At Dixon Financial Group, LLC, Jacob and I invest a significant amount of time discussing our clients' retirement aspirations. While we cover a wide range of topics, one crucial question often surfaces later in the planning process: 'Where do you see yourself living after retirement?'
It might seem like a small detail in the grand scheme of things, but trust me, your post-retirement address can dramatically impact how much you'll need to save. Having this 'big picture' helps Jacob and me look ahead with greater accuracy, allowing us to craft a more realistic and practical retirement plan for you.
Think about it: the cost of living varies wildly across the United States. Everything from housing and healthcare to groceries and transportation can be significantly more expensive in one state compared to another. What might be a comfortable retirement nest egg in a low-cost state could barely cover your basic expenses in a high-cost one.
The Geography of Retirement: Affordable vs. Expensive States
As of mid-2025, recent studies continue to highlight the vast differences in retirement costs across the nation. For instance, a recent analysis by Newsweek (June 2025) and Fox Business (June 2025) highlights the significant savings required, depending on where you settle.
States Generally Considered More Affordable for Retirement (as of 2025):
These states often boast lower housing costs, more favorable tax environments for retirees, and generally lower costs for everyday goods and services.
- West Virginia: Frequently cited as one of the most affordable.
- Mississippi: Another top contender for low cost of living.
- Oklahoma
- Kansas
- Arkansas
- Kentucky
- Alabama
- Iowa
- Missouri
- Indiana
- Ohio
- North Dakota
- Wyoming
States That May Cost More for Retirement (as of 2025):
These states, while often offering desirable amenities or climates, come with a higher price tag for retirement.
- Hawaii: Consistently ranks as the most expensive.
- Massachusetts
- California
- New York
- Alaska
- New Jersey
- Vermont
- Washington
- Maine
- Arizona
- Oregon
- Rhode Island
- Connecticut
The Shifting 'Magic Number': What Studies Say You'll Need
Beyond location, the overall financial landscape and economic factors also influence how much Americans think they'll need for retirement. Here's a look at some current projections:
- For Retirement Today (2025): The Northwestern Mutual 2025 Planning & Progress Study, released in April 2025, found that Americans, on average, believe they'll need $1.26 million to retire comfortably. This figure fluctuates based on economic conditions, but it gives us a good benchmark.
- Looking Ahead to 2030, 2035, and 2040:
- While there isn't one definitive 'magic number' for these future dates, studies consistently show the importance of long-term saving and planning for potential adjustments.
- For instance, ongoing discussions around Social Security solvency by 2033-2035 suggest a potential 17% reduction in benefits if no legislative changes are made. A Businesswire analysis (April 2025) estimates that to offset a possible 17% benefit cut in 2035, individuals might need to save an additional $100,000. Highlighting the need to factor in potential changes to benefit programs.
- Fidelity's general guideline, which emphasizes saving 10 times your income by age 67, provides a helpful long-term target. This target is designed to help maintain your pre-retirement lifestyle, assuming a 15% annual savings rate starting at age 25. While this is a general rule, it underscores the consistent effort needed over decades.
- Furthermore, rising life expectancies, as highlighted in a June 2025 Wharton study, mean retirement periods are getting longer, which naturally requires more accumulated savings to sustain a desired lifestyle.
Let's Plan Your Perfect Retirement, Location Included!
The key takeaway here isn't to get bogged down by these large numbers but to understand that your retirement vision, particularly where you choose to live, directly impacts your financial strategy.
When you work with Jacob and me, we take a comprehensive approach. We'll explore your post-retirement life goals, including your desired location. This crucial piece of information allows us to:
- Tailor your savings goals: We can create a more precise target for your retirement fund based on the estimated cost of living in your preferred state.
- Optimize your investment strategy: Knowing your geographic goals helps us factor in potential regional economic trends and tax implications.
- Develop a flexible plan: Life happens, and plans can change. We'll build in flexibility to account for potential shifts in your retirement location desires.
Don't let the idea of a 'magic number' or the varying costs of living overwhelm you. By openly discussing your retirement location dreams with Jacob and me, we can build a comprehensive and personalized financial plan designed to help you achieve the retirement you truly envision, wherever that may be.
Ready to turn your retirement dreams into a reality? Contact Dixon Financial Group today, and let Jacob and me craft a personalized plan for your ideal retirement, complete with the perfect address!