For many Americans, the prospect of retirement is a significant concern, affecting both those nearing this phase of life and those who have years ahead before exiting the workforce.
Determining the financial resources necessary for a stress-free retirement is a crucial part of planning. This requirement can differ greatly based on factors such as a retiree’s chosen place of residence and their income sources after retirement.
A recent report from GOBankingRates has outlined the financial expectations for what constitutes a “comfortable” retirement, excluding Social Security benefits, as well as highlighting the annual costs retirees may face in each state across the U.S.
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This analysis coincides with ongoing concerns regarding the sustainability of Social Security as a key retirement income source. Trustees of Social Security and Medicare have reported that if the Old-Age and Survivors Insurance and Disability Insurance trust funds were merged, they could fully fund scheduled benefits through 2034, a year earlier than previously estimated. After that period, funding could only cover 81% of benefits, implying a significant reduction in Social Security payments.
The GOBankingRates study established a “comfortable” retirement benchmark as having savings equal to twice the annual living expenses of an individual.
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According to the study, Hawaii emerges as the state requiring the largest savings to ensure a comfortable retirement at age 60 without Social Security income. Conversely, West Virginia stands out as the state with the lowest financial requirement for a similar retirement lifestyle.
The report detailed the hypothetical nest egg needed for a comfortable retirement at age 60 in each state, based on living costs. For example:
Alabama ($70,492 annual living cost): $1,409,839
Alaska ($110,457): $2,209,137
Arizona ($100,281): $2,005,627
Arkansas ($67,502): $1,350,045
California ($155,117): $3,102,333
Colorado ($114,744): $2,294,882
Connecticut ($105,428): $2,108,563
Delaware ($94,392): $1,887,834
Florida ($97,119): $1,942,374
Georgia ($86,005): $1,720,096
Hawaii ($186,062): $3,721,237
Idaho ($101,912): $2,038,236
Illinois ($79,736): $1,594,716
Indiana ($74,029): $1,480,575
Iowa ($71,373): $1,427,463
Kansas ($71,534): $1,430,672
Kentucky ($71,410): $1,428,204
Louisiana ($67,482): $1,349,639
Maine ($98,612): $1,972,231
Maryland ($101,991): $2,039,812
Massachusetts ($136,626): $2,732,517
Michigan ($73,780): $1,475,595
Minnesota ($88,321): $1,766,414
Mississippi ($65,523): $1,310,451
Missouri ($73,667): $1,473,335
Montana ($102,916): $2,058,322
Nebraska ($76,792): $1,535,846
Nevada ($103,661): $2,073,215
New Hampshire ($110,761): $2,215,216
New Jersey ($118,338): $2,366,765
New Mexico ($81,627): $1,632,542
New York ($105,619): $2,112,384
North Carolina ($86,857): $1,737,146
North Dakota ($78,734): $1,574,682
Ohio ($73,120): $1,462,391
Oklahoma ($69,161): $1,383,214
Oregon ($111,541): $2,230,814
Pennsylvania ($78,582): $1,571,642
Rhode Island ($109,811): $2,196,222
South Carolina ($81,586): $1,631,721
South Dakota ($81,949): $1,638,979
Tennessee ($81,474): $1,629,482
Texas ($81,985): $1,639,693
Utah ($110,623): $2,212,458
Vermont ($97,999): $1,959,971
Virginia ($96,141): $1,922,813
Washington ($126,952): $2,539,048
West Virginia ($64,715): $1,294,300
Wisconsin ($84,485): $1,689,700
Wyoming ($88,792): $1,775,841
A Gallup survey conducted in early June revealed that half of non-retired adults in the United States with retirement savings accounts believe they will have enough funds to live comfortably once they retire.
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Confidence levels dipped for respondents without retirement accounts, where only 31% felt assured of having adequate resources for comfortable retirement years.
