Retirement Dreams in Massachusetts: The High Cost of Living and Saving

Retiring in Massachusetts is a big dream for many, but it comes with a hefty price tag. The state is known for its high living costs, making it one of the most expensive places to live in the U. S. This means that saving for retirement here requires careful planning and a substantial amount of money. First, let's talk about the numbers. Experts suggest that most people will need millions to retire comfortably in Massachusetts. This might sound shocking, but when you break it down, it makes sense. A million dollars might seem like a lot, but when you divide it by 30 years, it's about $33, 000 a year. That's roughly $2, 700 a month or $600 a week. Does that sound like a comfortable retirement to you? To figure out how much you need, start by asking yourself some important questions. What will your expenses be when you retire? Do you plan to stay in Massachusetts or move to a more affordable state? At what age do you want to retire? How long do you expect to live? And do you want to leave anything behind for your family or favorite causes? Here's a simple rule to follow: take your last year's salary before retirement and multiply it by 10. This gives you a rough estimate of how much you should have saved. For example, if you're currently earning the median salary in Massachusetts, which is around $81, 170, and you expect a 3% raise each year, your future salary at 65 would be about $228, 401. Using this rule, you would need $2. 28 million to retire. But it's not just about your salary. You also need to consider your expenses. A good rule of thumb is to have 25 times your annual out-of-pocket expenses saved up. To maintain your standard of living, you need at least 80% of your pre-retirement income per year. So, if your pre-retirement annual expenses are $80, 000, you would need $64, 000 to meet your annual expenses in retirement. Using this number, you would need $1. 66 million to cover your retirement costs. Now, let's talk about the cost of living in Massachusetts. It's 49% higher than the national average. Housing costs alone are 109% higher, which means you'll need about $2, 508 per month for a single person or $4, 598 per month for a family of four. Food expenses are 15% above the national average, and utilities, transportation, and health care costs are 16. 1% higher. If you're thinking about moving to a more affordable state, consider Arkansas, Mississippi, or South Dakota. They have the lowest cost of living in the country. But remember, if you work in Massachusetts before retirement, it ranks second highest in per capita income. Retirement age is another important factor. There are many things to consider, including your financial savings, health condition, family obligations, and level of work satisfaction. Social Security offers minimum benefits at 62, with the full benefit age not until 67. Some people also defer receiving monthly Social Security benefits to maximize their benefit at 70. Longevity is also a big factor. In Massachusetts, men who retire at age 65 can expect to live 18 more years to 83, while women can expect to live 21 more years to 86. Living longer means you'll need more savings to support yourself. Lastly, if you plan to leave an inheritance for your family or make a contribution to nonprofits, you will need to set aside more funds. The key is to start saving young to build up your funds. The more you save today, the better your retirement future will be.