A comfortable retirement doesn’t come cheap.
While you may hear stories of people retiring on as little as $2,000 a month, the reality for most of us is likely to be much different. Indeed, according to data from the Bureau of Labor Statistics, the average over-65 household will spend nearly $50,000 a year. The biggest chunk of that is on housing at more than $16,000 a year, but health care is high on the list too (about $6,600), as is transportation ($7,500) and groceries ($3,815). (Of course, people who have paid off their mortgage can dramatically slash this amount, and there are other ways to save as well.)
What’s more, the annual spending for the over-65 set in some states is likely to be far higher, according to an analysis by personal finance site GoBankingRates.com. The analysis looked at consumption expenditures of Americans aged 65 and older for items like groceries, housing (includes utilities and housekeeping), transportation, health care and more; it then adjusted those figures to every state’s itemized cost of living index, and added an additional 20% savings buffer (so you can retire comfortably).