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ThinkAdvisor has a list of the 12 cheapest states for retirees to live a comfortable retirement. The estimated income needed ranges from about $63,000 to $58,000 a year.
Their report defines “comfortable “as individual’s spending on housing, groceries, transportation and health care in each of the 50 states to determine the average retirement income necessary for a comfortable retirement lifestyle.
There is no single definition of comfortable retirement. Alabama is one of the states on the list. Having lived off base in Alabama for 18 months while in the army, I can attest I would not be comfortable there. Others would love it i suspect and be aghast at living in NJ.- definitely not on the list.
Is a comfortable retirement any different than a comfortable life? I don’t think so. Also, I’m pretty sure that “comfortable” includes more that just money. You can have sufficient money but not be comfortable where you live or with the people around you.
I’d like to add minimum stress and worries as part of being comfortable, but not sure that’s realistic.
The real question is not where you live, but how. I tried getting Gemini AI to define “comfortable” and it went in circles.
My simple definition is to live in retirement as you did before with little or no required compromises, no long-term financial concerns and no need to worry about paying bills or limiting desired activities- travel, dining out, attending events, whatever you fancy.
And I don’t want to move to Alabama to do it.
Am I asking too much?
Dick Quinn, nice job defining comfortable for the masses, overall an impossible job. My wife and I decided on two things to be most comfortable, being near our daughter for later years, and we decided on a CCRC for Independent Living with, Assisted Living, Skilled Nursing and Memory Care when needed. My daughter is 20 minutes East of us. At first, I just wanted to stay where we were, but after reviewing 10 CCRC’s in St Louis County we decided on a nice place in Kirkwood, MO. This CCRC is like being on a Cruise ship, but no seasickness on land, and activities galore, and the friendliest people in 234 apartments. This of course is not for everyone, but if you can, check it out. We are very comfortable spending down our nest egg. Thanks to Dick and all of you who made comments, as this is what helps the masses.
Nice to hear you made the right choice for you. Enjoy!
I lived in Alabama for 10 years and New Jersey for 12 years. Alabama has great weather and low taxes. New Jersey had the nicest, friendliest people, (Yes, not a typo,) is o]an hour from anything you want to do, and a high cost of living. I moved from Alabama the day I retired and didn’t look back. I would return to NJ if I could afford it.
Now I live in small town Iowa which offers a slower pace at the price of limited choices. Located a two hour drive from a major airport, 35 miles to the nearest Home Depot, and a Chick Fil A is the best new restaurant in town, so we are talking rural.
All three were comfortable in their own place and time. Comfortable is not just about money or things, but the people in your life, the rewards emotionally, and the peace of mind that it brings.
Very true, but not have the stress over finances helps too.
RQ
you stirred the pot again……nice job
for us we do live the comfortable life……I am a spender and my wife is frugal so we make a great couple…….we do and go as we wish if it is dinner out or vacation….I guess you can call us lucky but I call it life well lived
The problem with your “simple definition” is that it seems unlikely that many people live that way when they are working. So it is even more unlikely that they will do so in retirement. However, that does not mean that they would not consider themselves to be comfortable, even if you would not.
Chris and I don’t live P to P, not even close. The emotional comfort we get from this is immense. So for me, I’m onboard with Quinn. But I agree with you that many, if not most, live their entire life as you describe and seem generally content.
I admit I may be a bit more conservative, more inclined to attempt to cover all bases as I have written before. Trying to avoid a financial crisis.
I do not see comfortable as requiring luxuries. Working or retired,
However, I have a hard time seeing comfortable as living on a financial edge and deprived of minor luxuries such an occasional dining out.
I wish someone would give their definition that differs from mine.
Here are some thoughts on the word “comfortable”:
1) Nobody cares how Dick Quinn or anybody else defines it. If you keep pushing one particular definition, you’ll get push back — which has indeed happened. I think a sense of financial security is important. But others have different values, and I’m certainly not going to declare that I have a monopoly on truth.
2) When you regularly mention second homes and luxury cars, folks get put off. There are many people who can’t imagine owning such things, and they certainly don’t feel they need them to be happy.
