BIRMINGHAM, Ala. – According to a new analysis of U.S. Census Bureau data, Alabamians are retiring younger than most Americans.
SmartAsset.com, a company that aims to provide understandable answers to complex financial questions, recently published their findings on labor and retirement statistics in order to answer the question, “So when is the right time to retire?”
According to the study, the answer to that question is highly dependent on where you live. SmartAsset’s analysis of U.S. Census Bureau data found that the national average retirement age is 63 years old. However, at the state level, it ranges from 62 to 65 years old.
Alabama, Georgia, South Carolina, Arkansas, West Virginia, Michigan, and Delaware were the only states listed on the lower end of the spectrum, with an average retirement age of 62.
Similar to the other states with an average retirement age of 62, the state of Alabama has relatively affordable housing. And according to SmartAsset, cost of living is key when it comes to retirement.
“In general, the retirement age is later in states with higher living expenses. Indeed, our analysis found a statistically significant, positive correlation (50%) between housing costs and the average retirement age,” SmartAsset’s analysis stated.
For example, states with higher living expenses, such as Massachusetts, Alaska, New Hampshire and Vermont, all have an average retirement age of 65. In addition, states like New Jersey and Connecticut have an older average age for retirement partially due to their lack of tax-friendliness to retirees.
SmartAsset found that another influence on average retirement age is unemployment, states lower with employment rates usually have an older average retirement age.
“Just as cost of living is positively correlated with retirement age, unemployment shows a significant negative correlation,” SmartAsset’s analysis stated. “Higher long-term unemployment means more workers in their 50s and 60s give up on the job search and retire early.”
To read the full analysis from SmartAsset, click here.