Saving enough money to retire comfortably isn’t as easy as it sounds. According to data from the Federal Reserve, the average American has just around $60,000 saved for retirement, and 26% have nothing saved up. The coronavirus pandemic has made it even more difficult to save for retirement. According to loan provider Lending Tree, 25% of employees are considering delaying their retirement to offset the impact of the economic crisis on their accounts.
Financial advisors suggest moving to another state or city with a low cost of living in retirement. So the WalletHub conducted research on the best and worst states to live in during retirement. Each state was scored based on its affordability, health, and quality of life. Below is a list of the top ten states for retirement.
1: Florida
Total score: 61.09
Despite the pandemic’s knocking effect, the report shows that most employers didn’t abandon their retirement plans, and employees didn’t cash out their savings in droves.
2: Colorado
Total score – 60.94
The unemployment rate reached 14% last year, which was the highest since the Depression Era. The COVID-19 pandemic may have a resulting trend of forcing many Americans into early retirement.
3: Delaware
Total score – 58.69
Traditional pensions and defined benefit plans may never come back, but retirees are rethinking their retirement savings strategy. Many are looking towards some form of retirement income offering.
4: Virginia
Total score – 58.61
Job losses due to the pandemic are making older employees consider early retirement. According to AARP research, the labor participation rate of employees aged 55 fell from 40.3% to 38.5% between February and May 2020.
5: North Dakota
Total score – 57.49
Security Benefit recently introduced an app for employer clients that allows employees to monitor and manage their retirement savings progress while offering them educational resources and incentives to keep them motivated.
6: Montana
Total score – 57.35
The COVID-19 pandemic, in addition to income inequality and the increasing public debt, is threatening the retirement prospects in the US and around the world, with the low-interest rates being one of the biggest threats.
7: Idaho
Total score- 57.28
Latino Americans have had difficulty saving for retirement even before the pandemic, and the exclusion from the labor market has made saving for retirement even more challenging for most. Data from a Prudential survey shows that 21% of Latino Americans had their household income cut by half compared to 17% of the general population due to the pandemic.
8: Utah
Total score – 57.11
As states continue to roll out mandated employer retirement saving programs for employees, researchers are now calling for a nationwide policy. They say a universal mandate will dramatically boost the savings rate and reduce the strain on federal social programs.
9: Minnesota
Total score – 56.33
While the country is gradually reopening and there’s hope for a return to economic and social normalcy before the end of the year, interest rates will most likely remain at the current near-zero levels in the foreseeable future. The low-interest rates will significantly impact retirement savings this year.
10: New Hampshire
Total score – 56.29
In New Hampshire, the economic impact of the COVID-19 pandemic highlighted the need for an overhaul of the current retirement system, especially to help those in the low-income bracket that are most vulnerable to market volatility.
