The average U.S. employee believes approximately $1.8 million would be needed for a comfortable retirement, but only 37% are sure they can achieve this goal. This is slightly more than the $1.7 million estimation from last year. However, achieving this financial stability feels formidable to many, with just around a third confident of reaching this target.
Retirement savings needs can greatly vary by state. For instance, Ohio’s retirement savings requirement is less than a million dollars, a seemingly affordable retirement option. Contrarily, states like California and New York necessitate larger retirement savings often exceeding two million dollars due to their higher living costs. As life expectancies increase and healthcare costs rise, planning for retirement in these states can be quite challenging.
The specific retirement amount needed in each state is determined by examining annual expenses, including housing, food, utilities, and healthcare over an estimated period of 25 to 30 years, excluding social security earnings. Average yearly living expenses in Ohio are $53,308.20, leading to a retirement estimate of nearly $779,276.90. Conversely, average expenses in Texas are slightly lower, at $50,835.40, requiring an estimated retirement fund of approximately $748,872.75. However, higher living expenses in New York necessitate an annual sum of $68,556.50, translating to a retirement fund of about $1,005,788.50.
In terms of budget-friendly states for retirement, Ohio is ranked 17th, ahead of Texas and Kentucky, but behind South Dakota and Illinois. Ohio’s cost of living is significantly lower than the national average, making it a desirable destination for retirement due to affordable housing and various recreational activities for retirees.
Considering an annual budget of $53,308, $1 million in retirement savings would last about 18 years in Ohio. All basic expenses including housing, food, utilities, transportation, and healthcare are taken into account in this calculation. However, changes in lifestyle and inflation rate could significantly impact the sustainability of this budget.
Ohio, with an average retirement age of 63, offers several cities deemed as great options for retirement due to their affordable living costs and housing conditions. These cities provide various recreational activities and magnificent historical sites, adding to Ohio’s appeal as a retirement destination.
On a national scale, Hawaii, Massachusetts, and New Jersey are among the most expensive states for retirement, while West Virginia, Mississippi, and Oklahoma demand significantly lesser retirement savings. Wyoming, South Dakota, and Texas, by having no income tax, can greatly decrease living costs for retirees. It is important to carefully consider various factors including living cost, tax policies, healthcare facilities, and overall quality of life when selecting a retirement destination.
