Retiring to Sunny Climes May Be Bad for Your Financial Health
The states that are top climate lists for many American retirees score lowest in terms of retirees’ financial security, ThinkAdvisor writes.
In a survey conducted by the National Institute on Retirement Security, as cited by ThinkAdvisor, California, Florida and South Carolina scored lowest overall when taking into account retirement savings, retiree costs and employment opportunities for people 55 and older.
According to the Web publication, California and Florida have particularly high retiree costs — which include Medicare out-of-pocket costs, offset by the state’s Medicaid spending per elder, and housing costs. And South Carolina has one of the poorest labor markets for retirees — based on the unemployment rate and the median hourly wage for people in the 55-and-older group. California also offers little as far as potential retiree income — which includes companies’ participation in private-retirement plans, tax rates on retirement income and the average defined-contribution account.
ThinkAdvisor quotes Hank Kim, executive director of the National Conference on Public Employee Retirement Systems, as saying that, despite its low ranking, California was one of the first states to enact legislation to improve retiree security. He claims the idea of protecting seniors was merely in germination in the 1990s and finally got some traction in the mid-2000s. It wasn’t until 2012, however, that Massachusetts and California put through legislation.
Diane Oakley, executive director at the NIRS, says there’s “room for improvement” in all states, not just the lowest-scoring ones, according to ThinkAdvisor. Even in the states that score well, there is great disparity between the size of retirement savings and the average income in the state, she adds. In Wisconsin, for example, people have $45,600 saved on average, while the average annual wage is $66,000, ThinkAdvisor writes.