The average American’s lack of savings paints a fairly discouraging picture of retirement.
A GOBankingRates survey found that 40% of Americans have less than $300 in savings – putting a crimp in retirement funds. Many Americans see themselves working past age 65 out of financial necessity, according to the Pew Charitable Trusts, with some people planning to never retire at all. The pandemic also threw some people’s futures into question, especially those who had to draw from retirement savings during job loss or furlough.
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But the amount of money you need to retire depends on where you live, due to state-by-state differences in the cost of living. In some areas of the country, a nest egg of a bit more than $500,000 may be sizable enough for retirement. In other regions, you have to build up your savings even more to reach at least $1.8 million in retirement funds.
To find out exactly how much you need saved to retire, GOBankingRates calculated annual expenditures for a retired person in every state after deducting Social Security income, based on data from the Bureau of Labor Statistics and the Missouri Economic Research and Information Center. The study assumed that you would draw down your savings by 4% every year to cover your living expenses, and states were ranked from the smallest nest egg needed to the biggest.
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GOBankingRates found that residents of many Southeastern and Southwestern states won’t have to put away nearly as much money for retirement, with states such Mississippi and Kansas requiring less than $550,000 in savings to retire. However, the residents of the Northeastern states aren’t so lucky — they claimed seven spots among the bottom 10 states for the cost of retirement.
To ensure smooth sailing in your golden years, make sure you’re using the right tools to save for retirement.
1. Mississippi
Annual cost of living: $39,633.31
Cost of living after using Social Security income: $20,213.83
How much you need in savings to retire: $505,346
2. Kansas
Annual cost of living: $41,155.84
Cost of living after using Social Security income: $21,736.36
How much you need in savings to retire: $543,409
3. (tie) Alabama
Annual cost of living: $41,821.94
Cost of living after using Social Security income: $22,402.46
How much you need in savings to retire: $560,062
3. (tie) Oklahoma
Annual cost of living: $41,821.94
Cost of living after using Social Security income: $22,402.46
How much you need in savings to retire: $560,062
5. Georgia
Annual cost of living: $42,250.15
Cost of living after using Social Security income: $22,830.67
How much you need in savings to retire: $570,767
6. Tennessee
Annual cost of living: $42,345.31
Cost of living after using Social Security income: $22,925.83
How much you need in savings to retire: $573,146
7. Missouri
Annual cost of living: $42,795.94
Cost of living after using Social Security income: $23,306.46
How much you need in savings to retire: $582,662
8. Iowa
Annual cost of living: $42,773.52
Cost of living after using Social Security income: $23,354.04
How much you need in savings to retire: $583,851
9. West Virginia
Annual cost of living: $43,059.00
Cost of living after using Social Security income: $23,639.52
How much you need in savings to retire: $590,988
10. Indiana
Annual cost of living: $43,106.57
Cost of living after using Social Security income: $23,687.09
How much you need in savings to retire: $592,177
11. Arkansas
Annual cost of living: $43,249.31
Cost of living after using Social Security income: $23,829.83
How much you need in savings to retire: $595,746
12. New Mexico
Annual cost of living: $43,296.89
Cost of living after using Social Security income: $23,877.41
How much you need in savings to retire: $596,935
13. (tie) Michigan
Annual cost of living: $43,439.63
Cost of living after using Social Security income: $24,020.15
How much you need in savings to retire: $600,504
13. (tie) Ohio
Annual cost of living: $43,439.63
Cost of living after using Social Security income: $24,020.15
How much you need in savings to retire: $600,504
15. Texas
Annual cost of living: $43,820.26
Cost of living after using Social Security income: $24,400.78
How much you need in savings to retire: $610,019
16. Louisiana
Annual cost of living: $44,248.47
Cost of living after using Social Security income: $24,828.99
How much you need in savings to retire: $620,725
17. Kentucky
Annual cost of living: $44,296.05
Cost of living after using Social Security income: $24,876.57
How much you need in savings to retire: $621,914
18. South Carolina
Annual cost of living: $44,533.94
Cost of living after using Social Security income: $25,114.46
How much you need in savings to retire: $627,861
19. Nebraska
Annual cost of living: $44,581.52
Cost of living after using Social Security income: $25,162.04
How much you need in savings to retire: $629,051
20. (tie) Illinois
Annual cost of living: $44,867.00
Cost of living after using Social Security income: $25,447.52
How much you need in savings to retire: $636,188
20. (tie) Wyoming
Annual cost of living: $44,867.00
Cost of living after using Social Security income: $25,447.52
How much you need in savings to retire: $636,188
22. North Carolina
Annual cost of living: $45,533.10
Cost of living after using Social Security income: $26,113.62
How much you need in savings to retire: $652,841
23. Wisconsin
