East coasters are best positioned to retire with flush nest eggs than Americans in other parts of the country, according to new data.
Connecticut residents have the highest retirement savings account balances out of the entire country with an average of $523,568 saved per household, according to data from Personal Capital, an online financial advisor and personal wealth management company. The analysis is based on balances of IRAs, Roth IRAs, 401(k)s, and 403(b)s of 2.8 million anonymous users across the country.
Other New England and Mid-Atlantic states follow Connecticut, such as New Hampshire (No. 2) with an average of $494,562 saved, New Jersey (No. 3) with an average of $489,664, and Virginia (No. 5) with $468,579 saved. The geographic outlier is Alaska (No. 4) with an average balance of $489,070.
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“There are more contributions in those states, that's why we're seeing higher average balances,” Amin Dabit, vice president of advisory service at Personal Capital, said. “People in those states are contributing more to their retirement assets than others, especially on the higher average [balances].”
States with lower average retirement balances dot the country’s regions. Utahans were found to have the lowest average retirement balances at $300,392, followed by North Dakotans at $310,766 (No. 2); Washington D.C. residents at $325,671 (No. 3); Oklahomans at $340,389 (No.4), and Mississippians (No. 5) at $340,894.
Where you live could factor into how much you’re able to save for retirement. Inconsistent state tax laws and burdens and costs of living play a major role in retirement savings averages, although the analysis did not adjust for these differences, Dabit explained.
Case in point: Hawaii, Washington, D.C., and New York did not make the top five although they sit on the wealthier end of the country’s income spectrum. Dabit hypothesized that their high costs of living could be what’s holding residents back from supercharged savings.
With such emphasis placed on retirement savings, there is no magic dollar amount regardless of the state you call home or where you’ll live out your golden years, Dabit said. It’s all predicated on individuality and desired lifestyle.
“Lots of people want to know how much they need to save for retirement, and the answer to that is you should be saving often as aggressively as you can and what makes sense for your goals,” he said. “But everybody's goals are different.”