Planning for an Early Retirement: The Most Expensive States to Consider

The 15 Most Expensive States for Early Retirement

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.

About the Author: Mark Roberts

In addition to managing clients’ money and giving investment and diversification advice, Mark offers something that “the other guys” don’t - a unique approach to Retirement Tax Strategies and distribution. Time and time again, Mark meets with new clients who tell him they have a great relationship with their financial advisor but have never been offered information on this kind of approach to securing their financial futures. Mark has taken this feedback to heart and works tirelessly to ensure that his strategies focus on taxes and distribution. Mark started selling insurance for a major insurance company right out of high school to help put himself through college. After graduating with a degree in finance, he dove into estate planning on the financial side to set himself apart from other financial advisors. However, as changes were made to estate tax laws over time, Mark shifted his focus to income tax strategies. Mark’s philosophy is “the blue prints are more important than the wall paper or carpet.” The wall paper and carpet represent products like investments and insurance policies, whereas the blue prints represent the strategies. Once strategies that truly fit the client’s needs are put in place, our focus can shift to providing you with the right products. According to Mark, “It doesn’t matter what carpet we use if the walls are not in the right place.” Our approach to money management is designed to generate the largest alpha (quality) with the lowest standard deviation and beta (risk). By doing this, we help provide clients with the highest return on the lowest risk. Generating income for our retirees is also very important. Because withdrawing money from your portfolio hurts the account rather than helping it, our goal is to design income strategies to harm the portfolio the least making the money last longer.

The 15 Most Expensive States for Early Retirement

The 15 Most Expensive States for Early Retirement

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About the Author: Mark Roberts