Older Americans today can look forward to living two or three decades in retirement, yet in all but nine states, there’s a good chance they will outlive their retirement income and savings, according to a recent analysis from Seniorly.
The cost of housing, health care, food and other essentials has risen sharply, diminishing the value of even well-planned nest eggs. A large unexpected expense can upset a robust financial plan.
The analysis found that across the U.S., older adults are projected to have income of $762,000 on average from Social Security benefits, savings and investments and projected expenses of $877,000, leaving them an average gap of about $115,000.
Today, Americans think they will need to have saved about $1.3 million to retire comfortably, but in many places, even that benchmark may be insufficient to guarantee peace of mind, according to the senior living search platform.
To understand how retirement readiness varies by location, Seniorly analyzed where older adults are most and least likely to outlive their savings. Researchers used state-level life expectancy at age 65 from Centers for Disease Control and Prevention to estimate how many years seniors are likely to spend in retirement.
They then calculated expected retirement income over those years, combining average annual Social Security benefits with median net worth, including Census Bureau data on financial assets and retirement account savings.
To estimate expected retirement expenses, researchers started with seniors’ average spending on essentials across the U.S., sourced from the Bureau of Labor Statistics, then adjusted those figures for each state’s cost of living according to Missouri Economic Research and Information Center to get a realistic picture of how much seniors are likely to spend annually in each state.
See the gallery for the 10 states where seniors are most at risk of outliving their savings under current economic conditions.
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