A recent study by PYMNTS found that 53% of older Americans live paycheck to paycheck.
Throughout the past several years of economic hardship and soaring inflation, the boomer generation stayed afloat, doing better than other age groups. However, as prices remain stubbornly high, basic necessities like groceries, housing, electricity, and gasoline impact all Americans, including the oldest ones.
With a growing number of seniors on a fixed budget, many search for ways to survive financially. To feel less stressed about money, some consider a move to states where it's cheaper to live, especially if they're trying to stick to a tight budget. The good news is that a handful of states offer a lower cost of living, are more tax-friendly, and provide higher Supplemental Security Income.
The Most Affordable States in the Country
A Seniorly report analyzed states' data to identify the most affordable and suitable retirement locations for seniors. The study cited Iowa, New Mexico, Tennessee, Oklahoma, and South Dakota as the top five choices.
The study utilized various criteria — housing costs, Medicare costs, inflation, social security payments, costs of necessities, and taxes — to inform states' ranks.
Iowa fared well in all areas, taking a wide lead over other states. Statistics that contribute to the state's high score include low median rent costs, high Social Security payments, and no retirement income tax for residents over age 55.
When planning for retirement, seniors should consider locations that support citizens living on budgets. While using retirement calculators is an easy way to estimate one's financial health, retirees or those on fixed incomes must consider where they can achieve an enhanced quality of life, lower cost of living, and other aspects.
The Most Expensive States in the United States
California, New York, Massachusetts, Washington D.C., and Connecticut are the most expensive states in the U.S. These states have high rent costs and tax policies that are not senior-friendly. In these states, homeownership is low, while rent costs remain high.
Media personality and financial consultant Dave Ramsay outlines in his Baby Steps that tenants' monthly housing payments should not exceed 25% of their take-home pay, but renters in these high-cost states often struggle to find such affordability. The median monthly rent in Massachusetts and New York are $3,200 and $3,013, respectively.
California is the most expensive state, with average gas prices nearing $5 (or more) per gallon and rampant inflation. However, it offers the country's highest Social Security payments — about $780 monthly. Despite this, the state remains unaffordable for the average American.
The Best and Worst States of Each Metric
The metrics used highlight the states' helpful and harmful features. Homeownership is highest in West Virginia, Utah, and South Carolina, while it is lowest in Washington, D.C., New York, and Rhode Island. Renters will find the most affordable spaces in North Dakota, West Virginia, and Iowa and the highest in Massachusetts, New York, and Hawaii.
Alaska, Florida, Iowa, and Mississippi are home to the lowest taxes; California, Connecticut, Massachusetts, and Montana have the highest taxes.
Oregon, Montana, Hawaii, and New Mexico are the best states for Medicare hospital spending. Conversely, Louisiana, New Jersey, Texas, and Nevada are the worst.
Supplemental Security Income (SSI) remains a fundamental deciding factor for seniors. Pennsylvania ranks No. 1 with $1,201, followed by Hawaii at $1,066. The lowest SSI is in North Dakota, at $562, followed by Alaska at $576.
Oklahoma was the best state for monthly grocery shopping, at $206. The same shopping trip in the District of Columbia was $504. Washington, D.C., also took the prize for the worst state for inflation, at $1,414 a month, whereas Arkansas was just $705 a month.
What Can Seniors Do?
Seniors whose retirement savings aren't stretching as much as hoped or who don't have any retirement can still find ways to make ends meet. Budgeting is the best place to start, followed by cutting out unnecessary expenses.
Some seniors may enjoy looking into gigs or part-time low-stress jobs after retirement to help supplement their income. Getting a roommate or moving in with family is also a viable option. In trying times, consumers must strategize to stay afloat financially. The future looks brighter, but rainy days remain ahead.
This article was produced by Media Decision and syndicated by Wealth of Geeks.
Reader Comments(0)