Cost of living is a major concern for those planning for retirement. The Social Security check is a key point in retiree’s life in the United States. The amount of money you will need to live comfortably during your golden years depends largely on where you choose to retire. In some U.S. states, it is possible to enjoy a comfortable retirement on a budget of $65,000 a year or even less.
Differences in living costs are substantial. Some states have high annual expenses due to expensive housing, transportation and other factors, while others, mainly in rural areas, offer a more affordable lifestyle. Choosing the right state can make a difference in how much you will have to save and how your savings will be distributed in retirement.
A recent GOBankingRates analysis showed that in some states, it’s possible to live comfortably on less than $65,000 Social Security check a year. Here are the states where you can maintain a high quality of life within this budget, based on estimated annual expenses for a comfortable retirement.
Best states to retire on less than $65,000
In these states, you can enjoy a comfortable retirement under $65,000 per year, taking into account housing, health, food and transportation costs. Social Security is not huge for everyone so we have to keep an eye in our expenses. In this term, chosing the best State to live is always a hard decision. Here we can see the detailed information for each of them:
| State | Total Annual Expenditure | Comfort Buffer (20%) | Total Annual Cost for Comfortable Retirement |
|---|---|---|---|
| Alabama | $50,980 | $10,196 | $61,176 |
| Arkansas | $51,211 | $10,242 | $61,454 |
| Georgia | $52,832 | $10,566 | $63,398 |
| Indiana | $52,253 | $10,451 | $62,704 |
| Iowa | $52,137 | $10,427 | $62,565 |
| Kansas | $50,517 | $10,103 | $60,620 |
| Missouri | $51,211 | $10,242 | $61,454 |
| Oklahoma | $49,996 | $9,999 | $59,995 |
| West Virginia | $48,492 | $9,698 | $58,190 |
As we can see, these states offer a significantly lower cost of living compared to others, which can make your retirement more comfortable and less expensive. While some of these states have higher taxes or expensive utilities, the overall cost is still very competitive for those who want to maximise their quality of life while minimising their expenses.
Maximising your Social Security payment
While choosing an affordable state to retire in is crucial, another important aspect is maximising your Social Security benefits. Here’s how you can increase your monthly retirement payment:
- Retirement age: Delaying your retirement until age 70 can increase your monthly payment by up to 8% for each additional year you work after age 62.
- Years worked: The amount of Social Security depends on your work history. The more years you work and pay payroll taxes, the higher your benefit. Your highest 35 years of earnings are considered when calculating the payment.
- Salary during those years: Your monthly payment is also calculated based on your highest salaries. Be sure to maximise your earnings during your working years to get a larger pension.
Taking these factors into account and planning ahead will allow you to enjoy a more comfortable and financially stable retirement, no matter where you choose to live.