A new report reveals that individuals in California must accumulate an astonishing $2.3 million to secure a comfortable retirement lasting 20 years. This translates into an annual savings target of $162,045. To achieve this optimal retirement goal, it is crucial for people to begin their savings journey early.
For those commencing their savings at the age of 20, a monthly saving of $4,334 is essential. Those who start saving at 30 will see their monthly savings requirement increase to $5,573. The most recent data indicates that the average annual household income in California is projected to be $130,718 in 2024, with the median income calculated at $91,905.
California ranks as the second most expensive state for retirement, following Hawaii, where one needs $3,105,384 to enjoy 20 years of comfort. The analysis reveals that in 23 states, having over $1 million set aside is vital for a secure retirement. The five states with the highest retirement costs are:
1. Hawaii: $3,105,384
2. California: $2,340,510
3. Massachusetts: $1,977,309
4.Washington: $1,749,300
5. New Jersey: $1,567,009
Conversely, West Virginia stands out as the most affordable state for retirement, where a savings total of $434,501 is deemed sufficient for 20 years.
The five states with the lowest retirement costs include:
1. Oklahoma: $539,812
2. Louisiana: $499,020
3. Arkansas: $489,937
4. Mississippi: $442,620
5. West Virginia: $434,501
These conclusions are based on an assumed retirement age of 65 and a life expectancy of 85 years.
The researchers utilized data that encompassed cost of living metrics from the Bureau of Labor Statistics and the Missouri Economic and Research Information Center. Additionally, they took into account monthly Social Security benefits in their retirement calculations. The study underlines the critical need to begin saving for retirement as early as possible.
There is a significant disparity in retirement savings requirements across states, with a staggering difference of over $2.6 million between the most and least costly states.
