One of the reasons many Americans get up and go to work every day is to save some money for retirement. While Social Security payments can be a useful financial basis during retirement, they're often not enough to cover anything other than the most basic expenses, especially in times of financial uncertainty caused by the coronavirus pandemic. One of the best ways to prepare financially is through specific retirement accounts, such as IRAs or 401 (k) plans. These types of funds offer special tax benefits and often come with employer contributions.
Those who don't save enough and don't take advantage of options like these, or don't take advantage of them before they reach retirement age, may have to work after age 65 to pay their bills. Here's What You Can Do If COVID-19 Jeopardizes Your Retirement. The amount you need to save to comfortably cover expected expenses after age 65 depends on several factors. Many who work in the public sector, for example, can benefit from regular pension payments in addition to Social Security when they retire.
The amount of these pension payments varies by state and employer. Even in some of the most expensive places to retire, state subsidies can help fund the cost of retirement. These are the states that spend the most to finance the retirement of their residents. Life expectancy at age 65 in the state is 17.7 years, almost two years below the national average.
In addition, goods and services are approximately 14% cheaper on average in Alabama than across the country. With a warm climate and a relatively low cost of living, Arizona is an ideal state for many Americans to retire. Of the state's population, 17.6% of residents are 65 or older, compared to 16.0% of the total U.S. UU.
California has one of the highest costs of living of any state in the country, as well as one of the highest life expectancies. Goods and services are 15.4% more expensive in California on average than across the country, and the state's average life expectancy at 65 years is 85.7 years, almost a year and a half higher than the national average. Florida's warm climate makes it an ideal place for many Americans to retire. In fact, more than one in five residents of the Sunshine State is 65 or older, the second largest proportion of any state in the country.
The state's 65-year-old residents are expected to live an average of just over 85 years, about a year longer than the national average. Like many Midwestern states, Indiana has a low cost of living. Goods and services in the state are 10.7% cheaper than on average across the country. In part, as a result, a comfortable retirement is relatively inexpensive in the state.
Michigan residents are also less likely to have to work until retirement age. Only 33.5% of state residents age 65 and older earn a salary or salary, almost the lowest proportion in any state. However, for many, Social Security and savings aren't enough to live comfortably into old age. In Montana, about 38.1% of households of retirement age still earn a salary or salary.
Still, only 15.7% of Nevada residents are of retirement age, a lower proportion than in most states. New Hampshire has a higher cost of living than most states, especially because of higher housing and service costs. However, older people in the state appear to be more likely than most to have relative financial security, as only 5.5% of residents aged 65 and over live in poverty, compared to the national poverty rate for the 9.4% age group. This is due, at least in part, to the fact that a relatively high 42.6% of households aged 65 and over are still earning salaries.
The high costs are likely to help explain why so many New Jersey residents of retirement age are still working. Among households aged 65 and over in the state, 42.1% continue to earn salaries or salaries, well above the national average of 38.0%. Probably due in part to lower retirement costs, North Dakota residents are less likely to have to work until retirement age. Only 37.5% of households aged 65 and over earn wages or salaries, below the national average of 38.0%.
For many people in the state, those expenses can be covered, at least partially, through retirement savings and Social Security. Still, 36.0% of Ohio residents age 65 and older are still working. Retirement age adults in Pennsylvania are less likely to have financial difficulties than older Americans across the country. Only 8.3% of Pennsylvanians age 65 and older live below the poverty line, a proportion lower than 9.4% of older adults across the country.
South Carolina has a relatively large elderly population, with 17.7% of its total population, the tenth highest proportion among states. It also has a relatively affordable housing market, with below-average monthly property costs for seniors, with and without mortgages. Probably partly as a result, about 85% of the state's population aged 65 and over own the homes they live in. With relatively low living costs for other goods and services, the total expected spending for retirees in the state is one of the lowest.
Still, older people in South Dakota are more likely than average to have to work until retirement age. Of state residents age 65 and older, 44.6% earn a salary or salary, a higher proportion than 38.0% of adults of retirement age across the country. The state's low cost of living could help explain why a lower than average proportion of state residents continue to work after reaching traditional retirement age. Only 36.2% of retirement-age households in Tennessee continue to earn a salary or salary, down from 38.0% of the national share.
Older Texans are also more likely than other older Americans to have financial difficulties. Of the state's retirement-age population, 11.1% live below the poverty line, a higher poverty rate in the age group than in all but five states and well above the national rate of 9.4%. Despite higher retirement costs, savings and Social Security appear to be sufficient for a large portion of the state's retired population aged 65 and over. Only 35.8% of the state's retirement-age population works, below 38.0% of the national average.
Goods and services in Wisconsin are less expensive than in most other states and cost 8.1% less than in the U.S. The life expectancy of state residents who turn 65 is 19.7 years to 84.7 years, roughly in line with the national life expectancy of 65 out of 19.4 years. The result is that the state's expected lifetime retirement costs are slightly lower than those in the nation. It is important to note that these estimated costs are not a reflection of recommended retirement savings, since they do not represent any savings, interest or investment income, nor do they represent retirement income, such as pensions or Social Security.
Those who retire in Idaho can expect to spend less to live comfortably than those who retire in most other states. Keep in mind that the plan is likely to change over time as you approach retirement, depending on how much you can save and how your retirement goals change. While Hawaii's warm climate may make it an ideal state for many Americans to retire, it's also the country's most expensive state to retire in. Naturally, your retirement expenses will vary depending on countless variables, including the price of your favorite champagne and the annual property taxes on that lake house (if those things are on your vision board for retirement).
Here are typical retirement expenses so that people can control how much they're likely to spend and how much they need to budget for retirement. To increase your income, you can consider accepting a part-time job when you retire or looking for passive income sources to increase the money you have to spend in retirement. The state also has one of the longest life expectancies, at 65, from just over 20 years to about 85 years, meaning that older people who retire there should expect to spend more during their retirement years than the national average. This means that transportation costs can be a major factor in retirement spending, especially in early retirement.
After linking all your accounts, use your retirement planning calculator, which extracts your real data to give you as pure an estimate as possible of your financial future using Monte Carlo simulation algorithms. To get an idea of your potential retirement income, consider projected monthly Social Security withdrawals, retirement accounts, pensions, investments in real estate (such as a rental property) and any savings or part-time income. And those expecting a more comfortable and financially secure retirement should plan to save a little more. .