Retirement is supposed to be a time to kick back, put your feet up, and relax–unless, of course, you don’t have the finances to do so. According to a recent survey by Charles Schwab Americans think they need $1.8 million in savings to be able to retire comfortably, and if you think that sounds way over the top, we’ve got some (unfortunate) news for you–it’s not.
GOBankingRates, a site committed to educating people about their money, used data to find the annual cost of expenditures for a retired person in each state to find out which states you actually do need more than $1 million to retire comfortably, and New York unfortunately is one of them.
Thankfully, New York isn’t one of the most expensive states to retire in–those states are California, Massachusetts, and Hawaii. But it isn’t one of the most affordable states to retire in either–that would be West Virginia, Mississippi, and Oklahoma.
According to the study, the annual cost of expenditures for a retired person in New York come out to $73,140. With the cost of living index at 126.5, a retiree in New York would need $1,289,325 saved up to live comfortably for 25 years, and $1,548,739 saved up to live comfortably for 30 years.
And New York certainly isn’t the only state in which you’d want to have over $1 million saved up–fifteen other states require a savings account this high, including Alaska, Arizona, California, Colorado, Connecticut, Hawaii, Oregon, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, Rhode Island, Vermont, and Washington.
In order to find out exactly how much you need to save to comfortably 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’ 2022 Consumer Expenditure Survey by the cost of living index for each state.
Each state’s annual expenditures (minus the annual Social Security income) was then divided by 0.0333%, 0.04%, and 0.05%, assuming 20, 25, and 30 years of retirement.
U.S. News & World Report recently released its list of the best big cities to retire in 2024, and, to our surprise, New York scored in the top ten. And, considering NYC was also recently crowned the most expensive city in the country, along with this study, we’re thinking you may have to actually leave the city to retire comfortably.
Find the full study here.