3) Folks adapt to their circumstances. Most are reasonably happy with their lot in life. Would they be happier with more? Yes, for a brief period, and then they’d adapt, still somewhat dissatisfied but happy enough. It’s the human condition.
4) When I was age 23, I had just a fraction of what I have today. Was I unhappy? No, I was probably as happy as I am today.
In short, money can buy happiness, but it’s one of the lesser contributors to happiness. There are so many other factors that are more important: good health, family situation, a person’s happiness set point. These are the things that make them feel comfortable, not the size of their emergency fund or their pension check.
In short, we shouldn’t impose our definition of “comfortable” on others, because we will almost certainly be wrong.
Thank you for this response Jonathan. You are spot on!
I have read studies that reported the vast majority of retirees are happy/content with their retirement status irrespective of their income.
I never mentioned or implied luxuries as part of being comfortable. My stated definition is simply feeling financially secure with a bit extra. I never implied a second home was part of my being comfortable, it isn’t.
Others inject their opinions and thoughts using their assumptions, not mine.
It seems when I state my opinion or position I am accused of imposing my ideas. I should be flattered I guess, but my opinion is no more imposed than anyone else’s.
On countless occasions, I’ve told HumbleDollar writers that, while they may not be financial experts, they are experts on their own life, and that’s what they should write about. I’d encourage you to write more about Dick Quinn’s financial life and what works for him, and spend less time trying to convince others that they need to behave differently. Everybody has different values, different goals, a different financial situation, and so on. We can learn from each other. But in the end, what works for Dick Quinn or for me won’t necessarily work for others, and it would be arrogant to think otherwise.
What on earth do you think not “limiting desired activities- travel, dining out, attending events, whatever you fancy” implies?
It implies being able to retire and still be able carve birds in your wood shop if that is your hobby or take your spouse out to eat on occasion or go fishing and buy a new lure. If you can’t do those things and that’s what you want to do, are you still feeling comfortable? That’s what it implies.
No to me – “whatever you fancy” implies what it says having enough for anything I fancy without worry. Kinda like having no “if you have to ask the price” constraint . I suspect most people haven’t lived their working lives like that so it seems odd wording to me as a definition of “comfortable”.
A far better definition IMV would be “whatever you fancy provided it doesn’t take your monthly expenditure over 100+X% of average/budget”.
I surrender. My view assumes a modicum of common sense and financial responsibly.
So why not state that that rather than the “whatever you fancy” implication of a bottomless credit card? You’ve managed in this thread alone to present your own definition of something that most people have no problem with addressing in their own way, and which ultimately turns out to be similar to yours once we cut through your choice of language ( though I suspect your emergency fund has at least 1 more zero on it than most) yet you say you disagree with most who’ve attempted to engage.
I think that’s it. I limit desired activities because of a) time spent still working and b) being too tired as a result of such working to bother with marginal leisure activities, c) being minded that sacrificing instant reward now will pay back in 20 years time.
What kind of activities?
Heli skiing in Alaska, going to Champions’ League matches all over Europe, flitting to Ibiza or Miami on a weekend whim. We can all desire stuff but recognise we don’t need it to be happy enough.
Used ChatGPt to deine a “comfortable retirement”:
A comfortable retirement refers to a life stage where an individual or couple can sustain a desirable standard of living without financial stress, while enjoying the freedom to pursue personal interests, hobbies, and travel. The definition of comfort varies depending on individual preferences, lifestyle goals, and cultural expectations.
That’s the way I see it.
This article in USA Today explores if retirees can live “comfortably” on social security alone. They have interviewed people who are trying to do it.
https://www.usatoday.com/story/money/2024/11/23/can-you-retire-social-security-income-seniors/76135159007/
That brings us back to defining “comfortable.” These kinds of article always are suspicious to me. I read them and there are many questions I would like to ask. Based on what some of the people said they did with their finances or didn’t do, they don’t have my empathy.
Clearly, millions of people and retirees live on modest incomes, they get by, pay their bills, but are always at financial risk in some way – the rent goes up, a large dental bill, any number of things. At the same time there is little or nothing for extras, even going out to eat as mentioned in the article or travel within the U.S.
