Longer lifespans mean most advisors recommend $1 million (at a minimum) saved for retirement. Sounds great—but how realistic is it for the average American?
In a recent study, GOBankingRates helpfully broke it out by state, listing those where it is easiest to hit the millionaire mark, and those where it’s hardest.
Overall, the best states for saving money for retirement are located in the South.
Starting with the bad news first, here are the five where it’s hardest, followed by the five easiest.
Bottom 5
- Vermont
GOBankingRates blames high property taxes and one of the lowest average interest rates on a savings account.
“That’s why it shouldn’t be too surprising that Vermont is one of the states with the poorest retirees,” it adds. For the state with the only socialist senator, it’s not a great look.
- Oregon
“Oregon has the second-highest income tax rate for median incomes, the second-lowest average return on a savings account and one of the highest costs of living,” all of which make growing a nest egg that much harder.
- Hawaii
The Aloha State has the highest cost of living and the third-highest state income tax rate for median incomes.
“So not only will you have one of the hardest times saving up $1 million for retirement, but that $1 million will only last you about 12 years.”
- Montana
Montana not only has one of the highest income tax rates in the country, but its banks are offering the most meager returns.
- Connecticut
In addition to being one of the pricier states to live in, Connecticut has the sixth-highest property tax rate for median earners, the site notes.
Top 5
- Texas
With no state income tax, Texas is one of the best places to live if you want to save up $1 million for retirement. And that money goes farther, much farther.
- Wyoming
Wyoming has no state income tax, and it’s also among the lowest in the U.S. for its effective property tax rate as well.
- Louisiana
Louisiana has an effective property tax rate lower than every state in the country save two—Hawaii and Alabama.
- Washington
If you don’t mind the rain (big if), Washington has a lot to offer for people looking for somewhere where they can reach their six-figure retirement goal the fastest.
- Utah
“Utah wins out as the best state to live in if you’re looking to save $1 million for retirement, driven by one of the lowest effective property tax rates in the country,” the site concludes.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
