Transcript
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It'S my pleasure to welcome you here to the Clark Howard Show. You know our mission is to serve you with advice and information that empowers you to make better financial decisions in your life. So how much do you really need to retire? It's a question that people focused on financial independence later in life and not having to work the rest of your life really think about. And the answer is so variable it's surprising. I want to tell you one way to really think about it that makes a huge difference later today. We have had so much inflation in the restaurant industry. I mean, just try to imagine what it's like being a restaurateur today with expenses across the board, not just food having gone up so much, but the customers are in squeeze play. So the restaurants are in a squeeze play that suddenly you and I as consumers are starting to get the better deal. I'll tell you what I mean later in this podcast. So the question of what you need for retirement does not have one automatic answer because a lot has to do with lifestyle you're used to living. But what's so significant is how different the amount of money it is you need to have in retirement depending on where you choose to retire. Americans are much less mobile than we used to be. But once we're not working anymore or preparing to not work anymore, that's when one of the most important things for people to think about is where you're going to decide to live on the money you have for retirement because there's such a giant difference in what it costs from one place to another. I've talked before in the past about people who are moving to foreign countries for retirement, and for a lot of Americans that's a bridge too far, but one that now people in the millions are doing living elsewhere in retirement because their money goes so very much further. Lane and I have a friend who has not been able to save a meaningful amount of money for retirement. And she's already scoped and targeted where she's moving when she retires in two years. And she's leaving the United States, even though her roots are here, her family's here, she's going elsewhere because it's so much cheaper. But even though the number of people doing that is so much larger than it used to be, most of us are going to want to stay in the US and do you know from the cheapest state to live in to the most expensive for living expenses and retirement, that it's three times more expensive to live in the most expensive state in the country, which is Hawaii, versus the cheapest state in the country, which I think is West Virginia. West Virginia, you actually have one third the living costs, and that's just the most extreme because the most expensive states generally are at least twice as expensive to retire in as the least expensive states. And a lot of states are pretty close in cost at either extreme. It's almost like barbell that you have a bunch of the very inexpensive states clumped together at one end and the most expensive clumped at the other end pretty close together. And so there is such a giant difference from one place to another where somebody chooses to live. And so obviously you don't want to be lonely. So it helps if you have friends or family in a place that you consider moving. But there's a wide variety of places pretty geographically dispersed in the country where the cost of living is much, much, much lower than the really high cost places. I mean, where are things really expensive getting away from Hawaii? Top of the list, Massachusetts. I mean, it's no wonder so many people move in retirement who want to stay in New England. From Massachusetts to New Hampshire.