Recently, I collected data on cost of living, and average longevity in every state + D.C. From the data, I derived the COLI, or Cost of Living Index, which is then normalized to 100 (where 100 represents the national average cost of living). Additionally, using data from Bureau of Labor Statistics (BLS), I populated by data set with yearly figure needed for retirement based on life-expectancy data in US states, which was published by National Geographic. The average annual expenses data were derived from Consumer Expenditure Survey by BLS. All this data collection and analysis was for me, at least with acceptable accuracy, to get an idea of how much it costs to retire in any of these locations. In this post, I share my observations and insights with some easy to digest visuals.
The COLI value above 100 indicates that the state has a cost of living higher than the national average. Conversely, an index value below 100 signifies a cost of living lower than the national average. The COLI takes into account various categories of expenses such as food, housing, utilities, transportation, healthcare, and consumer discretionary spending. Data range is from 2018 to 2023 depending on the attributes.
Observations & Insights
‣ Average American retirement age is 64 (63.8) years.
‣ Retirees need an average of about $945,000 to cover their living expenses in retirement.
‣ Average life expectancy is about 78 years (all genders).
How much retirements are required in each state?
The right y-axis shows the life expectancy in years.
‣ Hawaii, California, New York, Minnesota have some of the highest life expentency along with high cost of living, ballooning the retirement funds requirements.
‣ States with lowest life expectancy also correlate with lower requirement funds requirements as seen in Mississippi, West Virginia, Kentucky, Alabama.
‣ The anomalies are Oregon, Arkansas, Delaware where the cost of living are disproportionately higher desipite their lower longevity.
Cost of Living
‣ Hawaii and Washington DC are 92% and 62% more costly than the national average respectively.
‣ Mississippi, Arkansas, Oklahoma has some of the lowest cost of living index (86% to 88% of the national average, or 12% to 14% lower than the national average).
The Golden Years Per State
‣ National average of retired life is about 14 years.
‣ Retirees in DC enjoy only 10 years of Golden Years (the least in the nation).
Duration of Retirement (Top 5 List)
5 Most and 5 Least Expensive States to Retire in
States with Most and Least Longevity (Top 5 List)
Keep in mind that all figures shared are average calculations, individual requirements vary by many factors such as health, lifestyle, habits, family size, etc. etc. even in the same location. All metrics are specific to United States.
I hope this was informative and interesting. Thanks for reading!
Related:
