Arizona is one of the most popular states for retirees to settle down in after a career of working. However, it might not be the best state for anyone in retirement who is living solely off of a combination of 401(k) payments and Social Security benefits.
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GOBankingRates conducted a study for how long the average retirement income will last in every state. The data from Arizona showed the following numbers:
- No. of Years 401(k) Will Last With Social Security: 13.79
- Days: 5037
- Years, Months and Days: 13 years 9 months 14 days
- Annual Expenditure: $62,674.71
- Annual Expenditure After Taxes: $40,277.43
If you are living in Arizona as a retiree or plan to move there in your post-work years, this can give you a timeline for your budget if you are going to be living off of 401(k) payments with your Social Security benefits. To get a better idea of your annual cost of living, it’s important to examine the in-state costs of groceries, housing, utilities, transportation, and healthcare.
Here is how long your 401(k) plus Social Security benefits will last you in Arizona, per each major category of cost of living, based on the study from GOBankingRates.
Also see why Arizona retirees are fleeing.
Groceries
- Grocery Cost Of Living Index: 102
- Annual Expenditure On Groceries: $4,892.94
You might notice your grocery bill in Arizona is about $100 higher than the rest of the country. The average annual grocery cost for most of America is $4,797.
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Housing
- Housing Cost Of Living Index: 128.5
- Annual Expenditure On Housing: $15,024.22
Another expensive expense in Arizona is housing, which is several thousand dollars more than the national annual average of $11,692.
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Utilities
- Utilities Cost Of Living Index: 101.1
- Annual Expenditure On Housing: $4,282.60
There is some minor relief when it comes to utility payments in Arizona. Retirees pay nearly the same each year as the rest of the country, which averages out to $4,236 each year. That said, Arizona residents have been warned that in the coming years bills might go up due to extreme heat and potential drought across the state.
Transportation
- Transportation Cost Of Living Index: 104.9
- Annual Expenditure On Housing: $5,185.21
$4,943 is how much the national average cost is each year for retirees across the United States. If you are planning on spending your Golden Years in Arizona, be prepared to pay slightly more for being able to stay mobile.
Healthcare
- Healthcare Cost Of Living Index: 93.6
- Annual Expenditure On Healthcare: $7,057.44
Arizona retirees can find some relief in the fact that expenses for healthcare are several hundred dollars below the national annual average of $7,540. If 401(k) payments and Social Security are your only sources of income, this is good news as medical expenses tend to increase the older we get.
The overall average in the United States found that retirees could survive 15.7 years off a 401(k) payment plus Social Security benefits, adding up to 5,730.5 days or 15 years 8 months 9 days to be exact. This puts Arizona in the second half of all states, with a ranking of 36 across the nation.
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Methodology: In order to find how long the average 401(k) will last across the country with Social Security, GOBankingRates first found (1) the national average annual expenditures for people 65 and older, sourced from the Bureau of Labor Statistics’ 2022 Consumer Expenditure Survey (CEX) data and (2) annual Social Security income as sourced from the Social Security Administration’s April 2024 data. Then, GOBankingRates created (2) state-level annual expenditure estimates by multiplying the national figure by each state’s overall cost of living index score for 2023 from the Missouri Economic Research and Information Center (MERIC). Finally, GOBankingRates found (3) how many years the average 401(k) will last in each state by dividing $555,621 by each state’s average annual expenditures estimate minus yearly Social Security income. All 50 states and the District of Columbia were then ranked with No. 1 being the state where $555,621 and Social Security will last the longest and No. 51 being the state where it will run out most quickly. GOBankingRates provided supplemental information on the average annual cost of groceries, housing, utilities, transportation and healthcare for people 65 and older in each state by again using MERIC’s cost of living indices for each category to factor out national estimates from the CEX. All data was collected and updated as of May 22, 2024.
This article originally appeared on GOBankingRates.com: How Long Your 401(k) Plus Social Security Benefits Will Last You in Arizona
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