How much will you need to retire? $500,000? $1 million? $2 million? Unfortunately, there’s no easy answer. Some people won’t be able to enjoy their dream retirement without millions of dollars in the bank. Others are going to try to get by with $100,000. It all depends on your lifestyle.
It also depends on where you live, according to data from the Employee Benefits Research Institute. Many retirement-savings recommendations are based on national benchmarks, noted the authors of the report on geographic variations in spending in older households. But because there can be huge differences in how much people in different parts of the country have to pay for housing, health care, and other necessities, it’s probably more useful for those who are planning for retirement to consider how much people in their region spend.
Nationwide, the average household with people between the ages of 65 and 74 spent $45,633 per year, including nearly $21,000 on housing costs, $4,300 annually on health care, and $4,700 on food. (Data on spending came from the long-running Health and Retirement Study.) As people age, overall expenses decline and a greater share of the typical household’s budget goes to housing and health care, while spending on travel and entertainment falls. (The survey didn’t include people who were living in nursing homes or other care facilities.)
But when the Employee Benefits Research Institute’s authors broke down the data by Census division, they found some big differences, with retirees in the most expensive regions spending $15,000 per year or more than those in cheaper states.
Where is it cheapest to retire? Let’s take a quick look to find out how much retirees spend in your part of the country.
Median spending is for households with residents ages 65 to 74, unless otherwise noted.