It now takes retirees greater than a cool million to fund a median life-style in almost 40% of the 384 U.S. metropolitan areas.
Nationally, retirees would wish a median nest egg of $1.07 million. Meanwhile, a retiree in San Francisco wants almost $1.37 million, a examine by LendingTree discovered. That’s the best determine within the U.S..
The new LendingTree examine calculates how a lot individuals must retire in every U.S. metro space primarily based on the quantity retirees spend in a yr and on the median annual earnings of individuals between the ages of 55 and 64.
Read: Americans assume they want $1.25 million to retire. Is that sufficient?
After San Francisco, rounding out the 5 locations the place you’ll want the most important nest egg to retire are New York ($1,315,587), San Diego ($1,298,796), Honolulu ($1,288,763) and San Jose, Calif. ($1,276,997).
You can retire with a median life-style for lower than $800,000 in only one metro space: Johnstown, Pa. The Pennsylvania metro slides slightly below that mark at $779,765. Cumberland, Md. ($802,988), and Danville, Ill. ($804,301), are the following closest.
According to LendingTree senior economist Jacob Channel, many elements contribute to how costly life is in a selected metro space, together with how many individuals reside there or need to reside there, what number of and what sorts of properties exist, what zoning and constructing legal guidelines appear to be, and which industries are most typical.
For instance, excessive housing prices in San Francisco are sometimes attributed to strict improvement laws and scarce land. That’s created restricted provide in a metropolis with excessive demand. Add that it’s near Silicon Valley, with its excessive salaries, which play an element in driving up costs, and it’s no marvel San Francisco — and neighboring metro space San Jose — are dear locations to reside and retire, Lending Tree discovered.
“Ultimately, each metro is unique and will have its own quirks that can make it more or less expensive,” Channel says. “This is true of metros that are ostensibly similar or that are in the same state. Anyone thinking about retiring in a given area should thoroughly research it before packing their bags and moving. Don’t let your preconceived notions or vague ideas about an area dictate whether you choose to live there.”
While San Francisco, San Diego and San Jose rank close to the highest the listing of areas through which you’d want the most important nest egg to retire, different California metro areas aren’t far behind. In reality, 12 of the highest 20 metro areas are within the Golden State. Joining that journey is Los Angeles in sixth place; it takes a nest egg of $1,273,643 to retire and keep a median lifestyle there, the examine discovered.
“Simply put, California is a very attractive state for a lot of people,” Channel says. “The climate is generally agreeable, there is a lot of variety in terms of the geography that one can experience within the state (from beaches to mountain ranges), and there are a lot of stable (and often high-paying) jobs to go around. Owing to how appealing California is, many people want to live there. This means there is less housing supply and other resources, and the cost of living is higher. For many retirees, this higher cost of living can be well worth it, even if it requires more savings.”
Other states the place metro areas that make prime 20 appearances embrace New York, Hawaii, Florida, Colorado and Washington, in addition to the District of Columbia. The solely metro space primarily in a landlocked state within the prime 20 is Denver, the place you’ll seemingly want a nest egg of $1,243,532 to retire.
“Of course, having a high-paying job and not a lot of debt — two things that many people don’t have — will make saving much easier,” Channel mentioned. “And, even if you do ‘everything right,’ there’s no guarantee you’ll ever end up with a $1 million nest egg. That said, a million dollars isn’t something everyone will need to have a happy retirement. What matters most is saving what you can and planning a lifestyle around the finances that you do have, instead of the finances that you wish you had.”
Do you could have questions on retirement, Social Security, the place to reside or the way to afford it in any respect? Write to HelpMeRetire@marketwatch.com and we could use your query in a future story.
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