Americans face vastly different retirement costs across states as Social Security cuts loom
Retirement remains top of mind for many Americans, whether they are approaching their so-called 'golden years' or have many years to go before leaving the workforce.
How much money a person needs to have saved to retire without financial stress is an important consideration in the retirement preparation process, and that can vary depending on various factors, including where someone intends to live and their retirement income sources.
Advertisement
A study released this week by GOBankingRates calculated the amount of money that a 'comfortable' retirement would require without income from Social Security factored in and the associated yearly expenses a retiree would face in each U.S. state.
The analysis comes as Social Security, a common source of retirement income, is looking at potential financing issues with its trust funds in the future.
8 Pompano Beach, Florida.
Matthew Tighe – stock.adobe.com
The trustees for Social Security and Medicare recently found that if Social Security's Old-Age and Survivors Insurance and Disability Insurance trust funds were combined, the trust funds would be able to pay 100% of scheduled benefits until 2034, one year earlier than reported last year. After that, the trust funds would be able to pay only 81% of scheduled benefits, meaning Social Security recipients would see a mandatory 19% cut automatically.
Advertisement
For the GOBankingRates study, the benchmark for a 'comfortable' retirement was a person holding twice the amount of money as the cost of living expenses.
Hawaii tops the list of where the most savings would be necessary to retire 'comfortably' at 60 years old without Social Security, while West Virginia, nicknamed the Mountain State, required the least, it said.
8 For the GOBankingRates study, the benchmark for a 'comfortable' retirement was a person holding twice the amount of money as the cost of living expenses.
InsideCreativeHouse – stock.adobe.com
GOBankingRates found the nest egg that a person would need to accommodate a comfortable retirement at 60 years old sans Social Security in each state.
Advertisement
Alabama ($70,492 cost of living per year): $1,409,839
Alaska ($110,457 cost of living per year): $2,209,137
Arizona ($100,281 cost of living per year): $2,005,627
Arkansas ($67,502 cost of living per year): $1,350,045
Advertisement
California ($155,117 cost of living per year): $3,102,333
Colorado ($114,744 cost of living per year): $2,294,882
Idaho ($101,912 cost of living per year): $2,038,236
8 Aerial view of Nantucket Island.
Kevin – stock.adobe.com
Illinois ($79,736 cost of living per year): $1,594,716
Indiana ($74,029 cost of living per year): $1,480,575
Iowa ($71,373 cost of living per year): $1,427,463
Kansas ($71,534 cost of living per year): $1,430,672
Advertisement
Kentucky ($71,410 cost of living per year): $1,428,204
Louisiana ($67,482 cost of living per year): $1,349,639
Maryland ($101,991 cost of living per year): $2,039,812
8 Downtown Birmingham, Alabama, from Vulcan Park
Robert Hainer – stock.adobe.com
Advertisement
Maine ($98,612 cost of living per year): $1,972,231
Massachusetts ($136,626 cost of living): $2,732,517
Michigan ($73,780 cost of living per year): $1,475,595
Minnesota ($88,321 cost of living per year): $1,766,414
Advertisement
Mississippi ($65,523 cost of living per year): $1,310,451
Missouri ($73,667 cost of living per year): $1,473,335
Montana ($102,916 cost of living per year): $2,058,322
8 Waikiki Beach and Diamond Head, Oahu, Hawaii.
tomas del amo – stock.adobe.com
Advertisement
Nebraska ($76,792 cost of living per year): $1,535,846
Nevada ($103,661 cost of living per year): $2,073,215
New Hampshire ($110,761 cost of living per year): $2,215,216
New Jersey ($118,338 cost of living per year): $2,366,765
New Mexico ($81,627 cost of living per year): $1,632,542
New York ($105,619 cost of living per year): $2,112,384
North Carolina ($86,857 cost of living per year): $1,737,146
8 The Brooklyn Bridge and the Manhattan skyline.
jakartatravel – stock.adobe.com
North Dakota ($78,734 cost of living per year): $1,574,682
Ohio ($73,120 cost of living per year): $1,462,391
Oklahoma ($69,161 cost of living per year): $1,383,214
Oregon ($111,541 cost of living per year): $2,230,814
Pennsylvania ($78,582 cost of living per year): $1,571,642
Rhode Island ($109,811 cost of living per year): $2,196,222
South Carolina ($81,586 cost of living per year): $1,631,721
South Dakota ($81,949 cost of living per year): $1,638,979
8 Teton Village homes at sunrise with fog in the valley.
Nicole – stock.adobe.com
Tennessee ($81,474 cost of living per year): $1,629,482
Texas ($81,985 cost of living per year): $1,639,693
Utah ($110,623 cost of living per year): $2,212,458
Vermont ($97,999 cost of living per year): $1,959,971
Virginia ($96,141 cost of living per year): $1,922,813
Washington ($126,952 cost of living per year): $2,539,048
West Virginia ($64,715 cost of living per year): $1,294,300
8 The analysis comes as Social Security, a common source of retirement income, is looking at potential financing issues with its trust funds in the future.
lordn – stock.adobe.com
Wisconsin ($84,485 cost of living per year): $1,689,700
Wyoming ($88,792 cost of living per year): $1,775,841
In early June, a Gallup survey found 50% of non-retired U.S. adults that own a retirement savings account felt they 'expect to have enough to live comfortably in retirement.'