To me that is not being comfortable, it’s getting by which is reality for many, but is it desirable? I stand by my definition of comfortable.
I think people also compare themselves with others in similar situation, when they say they are comfortable with their life. It is not desirable, as you say and I agree. It is relative to others. They cannot wish for something they will never have. They know many more who are in dire straits compared to them.
Despite my poor wording of the title, this post was not about me or my quest. It was a generic question about defining comfortable retirement and living that was on one’s desired terms.
As for me, my property taxes in NJ plus my HOA fees for our condo would consume about 40% of the incomes cited.
We moved from Illinois to Eastern Tennessee about 1 1/2 years ago and never looked back. People, including government employees, are friendly and always willing to help with the red tape of starting in a new state. Taxes are less than 30% of Illinois property taxes and comparable on sales taxes. No income tax in Tennessee is a plus. 4 seasons without being buried in snow is another bonus. Good Health services in nearby Knoxville make this an easy choice for retirement relocation.
So far in our first year of retirement, we are living like we always have. But we had lived below our means before. I went down the rabbit hole on the articles Dick and Rick cited and the figures mentioned were similar to what we are experiencing. The big change we have made is to go down to one car. Spouse still has a work vehicle available for when they do (very) part time work, otherwise we share a vehicle. It is going ok, but I had saved for a (used) second car if we decided we were in need or want. Chris
Dick, thanks for alerting us to an interesting article. Like many Think Advisor articles, it’s a summary of a more in-depth article, in this case from GoBankingRates.com. The Think Advisor article, and original study, indicate that the average income includes a 20% “comfort buffer”, beyond the basic living expenditures. So it’s not as meager as it may have seemed. The Gobankingrate.com study also links to a previous study which provided older data on all 50 states. In that study the average for NJ is about 32% higher than Alabama.
Academic studies like this are often based on averages. To be useful, the study provides a detailed definition of “comfortable” and then uses it consistently across the states. That allows a valid comparison between states. Each state has wide variations within the state. For example, our shared state of NJ has enormous variations from north to south, and even within counties. The cost of living in counties near NYC are twice the value of some rural counties. So it’s not particularly useful to compare our personal situations with a state wide average.
It’s not surprising to me that an article entitled “12 Cheapest States for a Comfortable Retirement” would not be attractive to a relatively affluent retiree in one of the most expensive counties in one of the most expensive states. But millions of people live in those lower cost states, and the averages were generated from real data. So the conclusion that you can have a “comfortable” (as clearly defined in the study) retirement is likely important to many retirees.
As I think about this, if a persons income covers basic expenses, is an extra 10% really a comfort buffer? If a person was living that close to the bone, would they be inclined to spend say $6,000 on a luxury or take on an extra monthly commitment?
The question I was trying to address was how people define comfortable. My poor choice of title apparently got some people thinking it was about my quest.
Buffer or not, I don’t think the definition should be dependent on where a person lives, or relocate unless desired.
This post was intended to discuss how people define comfortable. To see if there is agreement with my definition.
Why would it not be dependent on location? It makes no sense to claim that the amount of money required for a comfortable retirement in Manhattan is the same as that in rural Alabama. If someone is already happy living in rural Alabama, no problem.
How do we get off on this. Who said COL didn’t vary by location? I said a comfortable retirement would not vary relative to the cost involved. If you live in Manhattan, to be comfortable, you need a lot more money than. Alabama. What I was trying to say is that a comfortable retirement should not require relocation to a lower cost area. If that’s desired, fine.
Is this another humble brag thread where the OP can’t imagine being comfortable on anything less than his former executive salary?
I assume the report covers various standard and discretionary expenses that are anticipated to make for a “comfortable” lifestyle in retirement. And it’s the level of discretionary expenses that dictate the degree of comfort. So each individual’s idea of comfort is different and will depend on the discretionary things they simply cannot live without – do you need a cleaner, gardener, 4+ meals out a week? Do you have expensive hobbies like performance cars or fine wine or relative cheap ones like woodworking and craft?
Plenty of people will have plans for the simple things like hiking, cycling, gardening just enjoying the free time at leisure. Trips don’t have to involve spending $1000s.
