Planning for retirement means understanding your sources of income – pension, Social Security, investment income, 401(K)s – and determining how to stretch your dollars to provide the greatest comfort and security in the years ahead.
One of those considerations is where you may choose to live. Of course, your network of family and friends will be especially important to making that decision, and so will cost of living.
As the United States continues to experience the repercussions of the COVID-19 pandemic, the economy is currently one of the hardest hit areas.
Inflation is reaching its highest levels in years and is a major root of many economic challenges. Prices have risen in all product categories, especially gasoline.
Due to these increases, and other factors, some states are less expensive, particularly for new home buyers and those looking to settle down long-term.
The top five most expensive states to live in right now: Massachusetts, Oregon, California, New York, and Hawaii. These states are home to big market cities like Boston, Portland, Los Angeles, and New York City, where both housing and other essentials are at a premium.
Of these top five costliest states, Hawaii has the highest cost of living. Home prices and monthly energy bills have skyrocketed. Scott Cohn of CNBC said, “A trip to the supermarket in Honolulu is practically an exercise in high finance.” A loaf of bread and a carton of milk could run you around $10.
In contrast, the cheapest U.S. states to reside in are Missouri, Arkansas, Oklahoma, Kansas, and Mississippi.
The price of all sorts of products and services are just a fraction of what the cost would be in the more expensive states.
“See a movie in Kansas City and it will cost about 30% less than it would in Hollywood. And if you wanted to buy a nice men’s shirt in Missouri for your first visit to a theater since before the pandemic, it would cost about 25% less than the same shirt in Boston,” says Cohn.
The average monthly energy bill of the five most expensive states is $254.73, which is more than $100 greater than the average of the five most inexpensive states.
An average home price in Manhattan, Honolulu, or San Francisco would allow you to buy around 4 individual homes in almost all of the five cheapest states.
Common retirement destinations like Florida, Arizona, and South Carolina found themselves ranked between 20 and 30 for cost of living, right in the middle of the pack.
Other popular states for retirees such as New Mexico and Tennessee each snuck their way into the top 10 most affordable states to migrate to. Depending on which you choose the 1930 version of the Fred Astaire song Puttin' On The Ritz might be for you, or else there is also the mid 1980’s version by the artist Taco. An adaption of his song has some great archival footage of how the well to do really lived in the Roaring 20’s.