A new survey suggests some states are better suited for adults 65 and older to save and stay financially healthy through retirement.
According to a recent MagnifyMoney survey, the rate of elder poverty in a given state varies depending on a number of factors, including the prevalence of affordable housing and the overall cost of living. The survey analyzed data from the U.S. Census Bureau’s 2019 one-year “American Community Survey.”
Overall, an average of 8.9% of older adults across the 50 states and Washington, D.C., live below the poverty line. Higher than average rates of poverty were found in 19 states and the nation’s capital. New Mexico leads the country with 13.5% of older adults living below the poverty threshold, meaning they might not be able to afford necessities. Washington, D.C., follows in a close second with a rate of 13.3%.
The findings echo those in a report put together last year by the Government Accountability Office (GAO) for the U.S. Senate’s Special Committee on Aging, “Older Women Report Facing a Financially Uncertain Future.” That report outlined numerous obstacles that women, in particular, face when trying to achieve a financially stable retirement.
The GAO based its findings on 14 focus groups it held in rural and urban areas, primarily among women age 70 and older, as well as the 2019 Current Population Survey; the Health and Retirement Study, which is based on data from 2002 to 2014; and the 2016 Survey of Consumer Finances. In its analysis, the GAO says the national poverty rate for women ages 65 and older is 11.1%, compared with 8.1% for men in the same age group.
Meanwhile, the MagnifyMoney survey finds older adults living in states with lower poverty rates appear to be better positioned for retirement. Vermont enjoys the smallest share of adults living in poverty, with a rate of 6.1%, while Utah and New Hampshire tied for second, with an elder poverty rate of 6.2%.
Along with its low poverty rate, Utah also features the highest rate of homeownership among older adults, at 86.4%. This positions Utah as the state best suited for retirement, according to the survey.
Utah does well across each metric used to rank the states’ retirement accessibility, including ranking fifth highest in its share of older adults with access to guaranteed retirement income. In addition, Utah ranks 13th lowest in terms of the percentage of its older adults who are burdened by housing costs, with only 24.5% of homeowners age 65 and older spending 30% or more of their income on housing.
On the other end of the spectrum is California, a state known for high costs of living and housing prices. California, according to these metrics, ranks as the state where older Americans are in the most challenging position to retire. The state has the second highest share of housing-cost-burdened adults 65 and older, at 39.3%, and the third-lowest percentage of older adults who own their homes outright, at 52.4%. Just over half—54.4%—of California’s adults 65 and older report having retirement income.
The survey looks at five metrics across all 50 states and Washington, D.C., and considers rates for poverty, homeownership status, mortgage status, housing cost burdens, and retirement income to create an index score, ultimately ranking the states in terms of the ability for people age 65 and older to retire with stability.
The full survey results are available here.