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Saving for retirement is one of the primary underlying reasons for many personal finance decisions, from budgeting to investing. Like any money goal, however, saving for retirement — not to mention saving enough for retirement — is often easier said than done. More than 4 in 10 Americans fear they’ll never be able to retire, according to retirement savings platform SimplyWise.
With that being said, some states may offer a better environment for adults 65 and older to save and stay financially healthy, whether through affordable housing or something else. Overall, an average of 8.9% of these older adults across the 50 states and the District of Columbia live below the poverty line, according to a MagnifyMoney analysis of U.S. Census Bureau data.
Considering poverty, homeownership and mortgage status, housing cost burdens and retirement income, MagnifyMoney researchers created an index score to rank the states by older Americans’ ability to retire. Here’s what analysts learned.
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Older adults in poverty
While the coronavirus pandemic may have changed retirement plans for many adults, the share of older Americans nationally who may be struggling to make ends meet is relatively small. Across the 50 states and the District of Columbia, 8.9% of adults 65 and older live below the poverty line.
In 19 states and the District of Columbia, however, higher rates than the average of adults 65 and older may not be able to afford necessities.
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Methodology
MagnifyMoney researchers looked at five metrics across all 50 states and the District of Columbia to find the places where residents are best positioned for retirement. Analysts used the following metrics, which looked solely at U.S. residents 65 and older:
- Poverty rate
- Housing cost burdened rate (the percentage of older adults who spend 30% or more of their income on housing)
- Homeownership rate
- Rate of adults with retirement income
- Rate of homeowners without a mortgage
All data comes from the U.S. Census Bureau’s 2019 1-year American Community Survey.
Analysts ranked every state and D.C. in each metric and created a final score for each one based on the average rank.
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25. North Dakota
- Poverty rate: 8.00%
- Housing cost burdened rate: 23.60%
- Homeownership rate: 75.40%
- Rate of adults with retirement income: 48.20%
- Rate of homeowners without a mortgage: 78.70%
- Index score: 60.34
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24. Mississippi
- Poverty rate: 13.20%
- Housing cost burdened rate: 23.60%
- Homeownership rate: 82.30%
- Rate of adults with retirement income: 49.30%
- Rate of homeowners without a mortgage: 72.20%
- Index score: 61.49
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23. Arkansas
- Poverty rate: 10.50%
- Housing cost burdened rate: 22.00%
- Homeownership rate: 81.00%
- Rate of adults with retirement income: 52.10%
- Rate of homeowners without a mortgage: 71.20%
- Index score: 62.64
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22. Missouri
- Poverty rate: 8.90%
- Housing cost burdened rate: 26.40%
- Homeownership rate: 79.40%
- Rate of adults with retirement income: 60.30%
- Rate of homeowners without a mortgage: 66.20%
- Index score: 64.37
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21. Pennsylvania
- Poverty rate: 8.30%
- Housing cost burdened rate: 29.30%
- Homeownership rate: 77.60%
- Rate of adults with retirement income: 63.80%
- Rate of homeowners without a mortgage: 67.40%
- Index score: 64.94
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20. South Carolina
- Poverty rate: 10.10%
- Housing cost burdened rate: 25.50%
- Homeownership rate: 85.30%
- Rate of adults with retirement income: 58.50%
- Rate of homeowners without a mortgage: 62.90%
- Index score: 65.52
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19. Oklahoma
- Poverty rate: 9.70%
- Housing cost burdened rate: 22.70%
- Homeownership rate: 81.50%
- Rate of adults with retirement income: 53.40%
- Rate of homeowners without a mortgage: 70.30%
- Index score: 65.52
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18. Montana
- Poverty rate: 8.60%
- Housing cost burdened rate: 26.90%
- Homeownership rate: 81.70%
- Rate of adults with retirement income: 55.80%
- Rate of homeowners without a mortgage: 70.00%
- Index score: 66.09
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17. Ohio
- Poverty rate: 8.30%
- Housing cost burdened rate: 27.10%
- Homeownership rate: 78.80%
- Rate of adults with retirement income: 64.80%
- Rate of homeowners without a mortgage: 62.50%
- Index score: 67.24
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16. South Dakota
- Poverty rate: 7.70%
- Housing cost burdened rate: 23.30%
- Homeownership rate: 76.50%
- Rate of adults with retirement income: 53.60%
- Rate of homeowners without a mortgage: 75.80%
- Index score: 67.82
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15. Wisconsin
- Poverty rate: 7.40%
- Housing cost burdened rate: 30.20%
- Homeownership rate: 77.00%
- Rate of adults with retirement income: 64.50%
- Rate of homeowners without a mortgage: 65.90%
- Index score: 69.54
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14. Minnesota
- Poverty rate: 7.40%
- Housing cost burdened rate: 29.30%
- Homeownership rate: 78.40%
- Rate of adults with retirement income: 62.70%
- Rate of homeowners without a mortgage: 65.20%
- Index score: 69.54
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13. Alabama
- Poverty rate: 10.50%
- Housing cost burdened rate: 22.80%
- Homeownership rate: 83.40%
- Rate of adults with retirement income: 56.80%
- Rate of homeowners without a mortgage: 66.60%
- Index score: 70.69
Image Credit: Sean Pavone.
