance and other things that you might not think would change, but do, and sometimes significantly.

The purpose of the article appears to be to shove as many ads at the reader as possible.

I use Brave browser, so no ads for me, but I'm sure you are correct...

 

[RetiredHappy]

The article is from Investopedia, and typical click bait. The article says a couple needs $1.33M to retire in Hawaii or NJ. It assumes you only have SS and all you money is NOT invested and you withdraw 4% per year. I don’t think there’s anyone on this forum who has no investments and keeps their money in a checking account.

Where in the article does it say that the money is not invested and only sits in checking account? 4% safe withdrawal assumes that money is invested at 50% to 75% in equities.

 

[Koolau]

The article is from Investopedia, and typical click bait. The article says a couple needs $1.33M to retire in Hawaii or NJ. It assumes you only have SS and all you money is NOT invested and you withdraw 4% per year. I don’t think there’s anyone on this forum who has no investments and keeps their money in a checking account.

I suspect if you had full SS (for a couple) plus 4% of $1.33M you could survive in Hawaii. The tricky part would be housing. Likely you'd have to rent and it wouldn't be a nice place for what you could afford. Of course, it would also depend where you lived. There are relatively "cheap" places you could own on Big Island but you might need to catch your own water and generate your own electricity.

 

[Al18]

The article does NOT mention investments at all. Pretty stupid from a site called investopedia!

 

[copyright1997reloaded]

Excluded from the analysis is state income tax on retirement income, potential long-term care costs, and possible exemptions on local property taxes that some jurisdictions offer to seniors.

I find this to be a problem with many "studies".

 

[Qs Laptop]

I thought that the expenses calculations were fairly reasonable for the "typical" retiree.

 

[CalBird]

Obviously people here are not “typical”.

 

[jazz4cash]

Where in the article does it say that the money is not invested and only sits in checking account? 4% safe withdrawal assumes that money is invested at 50% to 75% in equities.

I agree it doesn't say that. It uses the 4% guideline which implies a healthy dose of equities.

 

[COcheesehead]

Can't seem to access the story.

Me too. It’s a locked story.

 

[OK EE]

No taxes accounted for either (or at least not mentioned). Makes me wonder what else they missed.

 

[Al18]

Here’s a link to the article
https://www.investopedia.com/the-ty...the-nest-egg-youll-need-to-afford-it-11988341

The problem with this article is this an average or median cost. I know other retired folks who are living in NJ on a more modest income. I’ve read the average retirement income taxes in NJ is about $800. My NJ property taxes are on schedule to drop 50% this year.

I don’t see this info widely reported in the news

 

[FD1000]

I have been using the Brave browser for years, and it blocks most ads. I had no problem accessing the article.

Most articles are clickbait. This one is actually fairly decent.

The conclusion that someone needs about a $1.1 million portfolio is also reasonable. It is based on the 4% withdrawal rule, which suggests a portfolio value of roughly 25 times a person's annual spending gap after SS.

The 4% rule is a reasonable starting point and is typically associated with portfolios holding about 50–60% equities.

Of course, there are many other approaches and assumptions you can use. This is just one method. We could easily post another 2,000 different ways to estimate a retirement portfolio target, each producing somewhat different results.
The article wisely avoids getting into more complicated topics such as taxes, asset location (taxable accounts, traditional IRAs, Roth IRAs), sequence-of-returns risk (SORR), and many other retirement-planning variables. Its purpose is to provide a simple framework that the average person can quickly understand.

A more in-depth analysis is far more complex. You can read dozens of books and articles, use sophisticated planning software, and consult financial professionals, yet your projections will still be based on assumptions and will likely be off to some degree.

That's the nature of retirement planning: the future is uncertain, and all we can do is make the most informed estimates possible.

BTW, I retired with 26 times our annual expenses, not including our SS. Our intention was to never work.

 

[Steelpony]

Where I live neither SS, RMD’s or our munis are taxed plus after standard deductions that’s a lot of moola. As a flat tax my net can increases with increased taxes.

The Feds do what they do to all of us. They have progressive brackets where the more I make the more I pay but my net increases.

So my state tax is 4.25% and my effective Fed tax is around 6% on a six figure income with no contribitions to SS or medicare which were around 7.65% when I worked.

My point would be taxes are not a concern at all but my poor kids and grands…

 

[GenXguy]

4% WR increasing by CPI inflation annually will likely leave you squeezed over time and isn't realistic. Look at all the posts about peoples' supplemental Medicare insurance going up 20% to 35% in a year and similar homeowner's insurance increases. That's a big problem with the 4% rule.

Taxes are still a big concern - not just income tax of course. High property taxes, ever increasing sales tax rates, etc.

 

[jim584672]

4% WR increasing by CPI inflation annually will likely leave you squeezed over time and isn't realistic. Look at all the posts about peoples' supplemental Medicare insurance going up 20% to 35% in a year and similar homeowner's insurance increases. That's a big problem with the 4% rule.

Taxes are still a big concern - not just income tax of course. High property taxes, ever increasing sales tax rates, etc.

You should look at High Deductible G Medigaps. Fairly reasonable price wise.

 

[jim584672]

Well my state is deep burgundy, but I am not typical so it doesn't apply.

 

[COcheesehead]

It says 1.1m to 1.2m for Colorado. That sounds about right.

 

[GenXguy]

You should look at High Deductible G Medigaps. Fairly reasonable price wise.

I'm too young for anything Medicare yet, but my comment was more in regard with the price increases year over year being a lot more than would be factored in with the 4% rule.

 

[FREE866]

I find these types of articles to be pretty much useless.
Sorry...

So useless

 

[Gumby]

The most important thing is calculating how much you and your spouse will spend - not how much some hypothetical average couple will spend.

And I would note that the market for retirement locations is like any other market. The greater the demand the greater the price. I'm sure I could move somewhere cheaper, but I like it right here.