Early retirement is a big attraction for most working Americans. Financial advisors are encouraging clients to explore this new concept called “FIRE” (Financial Independence/Retire Early).
The basic idea behind this plan is to simply live below what you could afford theoretically so that you are able to fully maximize your earnings for early retirement. People can retire at different ages. Some may exit the workforce at 55, others 45, or as early as 35 years old.
But how much money will you need to retire early?
We’ve crunched these numbers by state and we will give you a few highlights.
Amount of Money Needed to Retire At 35 by State
Retiring at 35 could be a dream but you will need to have a lot of money saved in order to do it. This depends on the state you live in.
Here are some of the figures from the most popular US states:
- New York City - You will need at least $2.3 million for your retirement.
- California - Californians will need at least $2.37 million to exit the workforce at 35.
- Florida - People in Florida will need $1.71 million.
- Texas - Texans, on the other hand, will need to save up to $1.5 million.
- Massachusetts - You will need $2.23 million.
In our analysis, we found that people in the state of Hawaii will need the highest amount of savings totaling to $3.26 million in order to retire at 35. Other states with a figure of above $2.2 million include Oregon, Arkansas, Maryland, Connecticut, and New Jersey.
What If You Want to Retire At 45?
Naturally, working for more years would essentially mean that you will need lower savings for your retirement. However, this doesn’t seem to be the case here:
- Hawaii - Hawaii still has the highest ranking. Residents in the state will need savings of at least $3.49 million to afford a retirement at 45 years old.
- California - Californians will need $2.53 million
- New York - As for people in New York, the minimum amount needed for early retirement is $2.48 million.
- Texas - Texans need $1.69 million saved.
- Florida - You will need $1.83 million to retire at 45 in Florida.
There were other states too that were able to record savings of above $2.2 million. They included Oregon, Arkansas, Massachusetts, Connecticut, New Jersey, and Maryland.
Retiring At the Age of 55
55 is the more traditional retirement age in the US. But even then, you still need a sizable amount of savings to survive it.
Here are a few highlights from the analysis:
- California - People in California will need $2.23 million retiring at this age
- Texas - Texans, on the other hand, will require $1.48 million
- Florida - In Florida, the minimum amount needed stands at $1.61 million.
- New York - $2.18 million dollars is the magic number in New York
- Hawaii - Hawaii still has the highest ranking at $3.07 million.
Connecticut, Maryland, and Massachusetts all require savings of more than $2.2 million. Oklahoma, Tennessee, Alabama, Indiana, Wyoming, New Mexico, Michigan, and Georgia are some of the states that require savings of less than $1.5 million.