Nearly 40% of the 384 metropolitan areas in the United States today require retirees in excess of 1 million cours to cover the average cost of living.
Nationally, retirees need an average nest egg of $1.07 million. Meanwhile, San Francisco retirees need about $1.37 million, according to a LendingTree study. This is the highest number in the United States.
A new LendingTree study calculates how many people need to retire in each major U.S. metropolitan area based on how much retirees spend each year and the median annual income of people between the ages of 55 and 64. increase.
Read: Americans think they need $1.25 million to retire. Is that enough?
After San Francisco, we round out the five places that need the biggest nest eggs to retire to: New York ($1,315,587), San Diego ($1,298,796), Honolulu ($1,288,763) and San Jose, California ($1,276,997).
You can retire with an average lifestyle for less than $800,000 in just one metropolitan area, Johnstown, Pennsylvania. Cumberland, Maryland ($802,988) and Danville, Illinois ($804,301) are the next closest.
According to Jacob Channel, senior economist at LendingTree, the high cost of living in a given metropolitan area is linked to the number of people who live or want to live there, the number and type of housing that exists , zoning and building laws are involved. , and which industries are most common.
For example, San Francisco’s high housing costs are often attributed to strict development regulations and scarce land. It has created limited supply in high-demand cities.Plus, its proximity to Silicon Valley and high salaries have contributed to rising prices. It’s no wonder San Francisco and the neighboring San Jose metropolitan area are expensive places to live and retire, Lending Tree found.
“Ultimately, each subway is unique and has its own quirks that can be more or less expensive,” says Channel. This is true of any metropolitan area in the state.Those considering retirement in a particular area should do thorough research before packing up and moving.Avoid any preconceived notions or vague ideas about the area. Please decide if you choose to live there.”
San Francisco, San Diego, and San Jose rank high on the list of neighborhoods that need the biggest nest eggs to retire, but the other California metropolitan areas aren’t far behind. Twelve of the metropolitan areas are in the Golden State. Joining him on that trip is Los Angeles, which is number six. A study found that it would take a nest egg of $1,273,643 to retire and maintain an average standard of living there.
“Simply put, California is a very attractive state for many people,” says Channel. “The climate is generally pleasant, there is a lot of diversity in terms of geography that can be experienced within the state (from beaches to mountains), and there are many stable (and often well-paying) jobs. Attractive California Thanks to , many people want to live there. This means that housing and other resources are scarce and the cost of living is high. It’s worth it, even if you need more savings.”
Other states with metropolitan areas in the top 20 include New York, Hawaii, Florida, Colorado, Washington, and the District of Columbia. The only metropolitan area in the top 20 that is primarily in a landlocked state is Denver, which could require a $1,243,532 nest egg to retire.
“Of course, having a high-paying job and not being in a lot of debt are two things that many people don’t have, and that would make saving much easier,” Channell said. “And even if you did ‘everything right,’ there’s no guarantee you’ll get the million dollar nest egg. What’s most important is to save what you can and plan your lifestyle around the money you have, not the money you wish you had. ”
Questions about retirement, social security, where to live or how you can afford it? Contact us at HelpMeRetire@marketwatch.com. I may use your question in a future article.
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