Confidence was lower among those that lacked a retirement savings account, with only 31% reporting they anticipated having sufficient funds for comfortable golden years.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Wall Street Journal
an hour ago
- Wall Street Journal
How to Steer Clear of a Social Security Iceberg
Your editorial 'The Social Security Iceberg Gets Closer' (June 20) rightly warns of the urgent need to address Social Security's looming insolvency. Doing nothing isn't an answer, yet Congress has become paralyzed by a false choice between raising taxes and cutting benefits. There's another path, which a group of bipartisan senators and I have outlined in what we call the 'Big Idea,' a practical update to how Social Security is financed. The reform can save the program not merely for today's seniors but also for our children and grandchildren.
New York Post
3 hours ago
- New York Post
Investors brace for oil price spike, rush to safe havens after US bombs Iran nuclear sites
A US attack on Iranian nuclear sites could push oil prices even higher and trigger a knee-jerk rush to safety, investors said, as they assessed how the latest escalation of tensions would ripple through the global economy. The reaction in Middle East stock markets, which trade on Sunday, suggested investors were assuming a benign outcome, even as Iran intensified its missile attacks on Israel in response to the sudden, deep U.S. involvement in the conflict. President Trump called the attack 'a spectacular military success' in a televised address to the nation and said Iran's 'key nuclear enrichment facilities have been completely and totally obliterated.' He said the U.S. military could go after other targets in Iran if the country did not agree to peace. Advertisement Iran said it reserves all options to defend itself, and warned of 'everlasting consequences.' Speaking in Istanbul, Iranian Foreign Minister Abbas Araqchi said Tehran was weighing its options for retaliation and would consider diplomacy only after carrying out its response. 7 President Trump called the attack 'a spectacular military success.' REUTERS Investors said they expected US involvement would cause a stock market selloff and a possible bid for the dollar and other safe-haven assets when major markets reopen, but also said much uncertainty remained. Advertisement 'I think the markets are going to be initially alarmed, and I think oil will open higher,' said Mark Spindel, chief investment officer at Potomac River Capital. 'I think the uncertainty is going to blanket the markets, as now Americans everywhere are going to be exposed. It's going to raise uncertainty and volatility, particularly in oil,' he added. One indicator of how markets will react in the coming week was the price of ether, the second-largest cryptocurrency and a gauge of retail investor sentiment. Advertisement 'We don't have any damage assessment and that will take some time. Even though (Trump) has described this as 'done', we're engaged,' Spindel said. Ether was down 8.5% on Sunday, taking losses since the first Israeli strikes on Iran on June 13 to 13%. 7 Iran has warned of 'everlasting consequences' over the U.S. attack. via REUTERS Most Gulf stock markets, however, seemed unconcerned by the early morning attacks, with the main indexes in Qatar, Saudi Arabia, and Kuwait up slightly or flat. Israel's Tel Aviv main index was at an all-time high. Advertisement A key concern for markets centers around the potential impact of Middle East developments on oil prices and thus on inflation. Rising inflation could dampen consumer confidence and lessen the chance of near-term interest rate cuts. Saul Kavonic, a senior energy analyst at equity research firm MST Marquee in Sydney, said Iran could respond by targeting American interests in the Middle East, including Gulf oil infrastructure in places such as Iraq or harassing ship passages through the Strait of Hormuz. 7 Traders are bracing for a rocky day on Wall Street when markets open Monday. AFP via Getty Images The Strait of Hormuz lies between Oman and Iran and is the primary export route for oil producers such as Saudi Arabia, the United Arab Emirates, Iraq and Kuwait. 'Much depends on how Iran responds in the coming hours and days, but this could set us on a path towards $100 oil if Iran respond as they have previously threatened to,' Kavonic said. While global benchmark Brent crude futures have risen as much as 18% since June 10, hitting a near five-month high of $79.04 on Thursday, the S&P 500 has been little changed, following an initial drop when Israel launched its attacks on Iran on June 13. 7 Brent crude futures have risen as much as 18% since June 10, Getty Images Jamie Cox, managing partner at Harris Financial Group, said oil prices would likely spike before leveling off in a few days as the attacks could lead Iran to seek a peace deal with Israel and the U.S. Advertisement 'With this demonstration of force and total annihilation of its nuclear capabilities, they've lost all of their leverage and will likely hit the escape button to a peace deal,' Cox said. Economists warn that a dramatic rise in oil prices could damage a global economy already strained by Trump's tariffs. 7 During past Mideast, stocks initially languished but soon recovered to trade higher in the months ahead. AFP via Getty Images Still, any pullback in equities might be fleeting, history suggests. During past eruptions of Middle East tensions, including the 2003 Iraq invasion and the 2019 attacks on Saudi oil facilities, stocks initially languished but soon recovered to trade higher in the months ahead. Advertisement On average, the S&P 500 slipped 0.3% in the three weeks following the start of conflict, but was 2.3% higher on average two months following the conflict, according to data from Wedbush Securities and CapIQ Pro. An escalation in the conflict could have mixed implications for the U.S. dollar, which has tumbled this year amid worries over diminished U.S. exceptionalism. 7 Analysts say the dollar could benefit from a safety bid in the event of direct US engagement in the Iran-Israel war. AFP via Getty Images In the event of U.S. direct engagement in the Iran-Israel war, the dollar could initially benefit from a safety bid, analysts said. Advertisement 'Do we see a flight to safety? That would signal yields going lower and the dollar getting stronger,' said Steve Sosnick, chief market strategist at IBKR in Greenwich, Conn. 'It's hard to imagine stocks not reacting negatively and the question is how much.' Jack McIntyre, portfolio manager for global fixed income at Brandywine Global Investment Management in Philadelphia, said it was uncertain whether U.S. Treasuries would rally after the U.S. attack, largely due to the market's hypersensitivity to inflation. 'This could lead to regime change (which) ultimately could have a much bigger impact on the global economy if Iran shifts towards a more friendly, open economic regime,' said McIntyre.
