Money Guy Show Summary: “How Much Do You Need to Retire (By State)”

Released on July 30, 2025, the “Money Guy Show” hosted by Brian Preston and Bo Hanson delves into the intricacies of retirement planning, emphasizing how geographical location plays a pivotal role in determining retirement needs. The episode offers valuable insights, practical strategies, and engages listeners through insightful Q&A sessions.

1. Introduction to Retirement Costs by State

Bo Hanson kicks off the episode by highlighting a common query among listeners: “What do I actually need to retire?” He underscores that the answer significantly depends on where you choose to live during retirement.

Brian Preston adds context, explaining the challenge of projecting long-term retirement expenses, especially when considering diverse locations across the United States.

2. Visual Capitalist’s Profile on Retirement Costs

Bo Hanson introduces data from Visual Capitalist, which breaks down annual retirement costs by state, encompassing expenses like food, shelter, transportation, healthcare, and utilities.

Key Findings:

• West Virginia emerges as the most affordable state for retirement, with an average annual spending of $58,000.
• Hawaii stands out as the most expensive, requiring approximately $129,000 annually.
• The national average for retirement spending is around $71,640 per year.

Brian Preston further analyzes these numbers using the 4% withdrawal rule, translating annual expenses into the necessary retirement portfolio. For example, the national average suggests a portfolio of nearly $1.8 million.

Notable Quote:

“What do you have coming in? And what are you going to be able to use to build that awesome retirement?”
— Brian Preston [04:38]

3. The Impact of Pensions and Social Security

Brian emphasizes the importance of income sources like pensions and Social Security, which can significantly offset retirement expenses. Using Hawaii as an example, he illustrates how a combination of pension and Social Security can reduce the required retirement portfolio from $3 million to $2 million, alleviating financial pressure.

Notable Quote:

“Don’t let this panic you. You just need to take inventory.”
— Brian Preston [04:54]

4. Tailoring Retirement Needs to Individual Goals

Bo Hanson stresses that the amount needed to retire is highly personalized. He advises listeners to budget, track expenses, and understand their unique retirement lifestyle to accurately determine their financial requirements.

For younger listeners in their 20s or 30s, Bo suggests aiming to save 25% of gross income, leveraging the power of compounding interest over time.

Notable Quote:

“Your number should be 25%.”
— Bo Hanson [05:48]

5. Homeownership and Financial Independence

A significant portion of the episode debates whether homeownership is essential for financial independence. Bo Hanson advocates that homeownership is not a necessity unless it aligns with one’s personal goals. He shares anecdotes of clients who achieved financial independence without owning a home, maintaining flexibility and focusing on investment growth instead.

Brian Preston counters by acknowledging the traditional American path where home equity constitutes a large part of net worth, urging listeners to not rely solely on home ownership but to actively build investment assets.

Notable Quote:

“Homeownership is not a requirement for financial independence.”
— Bo Hanson [07:28]

6. Listener Q&A Sessions

The show transitions into an engaging Q&A segment, addressing various financial concerns submitted by listeners:

a. Never Buying a Home

Amber H. asks about the implications of never buying a home on net worth and retirement. Bo Hanson reiterates that financial independence doesn’t mandate homeownership, highlighting the importance of saving and investing to build a robust portfolio.

Notable Quote:

“You just need to do saving and investing, live on less than you make.”
— Brian Preston [09:09]

b. Maximizing Retirement Accounts

Danny Tsunami inquires about prioritizing Roth IRA contributions over employer 401(k) plans. The hosts explain the flexibility and control offered by Roth IRAs, such as selecting custodians and investment options, while also encouraging the use of both accounts to maximize retirement savings.

Notable Quote:

“It's not an either or, it's really an and.”
— Brian Preston [12:10]

c. Inherited Bonds Reinvestment

Febreze seeks advice on reinvesting a $10,000 inheritance from bonds. Bo Hanson recommends assessing one’s financial position using their Financial Order of Operations guide and suggests options like Roth IRAs or 401(k)s based on individual circumstances.

Notable Quote:

“Use it to put more money in your 401(k) or your Roth IRA.”
— Bo Hanson [37:18]

d. Medical Debt and Emergency Funds

Matt C. questions whether medical debt for his child’s braces is “good debt” and whether to use his emergency fund. Bo Hanson advises paying off the debt swiftly, especially if it comes with 0% interest terms, while Brian emphasizes the importance of maintaining an emergency fund to avoid financial strain.

Notable Quote:

“It's a finite plan about how you're going to knock this out.”
— Bo Hanson [49:15]

e. HSAs for Disabled Veterans

Anthony F. asks if he should enroll in a high deductible plan to open an HSA despite utilizing VA healthcare and opting out of employer health insurance. Bo Hanson advises evaluating the benefits of current insurance versus potential HSA advantages, suggesting that for some, maintaining superior insurance coverage may be more beneficial than opening an HSA.

Notable Quote:

“Assess what’s best based on your specific medical uses.”
— Bo Hanson [55:20]

f. Balancing Retirement and Starting a Family

Milkman's concern about being on track for retirement while planning to start a family prompts Bo Hanson to highlight the importance of saving 25% of gross income to alleviate financial stress during life transitions. Brian Preston shares personal anecdotes to emphasize balancing financial discipline with life’s personal milestones.

Notable Quote:

“Follow the order of operations even when you're in the messy middle.”
— Rebi [63:41]

7. Closing Remarks and Resources

As the episode concludes, Brian and Bo encourage listeners to utilize the resources available on moneyguy.com, including free downloads and calculators to better manage their financial situations. They emphasize that money is a tool meant to provide freedom and fulfillment, urging listeners to focus on what truly matters in their lives.

Notable Quote:

“There’s a better way to do money.”
— Brian Preston [65:20]

Key Takeaways:

• Retirement Needs Vary by Location: Your state of residence significantly impacts how much you need to retire comfortably.

• Flexibility in Financial Planning: Individuals should tailor their retirement strategies based on personal goals, leveraging tools like the 4% withdrawal rule and considering income offsets from pensions and Social Security.

• Homeownership is Optional: While beneficial, owning a home is not a prerequisite for financial independence. Focus on saving and investing to build a diversified portfolio.

• Maximize Retirement Accounts: Utilize both Roth IRAs and employer-sponsored 401(k) plans to optimize retirement savings, taking advantage of their unique benefits.

• Strategic Debt Management: Evaluate the terms and implications of any debt, especially medical or related to major life expenses, ensuring it aligns with your financial stability.

• Adapt to Life Changes: Whether inheriting assets, starting a family, or dealing with medical expenses, maintain financial discipline and use available resources to navigate transitions smoothly.

For more detailed strategies and personalized financial advice, visit moneyguy.com and explore their comprehensive resources.