Retirees looking for an affordable place to settle down may want to rethink New York. According to WalletHub’s 2023 Best States to Retire ranking, the Empire State is the least affordable in the U.S., having earned a 50th place finish for affordability, due to its second-highest cost of living and third-highest tax rate.
Retirees beware: Even $1 million in retirement savings would only cover your living costs for about 14 years, a fraction of the 25 years or more retirement typically lasts. Even if you cross the Hudson River, New Jersey comes in second place as the most expensive state to retire.
The WalletHub report compared all 50 states across three main categories: affordability, quality of life and health care. The affordability metric used data from the U.S. Census Bureau and the Council for Community and Economic Research and looked at adjusted cost of living, general tax-friendliness and annual cost of in-home services, among other factors.
The top 10 most expensive states to retire in, according to WalletHub, are New York, New Jersey, Vermont, Massachusetts, Maryland, Washington, Connecticut, Maine, Illinois and Oregon.
Retirement will look different to everyone, and there are several factors to consider. While cost of living is often important, retirees may also think about how close they’ll be to family, access to health care and opportunities for social activities, Alan Castel, professor at the University of California, Los Angeles and author of “Better with Age: The Psychology of Successful Aging,” said in WalletHub’s report. He also noted the importance of regularly reviewing your budget and future financial commitments in retirement.
It may be necessary to re-evaluate spending habits and take advantage of senior discounts, as well as consider downsizing or minimizing certain costs that are no longer needed. To get the most out of retirement, it’s essential to look at the full picture and make informed decisions about where to live, as well as your future financial commitments.
For more insight into retirement planning, check out CNBC’s free Warren Buffett Guide to Investing, which distills the billionaire’s No. 1 best piece of advice for regular investors, do’s and don’ts, and three key investing principles into a clear and simple guidebook. You can also learn more about how much you need to save each month to have $1.7 million in retirement by age 65.