Saving for retirement is a major concern for many North Americans, and new research shows how much more difficult it can be if you live in New York City.
According to a GOBankingRates study, New Yorkers would need to save an average of $1.27 million to cover their expenses over a 25-year retirement, which equates to approximately $50,997 per year after accounting for Social Security income.
The analysis was based on data from the Bureau of Labor Statistics and the Missouri Economic Research and Information Center, which calculated average annual expenditures for people over 65.
What is the most expensive state in the United States to retire in?
With these figures, New York is the fifth most expensive state in the nation to retire in.
In comparison, New Jersey requires $45,829 per year and Connecticut $43,697 to ensure a financially secure retirement.
The most extreme case is Hawaii, where nearly $88,000 per year is required, implying that even two million dollars would not be sufficient for a 25-year retirement in that state.
West Virginia, on the other hand, was regarded as the most affordable state for retirement, with annual expenses of only $27,803 after Social Security.
How much should you save for retirement?
Despite these figures, the average American is still far from meeting the recommended amounts for a comfortable retirement. According to a Northwestern Mutual report, the majority of citizens have less than $89,000 saved for this stage of life, indicating a concerning gap between many people’s financial realities and the demands of the cost of living, particularly in states like New York.
That is why retiring in New York is a nearly insurmountable financial challenge for most Americans, especially given that average savings are significantly lower than required.
Given this outlook, many people may be forced to reconsider their retirement destination or rethink their savings strategies sooner. While the dream of a comfortable retirement in the Empire State remains alive, economic realities are forcing many to consider relocating to a state with a lower cost of living.
