Research shows how much you need to retire in each US state

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Research shows how much you need to retire in each US state

Americans of all ages face affordability concerns, and high-income retirees especially feel the pinch — even though where they choose to live in their golden years has a big impact on their ability to live comfortably.

A study by MoneyLion analyzed the monthly savings needed for a comfortable retirement in every state after taking into account the national average costs for retired families, as well as what a retiree will have in Social Security and when the retiree starts saving for retirement.

The report found that the state with the highest cost of living for retirees was Hawaii, with an annual cost of $90,752 for necessities and $181,505 for comfortable living expenses based on the analysis.

After calculating Social Security income, MoneyLion estimated the annual cost of living as a retiree in Hawaii was $156,610.

To save enough money to pay for those living expenses in retirement, a person would have to save $5,800 a month over 45 years from age 20 before retiring at age 65, or $7,458 a month if they saved for 35 years from age 30, in Social Security income.

Those figures rise to $6,722 and $8,643 per month, respectively, without Social Security.

California had the second highest annual cost of living, which MoneyLion estimated at $73,387 for necessities or $121,879 for a comfortable cost of living metric that includes Social Security income.

Monthly savings would be $4,514 starting at age 20 or $5,804 starting at age 30 with Social Security, and that would rise to $5,436 and $6,989 without Social Security.

“The two biggest expenses that a retiree needs to look at are state income taxes and property taxes that will put a dent in your budget. That’s also why a lot of people are moving from places like California and New York, because, beyond the cost of living, it’s more expensive from a tax perspective,” Ted Jenkin, managing partner at Exit Wealth Advisors, told Exit Wealth Advisors.

The lowest-cost state analyzed in the report was West Virginia, with an annual cost of living of $29,059 and a cost of living of $58,117 per year, or $33,223 after Social Security income is calculated.

The monthly savings goal in West Virginia will start at $1,230 for those in their 20s or $1,582 for those in their 30s with Social Security income, and that will rise to $2,152 and $2,767, respectively.

Some states that were popular moving destinations were central to the cost of living analysis.

In Florida it was $44,170 for necessities or $88,339 for comfortable living expenses, dropping to $63,445 with Social Security income in the mix. Savings goals were $2,350 by 20 or $3,021 by 30, with Social Security to supplement those savings.

Tennessee and Texas were each slightly above the $38,300 mark for their cost of living, with a comfortable cost of living of just over $76,000 or just over $51,300 for Social Security.

“There’s a reason beyond climate why retirees are moving from high-tax states,” Thomas Aiello, the National Taxpayers Union’s vice president of state affairs, told FOX Business.

“States like Florida, Texas, and Tennessee offer no estate tax, no estate (“death”) tax, relatively little estate tax, and a generally favorable policy environment for taxpayers. That can result in thousands of dollars in annual tax savings compared to New York, California or Illinois.”