Americans in a majority of states face the prospect of outliving their retirement income and savings, according to a recent analysis from Seniorly, a senior living search platform.
A sharp rise in the cost of health care, housing, food and other essentials diminishes the value of retirement savings, and a single unexpected expense can throw off an otherwise solid financial plan.
The analysis found that across the United States, 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 shortfall of about $115,000. That gap between nest egg and expenses approaches $500,000 in the worst states.
In contrast, seniors in a handful of states have a strong financial edge and are less likely to face the stress of running out of money later in life. These top-ranked states show how retirees can fare best when decent nest eggs are matched with a cost of living that does not eat away at every dollar.
To understand how retirement readiness varies by location, Seniorly analyzed where older adults are least and most likely to outlive their savings. Researchers used state-level life expectancy at age 65 from the 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 United States, 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 accompanying gallery for the nine states where seniors are least likely to outlive their savings.
(Credit: AdobeStock)
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