Mar 5, 2025
For some Americans, the prospect of retirement is becoming much more stressful.
Nine out of 10 retirees are worried that inflation will erode the value of their assets, which ranks as one of their top concerns in the Schroders 2024 US Retirement Survey. Although inflation has fallen a fair bit, it’s still above the Fed’s target inflation rate of 2%, as measured by the price index for personal consumption expenditures.
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At the same time, retirees face great economic uncertainty as the effects of President Trump’s new economic policies have yet to be realized.
“It’s not surprising that investors across the country are feeling the pressure after living through the last few years of economic turmoil,” said Eric Stevenson, president of Nationwide Retirement Solutions, about the results from a new Nationwide Retirement Institute survey.
“Between inflation and a lack of savings, many of those closest to retirement are likely feeling like they don’t have enough to make a traditional retirement work.”
Assessing their future against the background of this economic environment, investors are considering lifestyle changes to help ensure a viable retirement — which includes moving to a cheaper location.
Relocation in retirement
The Nationwide Retirement Institute survey found that 32% of investors “do not believe their current location makes sense financially as a place to retire.” Furthermore, nearly one in six say they’ll be “forced to relocate to a more affordable region due to cost of living in their area.”
But this sense of unease depends greatly on where these investors currently live. Those in regions with higher taxes and living expenses are more likely to be considering a move, even though they have higher average retirement savings to draw upon than investors in more affordable regions.
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Northeast investors more likely to move in retirement
According to the survey, 41% of investors in the Northeastern United States don’t believe their current location makes financial sense as a place to retire — and one in five (20%) expect to move somewhere more affordable when they call it a career.
This shouldn’t necessarily come as a huge surprise, considering that Washington, Massachusetts, New York, Maryland and New Hampshire are among the top 10 most expensive states to live in — and an additional five states from the Northeast round out the top 15.
This region also has some of the highest tax burdens in the country, with New York and Connecticut leading the way. Vermont and New Jersey aren’t far behind, landing in fourth and sixth place, respectively.
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Despite these challenges — and some saying they will relocate — investors in the Northeast are the most confident of all regions, with 46% saying they’re optimistic about their financial outlook over the next year. Still, a quarter of survey respondents expect to have to work in retirement and about one-fifth say they would have to withdraw from retirement savings early if they retired in the coming year.
Investors in the Midwest are more likely to stay put
In contrast, Midwesterners have the lowest confidence of all regions, but are also the least likely to be forced to move. While only 41% are optimistic about their financial situation over the coming year, just 11% expect the cost of living to force them to relocate in retirement.
Perhaps that’s because Nebraska, Iowa, Missouri and Kansas are among the states with the lowest cost of living. And, although Illinois and Minnesota have relatively high tax burdens, the region as a whole has lower taxes, led by states such as the Dakotas and Michigan (which have among the lowest tax burdens in the U.S.).
Furthermore, only 32% of Midwestern investors plan to work past the age of 65, despite having the lowest median retirement savings of all the regions at just $200,000.
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Other factors that investors are considering
It’s not just the high cost of living and heavy tax burdens that are forcing people to move or work in retirement.
The U.S. is currently facing a retirement savings crisis. Americans surveyed by Northwest Mutual believe they’ll need $1.46 million to retire comfortably, but on average have only saved $88,400. Gen X and baby boomers, who are at or near retirement age, have more saved — $108,600 and $120,300, respectively — but still fall well short of what they believe they’ll need.
The sample of investors surveyed by the Nationwide Retirement Institute is faring somewhat better, but still falls well short of the number they’ll likely need. Western investors have average retirement savings of $300,000, while Northeastern and Southern investors have $250,000 and Midwestern investors have $200,000.
For anyone falling short of meeting their retirement goals or rethinking their retirement lifestyle, it may be helpful to consult a financial advisor.
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Vawn Himmelsbach is a veteran journalist who has been covering tech, business, finance and travel for the past three decades. Her work has been featured in publications such as The Globe and Mail, Toronto Star, National Post, Metro News, Canadian Geographic, Zoomer, CAA Magazine, Travelweek, Explore Magazine, Flare and Consumer Reports, to name a few.
