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Best And Worst States For Retirement In 2023: Savings And Geographical Considerations
(CTN NEWS) – Florida may not hold the top spot for retirement in 2023, and surprisingly, the best state to retire in isn’t located in the Southeast region either.
According to a recent study by Bankrate, Iowa claims the coveted position as the number one state to retire to this year.
Bankrate’s assessment of the most favorable retirement destinations relied on a comprehensive analysis, drawing data from various reputable sources such as the U.S. Census Bureau, the Tax Foundation, and the Centers for Medicare and Medicaid.
This analytical approach involved evaluating all 50 states across five distinct categories with differing levels of importance:
- Affordability (40%)
- Well-being (25%)
- Health-care quality and cost (20%)
- Weather (10%)
- Crime (5%)
Retirement Savings Falling Short of Million-Dollar Goal: Impact on Timing and Retirement Destinations
The realization that most individuals’ retirement savings fall significantly short of the coveted million-dollar goal is prompting Americans to reconsider both the timing and destination of their golden years.
Recent surveys highlight that a substantial number of people anticipate needing a substantial nest egg of at least $1 million for a comfortable retirement.
On a national scale, the average amount required for an individual to enjoy retirement without financial strain is approximately $967,000 in savings. This translates to an annual budget of roughly $74,000 for the typical American during their retirement phase.
While the aspirational target is $1 million, a multitude of Americans find themselves far from achieving this milestone. As per the National Institute on Retirement Security, the typical Gen-X household with a private retirement plan has amassed only $40,000 in savings.
Meanwhile, baby boomers, as reported by the Natixis Investment Managers, possess a median retirement savings of $120,000. The millennial generation fares even lower with a median account balance of $32,000.
The repercussions of inadequate retirement preparedness extend beyond the individual realm, extending to the nation as a whole, as highlighted by the Pew Charitable Trusts.
An alarming 56 million private-sector workers lack access to employer-sponsored retirement plans, contributing to a projected shortfall of $1.3 trillion for state and federal governments by the year 2040, as revealed in a recent study.
For both individuals and their families, the geographical location they choose for retirement can wield significant influence over their ability to savor a fulfilling post-work life.
Best And Worst States For Retirement In 2023
| Top 5 | Bottom 5 | ||
|---|---|---|---|
| 1. | Iowa | 50. | Alaska |
| 2. | Delaware | 49. | New York |
| 3. | W. Virginia | 48. | California |
| 4. | Missouri | 47. | Washington |
| 5. | Mississippi | 46. | Massachusetts |
Retirement Destination Considerations: Balancing Affordability, Amenities, and Future Sustainability
Delaware secured the second spot on the rankings due to its excellent healthcare services and minimal tax burden. The state’s residents relish remarkably low property taxes, and it stands out by not imposing taxes on Social Security benefits.
However, in stark contrast to Iowa, Delaware found itself in the 31st position on Bankrate’s affordability scale.
While Florida claimed the top position as the preferred retirement state in 2022, it has slipped to the eighth rank this year. Despite its alluring warm climate, the cost of housing in the Sunshine State tends to be quite steep.
As of June 2023, the median sale price for homes in Florida was recorded at $409,100 according to Redfin data.
Ultimately, your choice of a retirement haven will hinge on your individual priorities.
Although the economic viability of a potential retirement destination might hold great importance, you should also take into account other variables, such as available activities and proximity to family.
Furthermore, it’s crucial to contemplate the potential changes a place might undergo over time.
“Your decision should not merely reflect the present appearance, but also factor in the sustainability and long-term affordability of a location,” advised Larry Sprung, the founder of Mitlin Financial and an esteemed financial advisor to Bankrate. “Taking a comprehensive view is essential.”
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