Retirement income, or the amount of money a person receives after they permanently leave the workforce, is largely determined by how that individual prepared and strategized their finances throughout the years prior. However, like most things, there are a lot of extraneous factors that impact how much money someone brings in in their later years.
Similar to how median salaries often follow geographic trends, there are some clear patterns in retirement income across the United States. According to a recent analysis by Coventry Direct that explored which states have the highest and lowest average retirement income, the variation among states is stark.
For example, when looking at the annual retirement income by household, the average ranges from a low of $20,500 in Indiana to more than $43,600 in the nation’s capital, DC. This means that the average household in DC brings in more than double that of Indiana’s.
While that may sound like a big difference, it probably doesn’t come as much of a surprise. DC’s cost of living is estimated to fall around 44% higher than the capital of Indiana, Indianapolis. That cost of living difference mirrors the difference in retirement income between the two cities nearly perfectly.
Though this cost of living trend does not hold true in all cases. You’d probably be able to guess many of the other states that join DC on the list of richest retirees. Surrounding states like Maryland and Virginia come in at #3 and #5, respectively, while another state with an above-average cost of living, California, claims the #4 spot with an average retirement income of nearly $34,700 each year.
Surprisingly, Alaska holds the title of the second richest retirees by this metric, just behind DC. Though the cost of living in Alaska is notoriously one of the highest in the country, the northeastern state rarely ranks in the top 10 for wealthiest states, let alone the #2 spot.
To see where your state falls in retirement income and even further analysis, check out Coventry’s full report here.