Miami Herald
3 hours ago
- Miami Herald
Dave Ramsey sounds alarm for Americans on Social Security problem
American workers anticipating the arrival of Social Security monthly paychecks when they retire often express concerns about whether the program's trust funds will be in sufficient supply to meet their financial expectations. Dave Ramsey, radio host and bestselling personal finance author, sounds an alarm about what is needed to keep those notions alive - and what exactly it is for which Americans should be planning. Don't miss the move: Subscribe to TheStreet's free daily newsletter According to the 2025 Social Security Trustees' Report, if lawmakers fail to intervene, Social Security beneficiaries could see a large reduction in payments starting in 2034. This looming cut stems from the projection that the Social Security trust fund will be exhausted by then. Simply put, the program would be taking in less revenue than it needs to fully cover all scheduled benefits for both current and future recipients. Historically, Congress has stepped in with last-minute reforms to prevent such scenarios - while often shielding lower-income individuals from the brunt of the changes. In 1983, for example, legislators passed a set of measures designed to stabilize Social Security in the short term and extend its financial health for what they hoped would be about 75 years. These measures combined increased revenue - through higher payroll taxes, taxing benefits, and expanding coverage - with modest spending cuts such as adjusting the cost-of-living formula and gradually raising the retirement age. Related: Jean Chatzky sends strong message to Americans on Social Security The latest annual trustees' report, published on June 18, estimates that the Old-Age and Survivors Insurance (OASI) trust fund may run dry by 2033 - unchanged from last year's forecast. After that, only about 77% of promised benefits would be payable unless corrective action is taken. However, one notable update is that the combined trust funds - which include both the OASI and Disability Insurance (DI) programs - are now projected to remain solvent through 2034, one year earlier than previously expected, unfortunately. At that point, around 81% of scheduled combined benefits would still be paid out. Ramsey discusses some basic math involved in why the Social Security system needs adjustments. "As more and more boomers retire, the number of Americans 65 and older is expected to jump from roughly 61 million today to about 77 million in 2035," Ramsey wrote. "At the same time, there will be fewer workers supporting more retirees, which puts even more of a strain on the system." More on retirement: Dave Ramsey offers urgent thoughts about MedicareJean Chatzky shares major statement on Social SecurityTony Robbins has blunt words on IRAs,401(k)s Ramsey emphasizes the fact that Americans should not view Social Security as a main source of income during retirement. Rather, it should be a small but helpful part of one's retirement income that includes investments in tools such as 401(k) plans and IRAs. "Any money you get from Social Security should be considered icing on the cake," Ramsey wrote. Related: Dave Ramsey sends strong message to Americans on Medicare In a statement, the Social Security Board of Trustees made a few key observations. In 2024, the combined reserves of the OASI and DI trust funds saw a significant decline, dropping by $67 billion and bringing the total down to $2.72 trillion. This continued erosion of the funds is an indication of the program's mounting financial strain as benefit payments outpace income from dedicated payroll taxes and other sources. Looking ahead, the financial outlook remains challenging. Starting in 2025, Social Security's total annual expenditures are projected to exceed its total annual income for the foreseeable 75-year horizon. This imbalance isn't new - costs began surpassing income in 2021, and the gap has existed between costs and non-interest income even longer, stretching back to 2010. This growing disparity has contributed to the gradual depletion of trust fund reserves. The statement summarizes the key point for Americans discussed above: Without legislative action, projections show that by 2034 the combined trust fund reserves could be exhausted. If that happens, the program would not go bankrupt, but it would only have enough ongoing revenue to cover approximately 81% of scheduled benefits. This shortfall would significantly affect payments to retirees and other beneficiaries unless Congress enacts reforms to restore long-term solvency. Related: Tony Robbins sends strong message to Americans on 401(k)s, IRAs The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
