The decision to retire is a significant milestone, and for many, the age at which they leave the workforce varies based on numerous factors. Some individuals choose to work past the full retirement age to increase their Social Security benefits, while others retire early due to personal reasons such as health or lifestyle changes. Regardless of the path to retirement, one key factor remains: ensuring that you have enough savings to sustain your lifestyle, especially if you’re considering an early retirement.
Early Retirement Considerations
Full retirement age in the U.S. is 67 for those born after 1960, but some Americans consider retiring much earlier—in their 40s or 50s. This can be an attractive option for those who want to enjoy their golden years without the pressures of work. However, retiring early comes with its own financial challenges, primarily the need for a sizable retirement fund that can last 30 to 40 years.
A recent report by GOBankingRates highlighted just how much early retirees need to save. The researchers calculated how much someone would need to save to retire at 50, assuming retirement would last 30 or 40 years. The findings were clear: regardless of where you live, you need to be a millionaire to retire at 50. In many states, early retirees would need more than $1.5 million to sustain themselves for 30 years, and in some states, over $2 million to retire comfortably for 40 years.
Here are the 15 Most Expensive States for Early Retirement
For those looking at an early exit from the workforce, the following 15 states rank as the most expensive places to retire early, due to high costs of living and substantial savings requirements:
- Hawaii
- California
- Massachusetts
- Washington
- Colorado
- New Jersey
- New Hampshire
- Oregon
- Utah
- Alaska
- Rhode Island
- Montana
- Nevada
- Connecticut
- New York
How Much Do You Need to Retire Early?
For those aspiring to retire at 50, the numbers are clear: you’ll need at least $1.5 million to retire comfortably for 30 years in most states. In many of these high-cost states, especially those listed above, you’ll need to have over $2 million to ensure a secure retirement for 40 years. Without careful planning, early retirement in one of these states may be financially unsustainable.
Navigating Early Retirement
Working with a financial advisor is essential if you’re considering early retirement, particularly in one of these expensive states. We can help you navigate uncertainties, create a comprehensive savings plan, and ensure you’re financially prepared for the long retirement journey ahead.
Planning early and making smart financial decisions will make all the difference in achieving the retirement lifestyle you envision, no matter where you choose to live.
