Have you thought about your retirement lately? It’s never too early to consult an expert in wealth management in the Metro DC area about your future. Here’s information that can be useful to you in planning your retirement.
Financial Security: Not All States Are the Same
Many of us hope to be financially secure by the time we’re 65. Unfortunately, even in old age, there are basic necessities like housing and health care to consider. These expenses can put a tremendous strain on your financial resources. That’s why it’s always a good idea to start saving for your retirement as early you can.
When making retirement plans, it’s good to know that not all states are the same. In fact, according to the National Institute on Retirement Security (NIRS), some states make it more difficult for retirees to support themselves financially.
Last year, the NIRS released a study on the economic pressures faced by adults in their later years. It looked at retiree costs (e.g., Medicare out-of-pocket spending, Medicaid generosity, and housing costs), retirement income, and labor market conditions for older adults. The 50 states along with the District of Columbia were ranked in terms of these variables, and the resulting scores were used to generate the State Financial Security Scorecard.
The study found that housing-cost burdens and marginal income tax rates on pensions were higher in some states than in others. New Jersey, New York, and Connecticut had the highest housing costs among all states. Marginal taxes on pension income were highest in Minnesota, Oregon, and Hawaii.
DC: Looking Good for Retirees
The future of retirees is looking good here in Washington, DC. This is worth knowing if you’re planning to move once you retire.
DC had one of the best overall scores in the NIRS’s State Financial Security Scorecard. For 2000, 2007, and 2012, DC had one of the highest scores in retirement income. This means the average defined contribution and retirement account balances were relatively high. Marginal tax rates were also lower compared with other states.
DC fared rather well in terms of retiree costs in those years as well. Medicare out-of-pocket costs among DC retirees were not too high, and housing costs were not as burdensome as in other parts of the country.
Relative to other parts of the country, DC is not that bad for retirees. Major potential economic pressures for the future retiree population are lower here than in other states.
This does not mean retirees have it easy in DC. It’s still important to have a solid retirement plan backing you up.
AOG is an asset and wealth management firm serving the Metro DC area. Our services include retirement planning and investment management to help individuals chart their retirement course. Contact us at (866) 993-0203 to learn more.