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What’s the cost of retirement?
Saving up for retirement is a constant concern for many Americans. According to the National Institute on Retirement Security (NIRS), more than 75% of Americans have retirement savings that fall short of conservative savings targets, and 21% aren’t saving at all. COVID-19 has taken a toll on everyone’s budget, which has caused a considerable reduction in retirement account contributions and even forced withdrawals.
Reaching the age of 55 under these conditions without the certainty that your savings will allow you a comfortable retirement is worrisome to say the least. Calculating the possible cost of your retirement will depend on several factors: living expectancy (for Americans, it’s about 78.79 years), average retirement spending (which is around $50,000 a year and depends on your state of residence), and an additional amount for unforeseen expenses and financial security.
Needless to say, every retirement looks different depending on your circumstances. But to estimate the cost of your retirement here’s what you need to bear in mind:
Estimate your monthly expenses
It is useful to set them into three categories: fixed (such as taxes, rent, car payment), variable (like utility bills) and one-time (vacations or unexpected emergencies). You can set estimated amounts for these expenses based on previous bank statements, bills, receipts and others.
Estimate retirement income
It is assumed that you’ll need an annual income equivalent to 55% to 80% of your pre-retirement income to live comfortably. Project your monthly withdrawals and any savings to figure out your monthly income.
Compare expenses with income
This way you can objectively see if you need to make adjustments to your expenses or increase income way ahead of time.
To make expenses reconcile with your future income, one of the possible solutions could be relocating. Among the most popular destinations to spend your retirement in 2021 is North Carolina.
North Carolina has an estimated total retirement spending of $1,000,935, which puts the state at the 17th position with the least spending in the US. The average cost of living is 8.3% less than average as a result of the state’s policies and economy.
The 65+ population represents 16.7% of this state population, where the median monthly homeownership cost for people 65 and above is $402. Goods and services are about 8% less expensive in the state than they are nationwide.
These financial benefits, along with a mild climate, a beautiful landscape and a rich cultural environment where you can find both calm and quiet and new entertaining experiences make North Carolina a dream destination to enjoy your retirement.
Take a look at our Active Adult Communities in North Carolina to see where comfort meets the right price in the retirement place of your dreams. Check our catalog here.