As I approach the big SIX ZERO this year, retirement and related considerations are taking a place in the planning process more than any time prior. Fortunately, retirement seeds were planted decades ago in savings and tax-deferred accounts, stocks and real estate investments. As the check-out date from the workforce looms sometime within the coming decade, however, many other factors come into play. Medical, costs of living, lifestyle, weather-climate, family and housing are concerns for most. Taxes play an integral part and are too often overlooked in the decision process. Many older Americans are also concerned about part or full time work and related income potential after retiring from their latest career.
The National Institute on Retirement Security has just completed a study of all states focusing on these and many other issues. The study, The Financial Security Scorecard: A State-by-State Analysis of Economic Pressures Facing Future Retirees examines multiple metrics impacting retirees. They focused on factors impacting incomes, costs of living factors and the availability of work and related income from potential jobs. The study was tilted towards future retirees rather than those already in retirement. A determinant many prospective retirees forget to factor in is the tax they will pay as pretax retirement investments are converted to ordinary income (which essentially are all tax-deferred investments except for releases from Roth IRAs).
MarketWatch just released a news report on the ten worst states. Pay attention to the title which does not say the 10 worst states in which to retire, but rather the 10-worst states for retirement security.
So where are the worst states to retire, as far as economic factors impacting retirement security are considered: Potential Future Retirement Income; Retiree Costs; and Labor Market Opportunities?
To read the states in the bottom 10-summary as reported in MarketWatch click: http://www.marketwatch.com/story/10-worst-states-for-retirement-security-2014-04-17?siteid=nwhpm
To examine the entire report from the National Institute on Retirement Security including all states, click http://www.nirsonline.org/storage/nirs/documents/2014%20Scorecard/final_2014_scorecard.pdf
For those on pensions, whether private or public, there may need to be concerns on the long-run solvency of future funds for some, given the current under-funding in many retirement programs. This is an entirely different question not addressed by this study, however.
For many, the decision in where to live and reside in retirement has no economic ties or considerations as they want to be near family and friends regardless of associated costs. For others, they may have had life-long dreams of retiring in a specific region or town and will do so regardless of economics. Yet for some, economics will come into play in their retirement decisions.
For those with flexibility that have yet to retire, these factors may indeed enhance their satisfaction and quality of life over their retirement lifespan.