Lifestyle

What Does it Cost for Early Retirement in Texas? Here’s Your Target

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Although the dream of early retirement often feels like exactly that – a dream – there’s a light at the end of the tunnel. And, unlike that other light, it’s the kind you want to go toward. Recently, details have been released on what it costs to retire early in each U.S. state, and thankfully, Texas ranks well in terms of savings requirements.

Identifying how much money people will need to save in each state if they want to retire at 35, 45, and 55 years of age, Howmuch.net has given everyone a bullseye to shoot for. Thankfully, at each age level, the corresponding chart to the website’s individual savings number is less than $1.6 million for Texas. Now, you might be saying, “Oh, is that all?!” But really, to some degree, your retirement and the level of comfort and happiness you experience from it, is contingent upon how much you save to ensure that can happen. If you’re retiring early, the likelihood that your savings need to support you for a longer period of time is greater (logically). So, you’ll be required to support your wants and needs from those savings. This means your living expenses, your vehicles, the trips you take, and the fun things you get to do will all need to be paid for out of what you’re able to save.

What Does it Cost for Early Retirement in Texas? Here’s Your Target

Photo: Pixabay

According to the report details, if your goal is retirement in Texas at the age of 35, you’ll need to have saved $1.58 million. If 45 is your target age, then your corresponding savings to live in the Lone Star State is $1.69 million. If you’re like me and looking at tipping something back in a hammock in your back yard at the ripe old age of 55, you’ll need to save $1.48 million. (Again, if you’re like me, you may have to push that year back a smidge… say to 95). But seriously, it’s doable.

What Does it Cost for Early Retirement in Texas? Here’s Your Target

Photo: Pixabay

Mississippi ranked as the best state (in terms of cost of living) for early retirement, while Hawaii, New York, and California ranked poorly for folks being able to pack it in early. GoBankingRates.com sourced the details for the report and shared it on their site on February 4. That means the statistics are current. That’s the bad news (for those of you who are, again, like me and lead a rich fantasy life which includes a confident swipe of your debit card). The good news is, with some creativity and a bit of elbow grease at a younger age, you can be relaxed, stress-free, and sans commute at a younger age than your parents ever dreamed of. For the purposes of this report, the ages of 35, 45, and 55 were identified to have average annual living expenses of $69,034, $73,905 and $64,972 respectively. This was then adjusted according to each state using data from the 2017 Consumer Expenditure Survey from the Bureau of Labor Statistics, in conjunction with assistance from the Missouri Economic Research and Information Center. Those figures were then divided by four percent, which was noted as the rate at which savers generally draw down on their accounts yearly. This resulted in the nest egg figures you read above.

For full details on each state, you can find the report at the link available here. The data makes some fairly blunt assumptions for such target rates, but the goal is early retirement – it doesn’t specify that you’re living in the lap of luxury. It sets a target for being financially secure, regardless of circumstances. And a target is worth aiming for!