According to Wray Mathews, Where you decide to reside as a retiree can have a significant impact on your retirement funds. A blog post by the Squared Away Blog at the Center for Retirement Research at Boston College considered the best fit for retired Americans when it comes to the cost of living, and its standard may be unexpected.
The post refers to the University of Massachusetts’ Gerontology Institute’s examination of all 59 U.S. states that looks at the differences between the cost of living in the state and the income of a retired American. The research pointed out there are retirees that end up in the situation that they call a gap, where their retirement earnings are over the poverty line but still do not have enough for financial security. There are fewer retirees under the poverty line than there are retirees that are just above it, keeping their heads out of the water.
18.2% of older Americans live under the federal poverty line, while 32.1% are just over the line but do not have enough to be financially secure.
Wray Mathews said Interestingly, the lowest cost-of-living states may have a bigger percentage of older adults just above that poverty level. Why? Because the wages in these states may not be sufficient to even live comfortably with their low cost of living.
Some lowest cost of living states were around the same level as the highest cost of living states because Social Security benefits and pensions may not be able to keep up the advance though the salaries are fairly higher.
According to Wray Mathews, the Elder Index that was created by the University of Massachusetts Boston’s Gerontology Institute, along with a national advisory board and Wider Opportunities for Women, economic security is where older individuals can afford basic living expenses without the need for social programs, gifts, or borrowed money.
Based on this index, the five states with the highest gap are:
California, where 27.4 percent of the elderly are below the index, 22.1 percent are in the gap of being above the poverty line but still without financial security, and 5.3 percent are at the poverty level.
In Mississippi, 29.5 percent of people are below the elderly index, with 23.7 percent being in the gap, and 5.8 percent of the elderly are under the poverty line.
Massachusetts has people below the elderly index by 29.7 percent, 25.1 percent are in the gap, while 4.6 percent are considered impoverished.
New York has 30.4 percent of people below the elderly index, 24 percent are in the gap, while 6.4 percent are under the poverty line.
Vermont has the largest percentage of people under the elderly index, with 34.8 percent, 31.1 percent are in the gap, and 3.7 percent are in the poverty level.
