Early retirement is something that most of us dream about, but few are able to achieve.
One reason is that the Social Security Administration—citing improved health and life expectancy for older populations—has been steadily raising the “full retirement age.” Perhaps influenced by these changes, compared to previous generations, many of today’s non-retired Americans are anticipating later retirement ages for themselves—a trend that would correspond with a simultaneous decline in the number of people expecting to have enough money to live comfortably when retired.
Americans under 30 are determined to retire early. At first glance, the rise of the sharing economy, opportunities to make passive income, and the appeal of a minimalist lifestyle make this seem feasible. However, most millennials, compared to previous generations, are delaying major life events (including entering the labor force) and as a result have very little saved. A recent report by the National Institute on Retirement Security concluded that 66 percent of working millennials have nothing saved for retirement.
For those that are financially independent, there’s still a few more things to consider:
- Well-being: The most important ranking category for active, early retirees—takes into consideration weather (states with more mild temperatures and lower precipitation are favored), safety, and the accessibility of arts, entertainment, and recreation. States in the West score highest in these areas, whereas states in the South score lowest. Western states, especially California and Oregon, tend to have most of the population concentrated in large cities with easy access to recreational activities and cultural attractions.
- Cost of living: Early retirees will need stretch their savings for a longer period of time than those who retire later.
- Healthcare: While still important, health care quality is generally less of a concern for early retirees than those who retire later in life.
California is actually ranked the ninth best state for early retirement. California’s thriving arts and entertainment scene, combined with its generally pleasant weather, have earned the state the distinction of being ranked second highest in the country for well-being. However, the city’s high housing costs and prices for goods and services make it one of the most expensive states in the country.
- Well-being rank: 2
- Cost of living rank: 46
- Health care quality rank: 20
- City with the greatest influx of retirees: Palm Springs, CA
The top three states are Montana (3rd), South Dakota (2nd) and Idaho (1st). Why is Idaho ranked number one in the nation? This midwestern state is home to lakes, hot springs, and more than four million acres of wilderness. The overall cost of goods and service in Idaho is seven percent below the national average, but rents are over 30 percent lower. Nampa, the second most populous city in Idaho, is located just outside of the state capital of Boise and is receiving the greatest influx of retirees of any city in the state. To learn more about this study, read the full article here.
My name is Kristi Muñoz and I am a title insurance and sales expert at Lawyers Title. I am part of a team that was created specifically to make you a more efficient real estate professional. I take pride in closing your transactions and making certain that you don’t have to worry about title issues and document recording. This means that you will have more time to focus on what you do best.