What would these kids do with a million dollars?
If only adults were so generous with money.
Michael V. Pettigano, Paul Wood Jr and Sean Oates, NorthJersey.com
Think you have enough money for retirement? Here’s some data for New Jerseyans to ponder.
A number of retirement surveys have asked Americans what they perceive as their “magic number” — the savings needed, after factoring in Social Security benefits, to live comfortably after retiring.
Brokerage firm Charles Schwab recently estimated the number to be $1.8 million, while other estimates put American’s comfort zone around $1.2 million. Split the difference and the magic number comes out as $1.5 million.
An Aug. 1 analysis from the personal finance site GOBankingRates used the $1.5 million figure as the basis for a retirement-planning exercise. While that amount, which included anticipated Social Security, will last the average West Virginian 50-plus years, for New Jersey retirees it’s projected to cover only 33 years.
The analysis figures the annual cost of living for New Jerseyans, after deducting Social Security payments, at $45,829 annually.
Realistically, most Americans exit work with nowhere near $1.5 million in savings. The typical senior with a retirement account has about $200,000 saved, according to federal data for households in the 65-74 age range from the 2022 Survey of Consumer Finances. Only about half of those households reported having retirement accounts.
The average New Jerseyan has managed to squirrel away around $600,000, reported the financial services firm Empower. Ballparking those figures, using GOBankingRates’ analysis, the money would run out after 13 years.
“Many Americans are coming to terms with the fact that $1 million doesn’t guarantee a comfortable retirement in parts of the U.S.,” said CJ Williamson, a GOBankingRates researcher.
Though not everyone has substantial nest egg, many in New Jersey receive public pensions. There were 364,170 annuitants, or retirees receiving pension payments, in the state’s public pension system as of fiscal year 2024, the U.S. Census Bureau said. For many, those pension funds are all the retirement savings they have.
Whatever the state of your personal finances, AARP offers advice to plan for a pending retirement. The most important point is to be real about your expenses, plan and take action.
There are ways to stretch retirement savings, experts say. One of the biggest opportunities for reducing the cost of living usually involves downsizing and moving, often out of state.
The state deemed most affordable by various economic studies is West Virginia. It has the lowest annual retirement costs, factoring in housing, health care and other expenses. Next on the list is Tennessee. The highest-rated cities for retirement are Fort Wayne, Indiana, and Huntsville, Alabama, a U.S. News & World Report article from last November shows.
How about New Jersey?
Want to stay in the Garden State and still cut costs? Here’s what others have found.
GOBanking cited Mays Landing in Atlantic County as the most affordable place to retire, with an average cost of living of $1,800 per month.
Ocean County’s Toms River has been recognized for more affordable housing options. It also features a large, active senior community with numerous clubs and social opportunities.
Last year, Trenton in Mercer County was ranked as the best place to retire in New Jersey, according to U.S. News & World Report. The capital city also placed 143rd on the list of best retirement destinations nationwide.
Trenton’s affordability and amenities contributed to its high ranking, the 2024 analysis said. The city’s median home price was $126,712, and the median monthly rent stood at $1,263. With a population of 106,290, Trenton also offers a small-city feel and access to cultural and historical landmarks.
Trenton’s affordability and central location in the state have made it an appealing option for retirees seeking a balance of convenience and reasonable cost of living, U.S. News said.
Staff writers Amanda Wallace, Manahil Ahmad and Lucas Frau contributed to this article, which also includes material from USA Today.
