The article provides an evaluation of the top 25 economic retirement destinations in the U.S. for the year 2024, with a particular focus on the top 10 budget-friendly options. These destinations were assessed based on factors such as the cost of living, real estate prices, and healthcare provisions amongst others.
An important issue discussed in the article is the financial readiness of retirees, largely baby boomers, for retirement. According to a survey by T. Rowe Price Group, Inc. it was found that there is a significant discrepancy between projected retirement savings and actual net worth for most Americans aged between 65 to 74, leading to monetary stress for 64% of the surveyed population. This indicates a lack of financial preparedness for retirement, further emphasizing the need for better financial education for future retirees.
Adding to the financial stress for retirees is the increasing inflation and the forecasted exhaustion of Social Security Funds by 2034, which could potentially lead to a drop in retiree benefits to only 80% of their calculated benefits. Policymakers are warned to find long-term solutions to maintain the sustainability of retirement benefits.
Healthcare costs pose another challenge with the Medicare Part B standard premiums seeing a 6% increase in recent years and an upward shift in annual Part B deductibles from $226 to $240. Additionally, the Full Retirement Age has been on an upward trajectory since 1983 and is forecasted to reach 66 years and 8 months by mid-2024.
An option for financially strained retirees is to move to cost-effective states like Mississippi, Iowa, Wyoming, or Georgia. Housing, healthcare, and living costs in these states are relatively lower, allowing retirees to get more value out of their reduced benefits. Consulting with a financial advisor or retirement planner is advised to understand which option would work best on a personal level.
The state of Mississippi is highlighted as one of the most budget-friendly retirement states in 2024 due to affordable living expenses and a tax-friendly environment. However, Hayden Adams from the Charles Schwab Corporation Center for Financial Research advises considering not only financial factors but also the availability of substantial support systems such as friends and family, favourable weather conditions and top-notch healthcare services when choosing a retirement destination.
