ARKANSAS (KNWA/KFTA) — Retiring in Arkansas, and other southern states, is more affordable than say, Hawaii, which is the most expensive state for retirees, according to statistical data gathered from several government agencies and reported by MagnifyMoney researchers.
The researchers looked at the price in all U.S. states regarding housing, food, transportation, Medicare Part B and Part C, entertainment and personal care.
They found that as Americans get older they spend less. From age 65 to 75 they spend about 30% less, but that may not be by choice as income could decline. “$55,656 for those 65 and older, versus $99,606 for those 55 to 64 years old,” according to the study.
For consumers 65 and older spending priorities shift, with healthcare being the biggest cost. But, they also cut back on food and transportation. “Retirement spending in these areas equates to spending that is 19% and 30% less, respectively, than typical,” per the study’s findings.
Peak spending years are between ages 45 and 54. Overall, paying for health care is a priority in this age category.
- Hawaii is the most expensive retirement state, followed by California, Massachusetts, New Jersey, and New York. The average annual costs for housing, food, transportation, Medicare Part B/Part C, entertainment, and personal care exceeds $50,000.
- Arkansas, West Virginia, and Mississippi are the least expensive states for retirement. Annual costs in key spending categories average below $30,500.
- Arizona and Florida are the two most popular retirement locations. The annual cost to live in those states is similar, with an average between $36,000 and $38,000.
In Arkansas, the median monthly housing costs are between $1,094 and $1,378, and the annual cost to live is $29,736. To compare, Hawaii’s median housing cost — the highest in the nation — $2,472. The annual housing cost for retirees in the Aloha State is about $55,000, according to the report.
Retirement strategy recommendations (to get ahead)
- Start saving early.
- Take advantage of employer-sponsored plans.
- Consider an individual retirement account (IRA).
- Automate investments.
- Keep it simple. No need to over-complicate investing.
Magnify Money used data from the U.S. Bureau of Labor Statistics (BLS), U.S. Bureau of Economic Analysis (BEA), U.S. Census Bureau, and MedicareAdvantage.com.
We first used the 2019 Consumer Expenditure Survey from BLS to find out how much households aged 65 and older spend yearly, on average, on:
- Transportation (vehicle purchases, maintenance and repairs, vehicle insurance, etc.)
- Personal care
We then multiplied those figures by BEA regional price parities from 2019, which calculate the difference in price levels for goods and services across each state. Next, we added each total to the 2019 U.S. Census Bureau one-year statewide estimates on housing costs for those with a mortgage, from mortgage payments to real estate taxes to utilities.
Finally, we added the average cost in 2021 of Medicare Part B and Part C (also known as a Medicare Advantage plan) across each state where available (Alaska doesn’t offer Medicare Part C). We used the standard Part B premium for 2021, while Part C data was compiled by MedicareAdvantage.com.