The key to a financially secure retirement is the planning. Whether with the steadying hand of a financial advisor to guide you to your golden years, or strategizing on your own, planning your retirement does take time and can be difficult. Some seniors, knowing they have not saved enough to retire in their current locale, plan to move to lower cost of living areas. Some seniors on the other hand have prepared themselves to live in more expensive states and can afford the higher cost of living without slipping into poverty. However the degree to which seniors are prepared for life without work varies by state.
Below we examine all 50 states and Washington, D.C. and rank them on their retirement preparedness. We compare them across a total of seven metrics. Specifically, we look at average retirement income, percent of seniors with retirement income, homeownership rate for seniors, percent of seniors who are housing cost burdened, the poverty rate for seniors, percent of seniors using food stamps and the cost of living in every state. Check out our data and methodology below to see where we got our data and how we put it together to create our final ranking.
- Northeast struggles – Thanks to a high cost of living, many seniors in the Northeast of the U.S. find themselves struggling in retirement. In particular, states like New York, Rhode Island, Massachusetts, Vermont and Maine all end up in the bottom 10.
- Midwest scores well – The Midwest is the region to find retirement-ready seniors. Half of the states in the top 10 are in the Midwest, including Indiana and Michigan. Those two claimed spots in the top 5.
Seniors in no other state are as prepared for retirement as those in Utah. First of all, seniors here have secured a good amount of retirement income for themselves. Combining average retirement income with Social Security income, we estimate the average retired senior household here has about $51,105 in retirement income. Perhaps even more impressive, 86% of seniors live in a home they own. That keeps the long-term cost of housing relatively low while giving seniors the chance to sell their home if they need a little extra cash. In total, Utah ranks in the top 10 for five of our seven metrics.
Delaware takes second. More than 58% of senior households here have some retirement income saved up. This state also has the fifth-highest homeownership rate for seniors. Unfortunately, that high homeownership rate has not shielded all seniors from the burdens of being housing-cost burdened. Nearly 26% of seniors here are housing cost burdened, an average rate.
But other than the slightly high rate of seniors who are housing-cost burdened, seniors are doing well. The First State ranks fifth for senior poverty rate, with a senior poverty rate of only 6.9%.
The Hoosier state takes third. This state has one of the lowest average incomes for prospective retirees. But thanks to low cost of living, seniors here make it work. For starters only 22% of seniors here are housing-cost burdened the second-lowest rate in our top 10. On top of that Indiana also ranks in the top 11 for senior homeownership rate and percent of seniors using food stamps. Those rates of hardship are low partially due to Indiana’s affordability. We rank it as the 10th most affordable state in the country.
4. (tie) Michigan
Indiana’s northern neighbor, Michigan, occupies the fourth spot. According to data from the Census Bureau, 57% of Michigan senior households have some retirement income one of the highest rates in the country. Combine that with a low cost of living and it shouldn’t be a surprise that seniors in Michigan are prepared for a long retirement. Other notable scores include the 11th-highest homeownership rate for seniors and the 18th-lowest senior poverty rate. Overall Michigan ranks above average in all but one of our metrics.
4. (tie) Virginia
Virginia is a fairly high cost of living area, but seniors here are still prepared for retirement. We estimate that the average senior with retirement income pulls in about $52,700 per year. Census Bureau data also reveals that just under 56% of senior households have some chunk of retirement income saved up. Overall most seniors in Old Dominion are doing well for themselves even factoring in the higher than average cost of living. This state has the 13th-lowest senior poverty rate and the 12th-lowest rate of seniors using food stamps.