Annual cost of living: $45,866.16
Cost of living after using Social Security income: $26,446.68
How much you need in savings to retire: $661,167
24. North Dakota
Annual cost of living: $46,723
Cost of living after using Social Security income: $27,303
How much you need in savings to retire: $682,577
25. Utah
Annual cost of living: $47,103.21
Cost of living after using Social Security income: $27,683.73
How much you need in savings to retire: $692,093
26. Minnesota
Annual cost of living: $47,579
Cost of living after using Social Security income: $28,159.52
How much you need in savings to retire: $703,988
27. Florida
Annual cost of living: $47,721.74
Cost of living after using Social Security income: $28,302.26
How much you need in savings to retire: $707,556
28. Montana
Annual cost of living: $47,912.05
Cost of living after using Social Security income: $28,492.57
How much you need in savings to retire: $712,314
29. South Dakota
Annual cost of living: $48,055
Cost of living after using Social Security income: $28,635
How much you need in savings to retire: $715,883
30. Virginia
Annual cost of living: $48,435
Cost of living after using Social Security income: $29,016
How much you need in savings to retire: $725,399
31. Idaho
Annual cost of living: $48,578
Cost of living after using Social Security income: $29,159
How much you need in savings to retire: $728,967
32. Pennsylvania
Annual cost of living: $48,768
Cost of living after using Social Security income: $29,349
How much you need in savings to retire: $733,725
33. Arizona
Annual cost of living: $49,102
Cost of living after using Social Security income: $29,682
How much you need in savings to retire: $742,051
34. Colorado
Annual cost of living: $50,101
Cost of living after using Social Security income: $30,681
How much you need in savings to retire: $767,030
35. Nevada
Annual cost of living: $50,576
Cost of living after using Social Security income: $31,157
How much you need in savings to retire: $778,925
36. Delaware
Annual cost of living: $51,338
Cost of living after using Social Security income: $31,918
How much you need in savings to retire: $797,957
37. New Hampshire
Annual cost of living: $52,289
Cost of living after using Social Security income: $32,870
How much you need in savings to retire: $821,746
38. Washington
Annual cost of living: $53,098
Cost of living after using Social Security income: $33,679
How much you need in savings to retire: $841,967
39. Maine
Annual cost of living: $54,716
Cost of living after using Social Security income: $35,296
How much you need in savings to retire: $882,409
40. New Jersey
Annual cost of living: $54,811
Cost of living after using Social Security income: $35,392
How much you need in savings to retire: $884,788
41. Vermont
Annual cost of living: $55,667
Cost of living after using Social Security income: $36,248
How much you need in savings to retire: $906,199
42. Rhode Island
Annual cost of living: $55,763
Cost of living after using Social Security income: $36,343
How much you need in savings to retire: $908,578
43. Connecticut
Annual cost of living: $57,856.06
Cost of living after using Social Security income: $38,436.58
How much you need in savings to retire: $960,915
44. Maryland
Annual cost of living: $58,997.96
Cost of living after using Social Security income: $39,578.48
How much you need in savings to retire: $989,462
45. Alaska
Annual cost of living: $60,473
Cost of living after using Social Security income: $41,053
How much you need in savings to retire: $1,026,336
46. Oregon
Annual cost of living: $61,900.28
Cost of living after using Social Security income: $42,480.80
How much you need in savings to retire: $1,062,020
47. Massachusetts
Annual cost of living: $64,232
Cost of living after using Social Security income: $44,812
How much you need in savings to retire: $1,120,304
48. California
Annual cost of living: $67,657
Cost of living after using Social Security income: $48,238
How much you need in savings to retire: $1,205,946
49. New York
Annual cost of living: $70,512
Cost of living after using Social Security income: $51,093
How much you need in savings to retire: $1,277,315
50. Hawaii
Annual cost of living: $91,970.21
Cost of living after using Social Security income: $72,550.73
How much you need in savings to retire: $1,813,768
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Jordan Rosenfeld, Jami Farkas and Alexandria Bova contributed to the reporting for this article.Methodology: In order to find out exactly how much you need to retire in your state, GOBankingRates found the annual cost of expenditures for a retired person in each state by multiplying the 65 year and older expenditures from the Bureau of Labor Statistics’ 2020 Consumer Expenditure Survey by the cost of living index for each state from the Missouri Economic Research and Information Center’s 2021 cost of living series. To find how much money a retired person would need to save, we divided each state’s annual expenditures, minus the annual Social Security income as sourced from the Social Security Administration’s Monthly Statistical Snapshot, March 2022, by .04, assuming drawing down savings by 4 percent each year to pay for living expenses. All data was collected and is up to date as of May 9, 2022.
This article originally appeared on GOBankingRates.com: Here’s Exactly How Much Savings You Need To Retire in Your State
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