12. Tennessee
- Poverty rate: 9.70%
- Housing cost burdened rate: 23.40%
- Homeownership rate: 82.30%
- Rate of adults with retirement income: 57.10%
- Rate of homeowners without a mortgage: 68.40%
- Index score: 72.99
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11. Alaska
- Poverty rate: 6.90%
- Housing cost burdened rate: 25.90%
- Homeownership rate: 81.00%
- Rate of adults with retirement income: 58.20%
- Rate of homeowners without a mortgage: 63.60%
- Index score: 73.56
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10. Virginia
- Poverty rate: 7.10%
- Housing cost burdened rate: 27.00%
- Homeownership rate: 80.70%
- Rate of adults with retirement income: 64.50%
- Rate of homeowners without a mortgage: 58.40%
- Index score: 74.71
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9. Indiana
- Poverty rate: 7.70%
- Housing cost burdened rate: 25.50%
- Homeownership rate: 81.70%
- Rate of adults with retirement income: 62.80%
- Rate of homeowners without a mortgage: 59.60%
- Index score: 77.59
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8. Kansas
- Poverty rate: 7.20%
- Housing cost burdened rate: 25.20%
- Homeownership rate: 79.40%
- Rate of adults with retirement income: 59.40%
- Rate of homeowners without a mortgage: 69.70%
- Index score: 79.89
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7. Michigan
- Poverty rate: 8.40%
- Housing cost burdened rate: 27.00%
- Homeownership rate: 82.00%
- Rate of adults with retirement income: 66.80%
- Rate of homeowners without a mortgage: 64.00%
- Index score: 81.61
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6. Delaware
- Poverty rate: 7.30%
- Housing cost burdened rate: 27.80%
- Homeownership rate: 84.90%
- Rate of adults with retirement income: 71.10%
- Rate of homeowners without a mortgage: 57.30%
- Index score: 82.76
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5. Idaho
- Poverty rate: 6.90%
- Housing cost burdened rate: 25.60%
- Homeownership rate: 83.90%
- Rate of adults with retirement income: 59.90%
- Rate of homeowners without a mortgage: 60.00%
- Index score: 83.33
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4. Iowa
- Poverty rate: 7.40%
- Housing cost burdened rate: 24.30%
- Homeownership rate: 80.40%
- Rate of adults with retirement income: 59.80%
- Rate of homeowners without a mortgage: 71.60%
- Index score: 86.78
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3. Wyoming
- Poverty rate: 7.40%
- Housing cost burdened rate: 21.60%
- Homeownership rate: 84.70%
- Rate of adults with retirement income: 56.10%
- Rate of homeowners without a mortgage: 70.60%
- Index score: 92.53
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2. West Virginia
- Poverty rate: 9.30%
- Housing cost burdened rate: 17.40%
- Homeownership rate: 85.20%
- Rate of adults with retirement income: 61.10%
- Rate of homeowners without a mortgage: 73.80%
- Index score: 98.28
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1. Utah
- Poverty rate: 6.20%
- Housing cost burdened rate: 24.50%
- Homeownership rate: 86.40%
- Rate of adults with retirement income: 64.50%
- Rate of homeowners without a mortgage: 60.20%
- Index score: 100
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Still time to save
Having a little bit saved for retirement is better than having nothing. The best way to boost your retirement savings might be to find a time machine to go back and get started sooner, but it’s never too late to stash what you can and make the most of your golden years.
Use these tips to accelerate your savings without a ton of time:
- Tighten up your budget to increase savings: Examine your current spending habits to see if there’s room to cut back and contribute more toward retirement savings. “Take advantage of ‘catch-up contributions’ — several tax-advantaged retirement vehicles have higher contribution limits for people over the age of 50,” says MagnifyMoney senior content director Ismat Mangla. Even a relatively small amount in a high-yield savings account can provide a little passive retirement income.
- Use your home to your advantage: “Your home may be a source of liquidity in retirement,” Mangla says. Options like reverse mortgages or home equity loans may help older adults better manage their retirement budgets.
- Keep your retirement plans realistic: Unfortunately, a dream retirement may not be accessible for everyone. Use MagnifyMoney’s retirement calculator to help imagine a retirement that fits your needs and financial ability. “You might have to refigure what retirement looks like for you,” Mangla says. “For example, maybe you continue working in a part-time or different capacity, or perhaps you find ways to cut expenses significantly, like through moving.”
Related:
- Are you planning to work after retirement? You’re not alone
- Your grandkids can get AARP benefits. Yes, really
This article originally appeared on MagnifyMoney.com and was syndicated by MediaFeed.org.
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