To determine what it costs to retire comfortably in every state, 24/7 Wall St. calculated the amount of money the average retiree needs so it would last for the rest of his or her life using data from the Bureau of Labor Statistics, Bureau of Economic Analysis, and the Institute for Health Metrics and Evaluation. Our calculation was based on the average annual expenditure for U.S. residents 65 years and older in the third quarter of 2019 through the second quarter 2020 of $48,106, according to the BLS Consumer Expenditure Survey. We adjusted that figure by local cost of living, using state-level data on regional price parity in 2019 from the BEA and multiplied the result by 115% in order to reflect greater financial stability and comfort in retirement.
Finally, to determine the amount needed to last the average retiree for the rest of his or her life, we multiplied the adjusted annual expenditure figure by the number of years residents are expected to live at age 65, using state-level data from the Centers for Disease Control and Prevention’s National Vital Statistics System for 2018.
Data on the share of the population that is 65 and over, the mean annual earnings for 65+ households, the share of 65+ households with earnings, the 65+ homeownership rate, and homeownership costs came from the U.S. Census Bureau’s 2019 American Community Survey. All data are for the most recent period available.
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