- Mississippi, Oklahoma, and Alabama have the lowest annual costs for a comfortable retirement.
- Hawaii, DC, and Massachusetts have the highest amounts for a comfortable retirement.
- Meanwhile, many Americans feel more pessimistic about retirement.
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Retirees looking to live comfortably may want to consider where they call home.
Mississippi leads the nation with the cheapest cost of a comfortable retirement at just over $55,000 annually, a new analysis by the personal finance platform GOBankingRates found. That's about $66,000 less than what it costs for Hawaii, the state with the highest amount.
GOBankingRates pulled from Bureau of Labor Statistics estimates for spending on food, health care, shelter, transportation, and utility costs to determine the annual retirement income necessary. The analysis added a 20% comfort buffer to arrive at the "comfortable" cost and doesn't include Social Security payouts, potential pension income, or interest earned on savings.
Oklahoma, Alabama, Kansas, and Iowa rounded out the top five after Mississippi. Meanwhile, Washington, DC, Massachusetts, California, and New York are the places where it costs more to retire comfortably.
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The south and midwest — which are home to the states with the cheapest cost of a comfortable retirement — have among the lowest regional price parities, which show comparisons of buying power across states and metro areas for a given year.
Additionally, the south and midwest's comparably inexpensive housing can help retirees stretch their dollars further. For example, the top five states where you can retire comfortably for less all have typical home values under or around $220,000, according to an analysis published in October by The Motley Fool.
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Alternatively, the typical home value in the states where it costs more to retire comfortably ranges from $425,011 in New York to $971,167 in Hawaii.
It costs $121,228 to retire comfortably in Hawaii, the only state with a six-figure amount. Hawaii's higher transportation costs, limited housing, and elevated costs of goods that need to be shipped contributed to these high retirement costs.
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The analysis comes as inflation continues to weigh on Americans' wallets nationwide, leading many to feel more pessimistic about meeting their retirement goals.
A recent analysis by investment firm T. Rowe Price suggests that to retire comfortably, Americans need to save around seven to 13 times their annual salary by age 65. Meanwhile, 64% of workers say they will have enough money to last through retirement, according to the Employee Benefit Research Institute's 2023 Retirement Confidence Survey.
Whatever Americans can save for retirement, though, may go a lot further in Mississippi or Oklahoma than Hawaii or DC.
Are you looking to retire in a cheaper state? Contact this reporter at [email protected]
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