Reuters

(Reuters)

The Important Goal That Seniors in 47 States Aren't Meeting

By Retirement Bankrate.com

Retirement

Continue Reading Below

If you want to survive and even thrive in retirement, most financial advisers believe you need at least 70% of the income that you had before you retired. But seniors in most states are falling short, a Bankrate study shows. We found that retirement incomes are exceeding the 70% target in just 3 states: Hawaii, Alaska and South Carolina.

The results illustrate America's widespread lack of retirement preparedness at a time when many people have a hard time planning even week to week, let alone for an event that is decades away.

"Americans are facing a shortfall of retirement income (because) their saved assets are not enough to fund their desired or even current lifestyle," says James Carlson, chief investment officer at Questis, a financial services firm based in Charleston, South Carolina.

RATE SEARCH: Compare money market account rates and start saving today.

How We Did It

Continue Reading Below

Bankrate's analysis uses data from the U.S. Census Bureau's most recent American Community Survey. For each state and Washington, D.C., we divided the median annual household income for those who are 65 and older by the median annual household income for those in their later working years, between ages 45 and 64.

The resulting ratios of pre-retirement income that seniors are replacing range from a high of 72.59% in Hawaii to a low of 48.22% in Massachusetts. The national average is 60.27%.

Retirement incomes falling short
State: Nationwide Median household income, ages 45-64: $65,018 Median household income, 65 and older: $39,186 Income replaced in retirement: 60.27%
State Median household income, ages 45-64 Median household income, 65 and older Income replaced in retirement
State: Hawaii Median household income, ages 45-64: $80,106 Median household income, 65 and older: $58,150 Income replaced in retirement: 72.59%
State: Alaska Median household income, ages 45-64: $81,990 Median household income, 65 and older: $58,311 Income replaced in retirement: 71.12%
State: South Carolina Median household income, ages 45-64: $52,289 Median household income, 65 and older: $36,694 Income replaced in retirement: 70.18%
State: Arkansas Median household income, ages 45-64: $47,426 Median household income, 65 and older: $32,897 Income replaced in retirement: 69.36%
State: New Mexico Median household income, ages 45-64: $53,062 Median household income, 65 and older: $36,740 Income replaced in retirement: 69.24%
State: Florida Median household income, ages 45-64: $55,546 Median household income, 65 and older: $38,425 Income replaced in retirement: 69.18%
State: Nevada Median household income, ages 45-64: $59,351 Median household income, 65 and older: $40,482 Income replaced in retirement: 68.21%
State: Arizona Median household income, ages 45-64: $59,103 Median household income, 65 and older: $40,195 Income replaced in retirement: 68.01%
State: District of Columbia Median household income, ages 45-64: $71,558 Median household income, 65 and older: $47,906 Income replaced in retirement: 66.95%
State: Mississippi Median household income, ages 45-64: $45,347 Median household income, 65 and older: $30,254 Income replaced in retirement: 66.72%
State: West Virginia Median household income, ages 45-64: $48,627 Median household income, 65 and older: $32,219 Income replaced in retirement: 66.26%
State: Tennessee Median household income, ages 45-64: $51,784 Median household income, 65 and older: $34,224 Income replaced in retirement: 66.09%
State: Oklahoma Median household income, ages 45-64: $55,795 Median household income, 65 and older: $36,820 Income replaced in retirement: 65.99%
State: North Carolina Median household income, ages 45-64: $55,226 Median household income, 65 and older: $36,252 Income replaced in retirement: 65.64%
State: Alabama Median household income, ages 45-64: $51,117 Median household income, 65 and older: $33,375 Income replaced in retirement: 65.29%
State: Montana Median household income, ages 45-64: $54,753 Median household income, 65 and older: $35,710 Income replaced in retirement: 65.22%
State: Kentucky Median household income, ages 45-64: $50,838 Median household income, 65 and older: $33,041 Income replaced in retirement: 64.99%
State: Oregon Median household income, ages 45-64: $61,744 Median household income, 65 and older: $39,337 Income replaced in retirement: 63.71%
State: Delaware Median household income, ages 45-64: $71,504 Median household income, 65 and older: $45,510 Income replaced in retirement: 63.65%
State: Michigan Median household income, ages 45-64: $60,315 Median household income, 65 and older: $38,373 Income replaced in retirement: 63.62%