Part of retirement is deciding how to spend down your time budget just as much as it’s about financial. And I am led to understand that the desire to go-go eventually turns into a slow-go. It’s entirely possible that comfort for a person can be freedom to do chores at leisure or read a book for a day rather than responding to dozens of work tasks, or to be outside on a nice day rather than in pointless meetings. Those things aren’t really covered by any financial budget.
This post was not about me at all it was about a “comfortable” retirement relative to a working life for anyone and how they define that. There are no doubt many ways and levels of being comfortable.
But I suspect however someone else defines it you’d still argue it was too close to the bone or left too much to worry about. As I said what is comfortable is highly personal.
You seem to have a low opinion of people living paycheck to paycheck but in why can’t people be comfortable that way, provided they don’t exceed each month and have a fixed emergency fund.
I know a guy who lives in a trailer in Montana on $1,400 a month. He says he is happy and never had it better while working. I don’t care if a person lives in a cave foraging for food.
I have empathy for people, especially retirees, truly living P to P. They will not have an emergency fund and certainly no way to replenish one if they started with one.
I seriously doubt anyone living with no margin for finically error would not like to live differently. Doesn’t mean wealthy or lavishly, just without financial worry.
Aren’t you just defining a bunch of things that are uncomfortable to you because you’re a safety first sort of guy?
I view comfort and the great experiment of retirement costs as 3 things, budgets ( or in your case income) for essentials, day to day upgrades and luxuries.
Where you put the boundary between those things and how much you allocate to each is again personal but I’d say that once you’ve got the basics covered with margin you don’t need to worry and once you’re over the upgrades/lifestyle tier you’re comfortable. So a person might say for them 2 weeks of domestic vacations is regular upgrade, 4 weeks of longhaul is luxury. Someone else might be more focused on travel as upgrade but happily stick a replacement couch into luxuries.
I see nothing to disagree with. But to use the upgrades and luxuries, you need income that is beyond just paying for essentials. If a person can follow your idea, then it seems to me they are comfortable, but personally I would like to have some reserves beyond income cash flow.
You’re asking too much!
More seriously, re-do it in all in your head without your resources and suddenly living on something around $60k/yr. I mean that was the point of the exercise in the article.
The $60k was defined as comfortable in the various states, but it reads more like living paycheck to paycheck. If paying one’s bills in retirement is being comfortable so be it. That’s not how I would define comfortable. I think a little extra is necessary for that.
I think you missed the slides where it shows how much buffer there was. In Iowa it said you had a $10,000 buffer, on around $5k per month that leaves 20% for discretionary spending.
Not really, I used the higher number, but in any case comfortable is very variable.
Exactly. Your version of comfortable apparently includes a second home. I would find that very uncomfortable.
How did you conclude that? Did I say that in my generic definition?
You live comfortably in a CCRC. That type of comfort is out of reach for the vast majority of retirees.
You asked about comfort. A second home would not make me more comfortable, but less.
A CCRC may be out of reach for most people in the pricey part of NJ, not so true in lower cost areas.
Here is what found online. “The entrance fee for North Carolina CCRCs can start as low as a few thousand dollars and go over one million. However, the typical fees vary between $68,000 and $370,000. As for the monthly fees, these can start at $1,000 and go over $8,000 – per person.
Once again, the typical fees vary between $2,000 and $4,000” Would you agree with these prices?
Would a retiree without a debt free home to sell easily have such fees even in the South?
The median sale price for a house in my county (not the generic “South”) is $470,672 this year (Redfin). The average is $484,426 (Zillow). So even if you hadn’t fully paid off the mortgage you should be able to handle the entry fee. Given most people don’t move in until their 70s, it is reasonable to expect most own their homes debt free.
It is difficult to generalize about CCRC fees, because different CCRCs operate differently. Some have no entry fee and correspondingly higher monthly fees. Some charge less in Independent Living and more in Assisted Living, and others charge the same. Some of the ones referenced are in lower cost parts of NC.
