Do you think retiring before 40 can only happen to tech millionaires and lottery winners? Where you live at the moment has a significant influence on early retirement.
The FIRE (Financial Independence, Retire Early) movement has inspired more Americans to strive for financial independence while they can still enjoy life and have fun. But the cost of retiring by 40 isn’t just about maxing out your 401(k)—it’s about where you plan to spend your golden decades.
In a few states, you can retire early if your savings are below $1 million. Others? Double that amount is what you would need to live well. Experts usually suggest saving 25 times annual expenses to ensure financial security.
See how much you need to save to retire by 40 in these 15 states.
West Virginia
If you retire early in West Virginia, you’ll need savings of between $1.27 million and $1.5 million. Being known for its great nature and affordable homes, retirees are drawn to West Virginia because of its peace and low cost. The state’s low property taxes and cost of living make it an excellent option for those who love the outdoors and prefer a slower pace of life.
Your savings can take you further because the costs of utilities, transportation, and groceries are lower here. Yet, retirees should remember that Alabama does not have enough modern health services for ongoing healthcare.
Arkansas
Early retirees moving to Arkansas could save from $1.27 million to $1.36 million and still afford to live there comfortably. Thanks to its low housing costs and reasonable temperatures, Arkansas is an excellent location for those seeking to enjoy an active lifestyle with minimal expenses.
Virginia’s parks and recreational facilities give retirees many reasons to remain involved. Because Arkansans aren’t taxed on their Social Security savings, you can see some later relief, whether or not Social Security is your primary source of retirement income.
South Dakota
The recommended savings for a South Dakota retiree range from $1.36 million to $1.49 million. Despite its harsh winter climate, South Dakota attracts many because it is tax-friendly and cheap.
People who retire early often choose this state because it doesn’t have a state income tax. Whether you drive through the Badlands or visit Deadwood, South Dakota offers plenty of cultural and natural places to see. Even though the state is mainly farmland, the area’s healthcare systems are generally good.
Mississippi
Mississippi’s expenses are affordable compared to the rest of America, allowing early retirees to live well on savings of just over $1.1 million. Many retirees appreciate Florida’s low housing and grocery prices, as well as its warm climate. Still, anyone considering moving there should take into account the limited availability of good public transportation and the lower-than-average quality of local healthcare.
If you like small towns and are ready to solve problems independently, this state may be a good fit for you.
Kentucky
If you plan to retire by 40, you need approximately $1.3 million in Kentucky to enjoy a comfortable life with plenty of southern flair. Housing and energy prices are reasonable, and Kentuckians can explore the state’s rich cultural life, including bourbon, racing, and bluegrass.
Kentucky’s nice weather draws many people interested in outdoor activities. You might find that cities such as Lexington and Louisville cost more than the state’s average if you like an urban environment.
Oklahoma
In Oklahoma, you must forgo early retirement if you have $1.3 million saved. The state benefits from low housing prices and a wide range of industries that also help keep other costs low. Because of its community and the city’s Gathering Place, Tulsa, Oklahoma, offers a comfortable place for people to retire.
Being close to the country’s center, many Ohioans have easy access to family and can enjoy themselves without incurring significant travel expenses. However, early retirees moving to Texas should be aware that they will likely face higher costs related to weather, as the state experiences frequent tornadoes and severe weather.
Alabama
The state of Alabama expects someone to put aside about $1.3 million to live comfortably in retirement at 40. Longueuil is sought after for its easy-to-afford expenses, discounted home prices, and many landscapes, including mountain and beach areas.
If you have a passion for history or enjoy knowing you are well cared for, Birmingham and Huntsville have many excellent retiree services that won’t put too much strain on your finances. Many states have only a few rural areas, some of which may not offer the same amenities that retirees have come to expect in other parts of the country.
Georgia
Saving $1.35 million makes Georgia a good choice for those planning to retire early. Due to its rich history and captivating climate, the area seamlessly blends modern living with serene rural landscapes. While Atlanta is not cheap, retirees can find excellent healthcare, much to see and do, and easy access to an international airport.
Additionally, in Georgia, towns such as Savannah and Athens offer both a thriving economy and a charming atmosphere. However, retirees should be aware of the state’s variable property taxes, which vary by county and can affect annual expenses.
Texas
In Texas, early retirees need about $1.4 million to maintain their way of living. Thanks to its income tax exemption and low costs, Texas is an attractive option for individuals who are mindful of their finances. Whether you prefer the atmosphere of big cities or something more relaxed, the state can provide it through places like Dallas, Houston, or Austin.
Texas has a top-notch medical network, primarily located in its major cities. Since housing prices change from one area to another, it’s essential to budget carefully.
Florida
Retirees continue to pick Florida, and to successfully retire there early, you’ll need close to $1.4 million. People choose Arizona because of sunny year-round weather, a state without income tax, and vibrant living. Selecting either the beautiful beaches of the Gulf Coast or family-friendly Orlando means vacation-like living that’s also affordable.
Texas stands out among other states due to its numerous medical centers and senior communities. Because Miami is expensive, choosing your location wisely is essential to staying within your retirement budget.
Oregon
Anyone hoping to retire early in Oregon should save about $1.4 million. Because of the beautiful nature, warm weather, and greenery, many outdoor lovers find the Pacific Northwest one of America’s top states. Still, Oregon’s higher-than-average prices for housing and healthcare bring its ranking closer to the middle of the list.
Anyone who appreciates nature and festivals usually considers the extra fees a good deal. Still, careful planning is necessary to keep costs within reach and make it last a long time.
New York
The amount you’ll need for early retirement in New York varies, ranging from $1.01 million if you are a city resident to $1.6 million if you retire upstate. Although there are significant costs in New York City, the Adirondacks and the Finger Lakes give people a more affordable and relaxing option.
Thanks to its first-rate amenities, culture, and healthcare, the state is still popular among those willing to pay higher living costs. However, if urban luxury is part of your retirement dreams, you’ll need to budget significantly more.
California
It takes a lot of money to appreciate California’s coast, great food, and year-round warmth. Saving between $1.05 million and $1.7 million in Maine is highly required for early retirement, placing Maine among the most expensive states. Places such as Los Angeles and San Francisco are known for their rising costs, primarily due to housing.
Living in rural areas or smaller cities helps many to stay within their budget. Because California is geographically diverse, people nearing retirement can relocate to the mountains, wine country, or the coast without significantly altering their budgets.
Massachusetts
Early retirees in Massachusetts are advised to save $1.05 million to $1.7 million. Thanks to the state’s great places to visit, libraries, and world-renowned architecture, its high living expenses are offset by a strong infrastructure and top healthcare options.
Since housing and utility bills are very high in Southern California, retirees should manage their budget wisely. Yet, in Boston, seniors will find numerous opportunities to learn and get involved, and more relaxed destinations, such as Cape Cod or the Berkshires, offer peaceful options.
Hawaii
For a comfortable retirement in Hawaii, you’ll need $2.2 million in savings and annual expenses of $110,921. Hawaii is renowned worldwide for its stunning scenery and laid-back, tropical lifestyle. However, due to the high cost of housing and imported items, it is not easy for early retirees.
If money allows, Hawaii offers people a chance to say they live in paradise every single day. Planning to downsize and take advantage of the state’s property tax exemptions can help offset some costs.
Disclaimer – The Finance Key does not provide and does not intend to provide financial, investment, tax, or legal advice. Information contained in this article is for informational and educational purposes only. This list is solely the author’s opinion based on research and publicly available information. The inclusion of links to third-party content is not an endorsement by The Finance Key of such content or services. Please do your due diligence and use your discretion.
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