State: Louisiana Median household income, ages 45-64: $51,696 Median household income, 65 and older: $32,870 Income replaced in retirement: 63.58%
State: Indiana Median household income, ages 45-64: $59,031 Median household income, 65 and older: $37,521 Income replaced in retirement: 63.56%
State: Missouri Median household income, ages 45-64: $57,994 Median household income, 65 and older: $36,059 Income replaced in retirement: 62.18%
State: Georgia Median household income, ages 45-64: $59,349 Median household income, 65 and older: $36,859 Income replaced in retirement: 62.11%
State: Texas Median household income, ages 45-64: $63,465 Median household income, 65 and older: $39,202 Income replaced in retirement: 61.77%
State: California Median household income, ages 45-64: $74,074 Median household income, 65 and older: $45,732 Income replaced in retirement: 61.74%
State: Maine Median household income, ages 45-64: $57,768 Median household income, 65 and older: $35,498 Income replaced in retirement: 61.45%
State: Utah Median household income, ages 45-64: $74,625 Median household income, 65 and older: $45,738 Income replaced in retirement: 61.29%
State: Ohio Median household income, ages 45-64: $60,090 Median household income, 65 and older: $36,574 Income replaced in retirement: 60.87%
State: Colorado Median household income, ages 45-64: $74,234 Median household income, 65 and older: $45,093 Income replaced in retirement: 60.74%
State: Kansas Median household income, ages 45-64: $64,951 Median household income, 65 and older: $39,009 Income replaced in retirement: 60.06%
State: Idaho Median household income, ages 45-64: $60,034 Median household income, 65 and older: $36,048 Income replaced in retirement: 60.05%
State: Washington Median household income, ages 45-64: $73,740 Median household income, 65 and older: $44,104 Income replaced in retirement: 59.81%
State: Wyoming Median household income, ages 45-64: $69,107 Median household income, 65 and older: $40,773 Income replaced in retirement: 59.00%
State: Maryland Median household income, ages 45-64: $89,892 Median household income, 65 and older: $52,458 Income replaced in retirement: 58.36%
State: Virginia Median household income, ages 45-64: $79,060 Median household income, 65 and older: $45,966 Income replaced in retirement: 58.14%
State: Vermont Median household income, ages 45-64: $63,243 Median household income, 65 and older: $36,346 Income replaced in retirement: 57.47%
State: South Dakota Median household income, ages 45-64: $61,945 Median household income, 65 and older: $35,240 Income replaced in retirement: 56.89%
State: Nebraska Median household income, ages 45-64: $65,649 Median household income, 65 and older: $37,174 Income replaced in retirement: 56.63%
State: Illinois Median household income, ages 45-64: $70,473 Median household income, 65 and older: $39,898 Income replaced in retirement: 56.61%
State: Iowa Median household income, ages 45-64: $66,128 Median household income, 65 and older: $37,099 Income replaced in retirement: 56.10%
State: New York Median household income, ages 45-64: $70,076 Median household income, 65 and older: $39,278 Income replaced in retirement: 56.05%
State: Rhode Island Median household income, ages 45-64: $68,843 Median household income, 65 and older: $38,391 Income replaced in retirement: 55.77%
State: Wisconsin Median household income, ages 45-64: $65,665 Median household income, 65 and older: $36,606 Income replaced in retirement: 55.75%
State: Pennsylvania Median household income, ages 45-64: $65,822 Median household income, 65 and older: $36,415 Income replaced in retirement: 55.32%
State: New Hampshire Median household income, ages 45-64: $79,256 Median household income, 65 and older: $43,069 Income replaced in retirement: 54.34%
State: Connecticut Median household income, ages 45-64: $86,666 Median household income, 65 and older: $46,216 Income replaced in retirement: 53.33%
State: Minnesota Median household income, ages 45-64: $75,500 Median household income, 65 and older: $40,041 Income replaced in retirement: 53.03%
State: New Jersey Median household income, ages 45-64: $88,866 Median household income, 65 and older: $46,170 Income replaced in retirement: 51.95%
State: North Dakota Median household income, ages 45-64: $75,931 Median household income, 65 and older: $37,196 Income replaced in retirement: 48.99%
State: Massachusetts Median household income, ages 45-64: $86,036 Median household income, 65 and older: $41,489 Income replaced in retirement: 48.22%

Source: U.S. Census Bureau 2014 American Community Survey (the most recent)

Every state has its own peculiar factors that contribute to greater or lesser retirement readiness, says Nancy Blunck, a certified financial planner professional in Anchorage, Alaska. The state ranked second with an income replacement ratio of 71.12%.

