As the baby boomer generation continues to age, millions of Americans are due for retirement. Every day, roughly 10,000 U.S. residents turn 65. However, a record number of people 65 and older are remaining in the workforce because of financial insecurity. The number of seniors who continue to work has more than doubled since 2000.
Many senior citizens do not have the luxury of choosing where to spend their retirement. This could be because they depend on younger family members or because relocating is too expensive. Those who choose to exit the workforce and rely on their savings, pensions, and social security face different financial burdens depending on the state where they spend their golden years.
In one state, a retired couple can live comfortably on just $36,000 a year. In another state, the same standard of living costs as much as $56,000. A person who retires at 65 and lives 20 more years could need an extra half a million dollars for living expenses depending on which state they are in.
While many categories of expenses are roughly the same for all Americans regardless of age, retirees can expect some differences in their monthly budget. For example, according to the Bureau of Labor Statistics’ Consumer Expenditure Survey, Americans 65 and over spend 34.3% more per year on health care than the average U.S. consumer. They also, as might be expected, spend far less on what are often major expenses for younger Americans, such as education and childcare.
In order to determine what it costs to retire in every state, 24/7 Wall St. reviewed annual expenses at the state level as determined by the Bureau of Labor Statistics’ 2017 Consumer Expenditure Survey. We then reviewed data from the Economic Policy Institute’s Family Budget Calculator for a couple 65 or older with no dependents, which measures the income a family needs in order to attain a modest yet adequate standard of living at the metropolitan level. Using the Consumer Expenditure Survey’s differences in budgetary needs between the average American and residents 65 and over, 24/7 Wall St. calculated the average annual retirement costs by state.