A new study finds that seniors in 41 states are likely to outlive their retirement savings, with an average gap of $115,000 between retirement income and expenses.
Other expensive states cited in the study are Massachusetts, Rhode Island, Vermont, Louisiana, Connecticut, Arkansas, Mississippi, Arizona, New Hampshire, and Florida, with projected shortfalls ranging from $294,000 to $148,000.
“You need to remember that you may be living off less than what you made in salary when you were still working, plus factor in your housing expenses and do not forget about healthcare costs,” Argosy Wealth Management founder Eric Mangold told NTD.
Leading the 41 states at No. 51 are seniors residing in New York state who will need $1.12 million to cover lifetime expenses over 19.4 years of expected life in retirement, according to the study.
Lifetime expenses include health care, housing, and everyday essentials.
“To help successfully age in place, avoiding or better managing health issues is key especially for the 68 percent of Medicare beneficiaries with at least one chronic condition,” eHealth vice president of consumer enablement Whitney Stidom told NTD.
At No. 50, seniors in Hawaii will face even more in projected lifetime expenses of $1.74 million.
The study also found that seniors residing in the state of Hawaii have a longer life expectancy of 20.6 years in retirement, which increases their financial burden.
“What one doesn’t want to do is take drastic measures,” Mangold said. “The best course of action is to re-evaluate your situation so you can see what changes or moves you need to make to make your retirement plan as airtight as possible.”
Massachusetts at No. 46 and California at No. 47 have equally high estimated lifetime expenses of $1.31 million and $1.26 million, respectively, while Washington, D.C., at No. 49 and Alaska at No. 48 round out the top five most expensive places to age in place with shortfalls of $407,000 and $342,000, respectively.
One way for seniors to lower their lifetime expenses is to relocate to another state, according to Mangold.
The top five states in which seniors can expect to live in retirement with a surplus, according to the Seniorly study, are Washington, Utah, Montana, Colorado, and Iowa.
“States that are more expensive typically are that way due to taxes,” Mangold added. “I had a client paying more than $20,000 per year in property taxes in New Jersey. When they moved to North Carolina, they now pay less than $2,000 per year. That is a significant savings.”
New Jersey ranks No. 16 on the list with a $61,900 projected shortfall compared to North Carolina, which ranks No. 14 with a mere $41,000 projected shortfall. Florida landed at 37 with a $148,000 projected shortfall.
The views and opinions expressed are those of the interviewees. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. NTD does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. NTD holds no liability for the accuracy or timeliness of the information provided.
