Friday, 22 February 2019
When it comes to retirement costs, do you know how much income you’ll need in order to live comfortably when you stop working?
The answer to that question depends heavily on where you live in the United States.
RELATED: Ask Clark: What is a life insurance retirement plan and are they recommended?
24/7 Wall St. calculated average annual retirement costs by state and ranked them from least to most expensive in a new list.
The findings show a stark $20,000 a year difference in cost of living between the state with the lowest estimated annual retirement cost (Arkansas at $36,378) and the state with the highest cost (Alaska at $56,879).
That can add up to be big bucks over time.
“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,” 24/7 Wall St. notes.
So with that in mind, here’s a look at where you can really keep your cost of living down in retirement…
1. Arkansas
• Estimated annual retirement cost: $36,378
2. New Mexico
• Estimated annual retirement cost: $36,628
3. Kentucky
• Estimated annual retirement cost: $36,680
4. Ohio
• Estimated annual retirement cost: $36,767
5. Michigan
• Estimated annual retirement cost: $37,844
6. Indiana
• Estimated annual retirement cost: $37,874
7. Nevada
• Estimated annual retirement cost: $39,043
8. Idaho
• Estimated annual retirement cost: $39,099
9. Mississippi
• Estimated annual retirement cost: $39,139
10. North Dakota
• Estimated annual retirement cost: $39,470
11. Iowa
• Estimated annual retirement cost: $39,491
12. Missouri
• Estimated annual retirement cost: $39,696
13. Utah
• Estimated annual retirement cost: $39,725
14. Texas
• Estimated annual retirement cost: $39,814
15. Wisconsin
• Estimated annual retirement cost: $39,870
16. Kansas
• Estimated annual retirement cost: $40,237
17. Alabama
• Estimated annual retirement cost: $40,780
18. Tennessee
• Estimated annual retirement cost: $40,855
19. South Dakota
• Estimated annual retirement cost: $40,923
20. Rhode Island
• Estimated annual retirement cost: $40,954
21. Louisiana
• Estimated annual retirement cost: $41,107
22. Oklahoma
• Estimated annual retirement cost: $41,296
23. West Virginia
• Estimated annual retirement cost: $41,696
24. South Carolina
• Estimated annual retirement cost: $42,224
25. Nebraska
• Estimated annual retirement cost: $42,386
See where the rest of the states rank here.
As you read this, you might be thinking, “Gee, that’s nice, but I don’t have a dime saved for retirement. I will probably work until I die.”
That’s kind of a bleak scenario. But the beauty of it is that you can change that scenario starting today.
Maybe you feel there’s no money to save with. If you feel you couldn’t possibly do a 401(k) because there’s no room for any savings, money expert Clark Howard talks about starting by saving just 1%.
That’s a scant one penny out of every dollar you earn.
Then, six months from now, bump your contribution up by just another 1%, and do it again in another six months.
After five years of that, you’ll be saving 10% of your pay before any employer match. But by doing it just 1% at time, you won’t notice much difference in your paycheck because it’s all baby steps.
See Clark’s investment guide for more details.