Seniors are doing better in Alaska, Blunck points out, partly because the public pension system pays an annual 10% bonus to retired state employees who stay in-state after they retire. (This won't hold true for people who entered the service after 2006.)

Alaska's 'Weird' Stimulus

"We personally know people who make more in retirement than when they were working," says Maggie Banks, a personal finance blogger in Anchorage at NorthernExpenditure.com.

There's Alaska's "weird economic stimulus that doesn't happen anywhere else," she says. The Permanent Fund which spreads around surplus revenues from the state's oil and gas reserves -- paid all residents $2,072 last year, its largest dividend ever. A retired couple would have received more than $4,000. "A lot of people count on that in retirement," says Banks.

The cost of living in Alaska is high, but the state's sparse population means jobs are plentiful. Costs are partly offset by subsistence fishing and hunting, and no small amount of DIY.

Banks and her family dip-net every year for more than 70 pounds of sockeye salmon. They clean and gut the fish themselves, and have some smoked professionally.

The Banks family does not hunt, but many of their friends do. "One moose will fill up your freezer," she says.

Say 'Aloha' To A Good Retirement

Hawaii's host of conflicting factors makes that state tough to understand. Jack Kerr, the founder of Blue Skies Financial Planning in Kailua Kona, notes that the cost of living (the highest in the U.S.) is a challenge, although seniors do receive tax breaks, and health care costs for the elderly seem to be below the average.

The labor climate in Hawaii might affect retirement finances, says Leo Goeas, a former NFL player and now a financial adviser with Raymond James and Associates in Honolulu.

A high percentage of Hawaiian residents are government workers, and many private companies are unionized, giving workers retirement pensions. About 1 in 5 workers in Hawaii is a union member, well above the national average of 11%, according to the U.S. Bureau of Labor Statistics. And, unlike many other states, Hawaii has retained a pension benefit for government workers.

Hawaii's Family Factors

The high cost of living makes multi-generational living extremely common in Hawaii, Goeas says, with 3 generations sometimes living in one house to cut costs.

The state culture is unique and tends to be less focused on spending money. People tend to value experiences and activities over consumption," says Peter Kay, a Honolulu resident who writes a blog called Living in Hawaii. Instead of shopping or dining out, they prefer hiking or visiting a beautiful national park. Dining out, expensive groceries and pricier cultural events may cede to the beach or free tai chi at the mall.

"You live in a much smaller home," Kay adds. "If you have a car, maybe you'll have a smaller, more efficient car that you hold on to for longer."

The retiree's journey emphasizes the things that matter: "The joy and satisfaction in your later life are more qualitative than quantitative," he says.

Low Costs And High-Income Transplants

As for South Carolina -- the third state with retirement income replacement above the 70% threshold -- the state had many manufacturing businesses in the 1960s and '70s that may still produce pension benefits today, says Carlson, of Questis.

Transplants might be another reason for the state's showing. "People with money are moving south," Carlson says. "They might have greater-than-average retirement income, people who have accumulated their income somewhere else and are now realizing it in South Carolina."

The state also is home to 8 military bases, which may mean a large number of relatively well-off military retirees.

Kathy Merlino, blogger at KathysRetirementBlog.com in Blue Ridge, South Carolina, is not surprised about the state's numbers. Lower expenses help to create income in retirement, and South Carolina has relatively inexpensive housing and low taxes, she says.

A Rich Retirement, Wherever You Are

Merlino and her husband pay just $2,000 a year in taxes on a home that is worth nearly $500,000. She's also a dedicated gardener, and says people in South Carolina can grow vegetables 365 days a year and fruit for 8 months out of the year to help save on food.

"A cost and health benefit of retiring in South Carolina: You can live very well for very little money and have a very rich retirement," Merlino says.

No matter what state you're in, Carlson recommends setting goals for the income you desire in retirement and making a plan.

Putting money aside automatically through a workplace or individual retirement account is one of the simplest ways to make sure you're continuously adding to your nest egg. And don't forget to increase the amount you save each year.

Even 1% or 2% more every year will boost your chances of building enough to replace your paycheck, Carlson says.

Copyright 2016, Bankrate Inc.

What do you think?

Click the button below to comment on this article.