I don’t have the current entry fees for my CCRC, but in 2023 they did indeed range from $75,000 (studio) to $861,000 (two three bedroom apartments with den). Those were the non-refundable rates. The monthly fees next year are higher than your “typical” ones, but this is one of the most expensive counties in NC.
Somehow this post reminds me of the quote; “Luck is when preparation meets opportunity”. Unless someone is truly lucky and hits the lottery, it’s a lifetime of preparation that gives one the opportunity for a comfortable retirement.
As for enjoying the people around us, I’m thinking of the old man working in his front yard. He’s approached by a guy who explains that he’s thinking of moving into the neighborhood, and wonders what the people are like here. The old man asks what his current neighbors are like, and the stranger indicates they are a bunch of buttholes. Old man tells him the people here are the same.
This, I fear, is another of those definitional quagmires.
No required compromises? We all make compromises — even billionaires — though it may be less about money, and more about time and relationships. I want Chinese food tonight, the rest of the family wants pizza, so we end up with pizza. I want to go to Paris, but the rest of the family prefers Venice, so we go to Venice.
No limit on desired activities? I’d like a private jet to fly us to our next vacation spot. But that isn’t in the budget.
In short, we all live with constraints imposed by money, time, health, relationships and more. Compromise is part of life, and arguably it’s good for our happiness. If we have limits imposed on us, we adapt. If we have no constraints, we may find ourselves flailing around in a world of endless choices.
I was simply referring to compromises from a person’s pre-retirement lifestyle, like relocating, or living with one car or giving up the annual vacation to the beach.
Who says pre retirement location is where people want to remain?
If all your kids had ended up living on the West Coast would you resolutely want to stay in NJ?
What about those who have always wanted to move to their spot but work was never really compatible? Mountain, lake, beach, warmer, cooler etc?
Why would you make such a comment? I was clearly talking about retirees forced to relocate for financial reasons. This has nothing at all to do with living where you may desire to live. That’s why “required” is in bold.
Think less of forced – more like amenable if it frees up capital for something else.
Geo-arbitrage may not be a thing for you but it is undoubtedly a thing. Lots of people move out of big cities when they are done working which either frees up equity or enables a more comfortable property.
Access to quality healthcare likely ranks higher in retirement. If you have a DNR you might make sure you have access to non-Catholic hospitals.
If you are planning a move to a CCRC, picking a state with good oversight could be a consideration.
Some people move closer to their kid(s), but that can be a trade off against staying in a familiar place. I don’t have biological children and chose to stay put rather than moving back to the UK.
Not having financial concerns can sometimes be addressed by moving to a cheaper state, or even a cheaper country. I understand Mexico can be a good choice. I once met an American woman who was moving to India to spend the rest of her life in an ashram.
Your life is going to change as you get older.
Yes it will and being able to deal with the changes without added stress is part of being comfortable in my opinion.
I live in Alabama more because marital reasons than preference. As an Oregonian I dislike the climate here for about half the year. But….Alabama does not tax pensions and so my military pension is off limits. Property taxes are very low, however, sales tax very high–10% on most everything including food! I very much consider sales tax on food to be regressive and believe it harms many low income people here. So much of where we retire revolves around family, or where we grew up, rather than some sort of optimization project. Mr. Quinn defines a good retirement quite well in his last paragraph. That’s what I’m shooting for and what I find myself having to work regularly on is the transition from delayed gratification to enjoying the fruits of my labor.
I think living near family and friends trumps living in a lower-cost or beautiful-weather place.
Here here Mark! This was the first thing I thought about reading Dicks’s post. I live in expensive NJ, in close proximity to my daughters, SILs and my 4 grandkids. I wouldn’t consider moving anywhere else in retirement no matter how affordable it was. I would adjust my standard of living to stay close to my family and friends! For those that can move in retirement to more affordable states, more power to them…I hope they are happy and do well in their new homes.
So do I, and being able to do that is part of a comfortable retirement in my opinion.
Agreed. I compromised by moving to a less expensive area (PA from NYC), but less than 100 miles from my sister and daughter, and with access to public transportation, should I decide that I don’t want to drive to see them. So far, after six years, it’s working out well. I’ve also found wonderful new friends and activities that are very fulfilling.