6 Reasons You Need at Least $630K (Plus Social Security) To Retire in Illinois

Are you living in Illinois or planning to move there? Have you thought about retiring in Illinois?

Illinois is the state with the fifth highest GDP in the U.S., and residents have an above-average median household income of $78,020, compared to the national median of $74,580. Despite this, the cost of living for retirees in Illinois is actually lower than in many other states. Illinois is the 15th cheapest state in the U.S. for retirees, with a cost of living index 8.2% lower than the national average.

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So, how much do you need to have saved to retire in Illinois? Based on GOBankingRates’ analysis of data from the Bureau of Labor Statistics, the Missouri Economic Research and Information Center and the Social Security Administration, you will need to have at least $630,203 saved up for a 20-year retirement, presuming you are also receiving average Social Security checks .

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Retirees Spend an Average of $53,077 per Year in Illinois

The average annual expenses for an adult over 65 years old in Illinois are about $53,077, and the median Social Security benefit in the U.S. is $21,567. This means that once you subtract Social Security, the average Illinois retiree will need to have an extra $31,510 on hand each year to afford life in the state.

For a 20-year retirement, this comes out to $630,203. If you’re planning a 25-year retirement, you will need $787,754. For a 30-year retirement, you will need $946,251.

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Groceries Cost Slightly Less in Illinois

Illinois offers grocery expenses that are 1.4% under the national average. Annual grocery costs in Illinois average out to around $4,730, compared to $4,797 nationally. While the difference isn’t massive, recurring costs add up over time when you’re living on savings, so managing costs can be an important part of retirement budgeting.

To make the most of your grocery budget, you can look for stores that offer senior discounts and buy in bulk when possible. If you live in certain areas, you may also be able to take advantage of the city’s farmers’ market coupon program for seniors. The program gives out checks that seniors can use to buy fruits, vegetables and herbs at certain farmers’ markets.

Housing Is Significantly Cheaper

Housing costs in Illinois are considerably lower than the national average, with annual costs around $9,213, compared to the national average of $11,692. That means Illinois housing prices are 21.2% lower than average.

However, whether you actually save money on housing will depend on where you live in the state. Housing prices in Chicago specifically are actually 77% more expensive than the state average and 38% more expensive than the national average. This means that if you want to retire in Illinois, it may be a good idea to move to another town with lower prices.

Utilities Are Also Cheaper

Utility costs in Illinois stand at 88.3% of the national average, with annual expenses averaging $3,740, compared to $4,236 nationally.

If you’re looking to lower utility costs further, you can check whether your provider has time-of-use rates. These are cheaper electricity rates during off-peak hours when demand for electricity is lower. You can save money by only using power-hungry appliances, like washing machines, dryers and dishwashers, during off-peak hours.

You may also be able to save money in the long run by upgrading to more efficient home heating and cooling systems, but make sure you do the math carefully to see if the upgrade will save you more than it will cost.

Transportation Costs Are Slightly Higher Than the National Average

Transportation in Illinois is just 1.1% more than the national average of $4,943, coming out to an annual cost of $4,997. While this category doesn’t offer much in terms of savings compared to other states, you may still be able to bring costs down by using local public transportation.

Illinois has a program called the Ride Free Transit Benefit, which enables seniors to ride for free on participating scheduled buses and trains. There is an annual income limit, and you need to apply through the Illinois Department on Aging website. The state’s benefits program also gives seniors a discount on license plate fees.

Healthcare Is Slightly Cheaper

Healthcare costs in Illinois are 4.1% below the national average. The average adult over 65 in Illinois spends $7,231 on healthcare each year, compared to $7,540 nationally.

A good way to save money on healthcare is to stay as healthy as possible. Taking advantage of free and low-cost preventive services can prevent more serious health issues that lead to higher medical bills.

Methodology: In order to find out exactly how much you need to retire in your state, GOBankingRates found the annual cost of expenditures for a retired person in each state by multiplying the 65 year and older expenditures from the Bureau of Labor Statistics’ 2022 Consumer Expenditure Survey by the cost of living index for each state from the Missouri Economic Research and Information Center’s Q3 2023 cost of living series. To find how much money a retired person would need to save, we divided each state’s annual expenditures, minus the annual Social Security income as sourced from the Social Security Administration’s Monthly Statistical Snapshot, March 2022, by 0.0333%, 0.04% and 0.05% assuming 20, 25 and 30 years of retirement, respectively. All data was collected and is up to date as of Jan. 8, 2024.

This article originally appeared on GOBankingRates.com : 6 Reasons You Need at Least $630K (Plus Social Security) To Retire in Illinois