The cost of living plays a significant role in determining how much money is needed for a comfortable retirement in different parts of the country. A recent study by GOBankingRates sheds light on the savings required for a 20-year retirement across the United States. According to the analysis, retirees in West Virginia need the least amount of savings, with an annual cost of living of $49,260.94.
After accounting for Social Security income, this figure drops to $27,123.82. To sustain a 20-year retirement in West Virginia, a total of $678,095.40 in savings is necessary. On the other hand, Hawaii emerges as the state requiring the most retirement savings.
The annual cost of living for seniors in Hawaii is $103,609.86, which reduces to $81,472.74 after factoring in Social Security. Retirees in Hawaii would need a substantial $2,036,818.40 in savings to maintain their standard of living. New Jersey ranks 37th in terms of retirement savings requirements.
Cost of living in retirement
The annual cost of living for seniors in New Jersey is approximately $63,773.25. When Social Security income is taken into account, this amount decreases to $41,636.13.
To retire comfortably in New Jersey, individuals would need around $1,040,903.40 in savings. The study conducted by GOBankingRates analyzed data from the Missouri Economic & Research Information Center and the Bureau of Labor Statistics Consumer Expenditure Survey. It took into account various expenses such as groceries, healthcare, utilities, transportation, and housing.
The average Social Security income was then subtracted from the total annual cost of living to determine the savings needed for retirement, assuming a 4% yearly drawdown. Financial experts emphasize the importance of thorough planning and understanding the fiscal requirements for retirement based on the cost of living in different regions. While some areas may require a nest egg of just over $500,000, others may necessitate savings of $1.5 million or more.
With markets experiencing volatility and economic uncertainty, many individuals are reassessing their retirement funds. The study’s findings provide valuable insights into the savings needed to ensure a comfortable retirement across different states in the United States.