Hawaii has emerged as the most expensive state for retirees, as revealed by recent analysis from GOBankingRates. The annual cost of living in these high-priced states reaches $65,795, requiring residents to have substantial savings of approximately $1,083,951 to retire comfortably. This analysis utilizes the latest cost of living data from the U.S. Bureau of Labor Statistics to provide insights into retirement expenses across the nation.
The states with the highest retirement costs often coincide with areas that have notably high housing expenses. Major urban centers like New York and California exemplify this trend, placing significant financial burdens on those seeking to settle in these regions. Hawaii, with its breathtaking landscapes and pleasant climate, continues to draw retirees despite its hefty price tag. In Massachusetts and California, retirees face a daunting task of amassing around $1.6 million each to cover their living expenses.
A comprehensive breakdown indicates that the cost of essentials such as housing, groceries, transportation, utilities, and health care over a 25-year period sums up to an astounding $2.21 million. This necessitates that retirees in 15 U.S. states need to be millionaires to simply meet the basic costs associated with retirement.
GOBankingRates' analysis employed a well-regarded financial strategy, known as the 4% rule, for safely drawing down retirement savings. This approach considers average Social Security income before determining the savings required to cover annual expenditures.