Despite having a higher cost of living, Hawaii is one of the preferred places for many people to retire. It’s quite simple to understand why a large population of people would be willing to pay more money to spend their golden years in beautiful sunshine, close to the coastline and exciting activities. Hawaii is paradise on earth.
To comfortably retire in Hawaii, it’s estimated that you will need around $1.84 million. However, the amount you need can differ based on your standard of living, your life expectancy, health, and where you want to live. You will need to calculate your realistic living expenses and plan thoroughly.
Retiring takes years of planning and saving, and you will need to take inflation into account when you are evaluating your finances. You can use tools like the First Hawaiian Bank’s retirement calculator to figure out how much money you can realistically save. Before you retire, you need to be prepared for unexpected expenses that could eat away at your retirement nest egg.
Hawaii’s Cost Of Living
After spending most of our lives working, we all dream of a retirement filled with leisure and luxury. Afterall all of your hard work, you deserve that. However, not everyone can afford Hawaii’s cost of living, and most retirees living on the island have had to accumulate financial freedom to do so.
Hawaii’s average cost of living takes the average rental costs, food prices, basic necessities, and inflation into account. On average, you would need $119 004 per year to live comfortably. However, you can reduce your cost of living by living a smaller life and saving money on unnecessary expenses.
If you retire at 65 years old and expect to live to Hawaii’s national life expectancy of 86 years old, you will need to have at least 21 years of finances tucked away. This would amount to $2 499 084, based on the calculations done by the World Population Review.
You will need to account for how many years your retirement will need to last you. Speaking to a financial advisor who can assist you in solidifying your finances and creating a solid retirement plan is always a good idea.
When you begin planning for retirement, you will need to consider the cost of living in Hawaii. It’s crucial that you look into what you can afford and that you are aware of the amount of money you will need to live in Hawaii without drastically downgrading your lifestyle.
Average Cost Of Living Breakdown In Hawaii 2022
| Median Housing Cost | $732 000 |
| Rent: studio apartment | $1 000 – 1 600 |
| Rent: One bedroom apartment | $1 500 – 2 000 |
| Rent: two bedroom apartment | $1 800 + |
| Rent: Luxury one bedroom condo | $3 000 |
| Assisted Living (semi private room) | $11 437 |
| Assisted living (private room) | $13 216 |
| Utilities | $150 – $300 |
| Lunch (including drink) at affordable restaurant | $16 |
| 1lb boneless chicken | $4.68 |
| 16 oz of local cheese | $11 |
| Average grocery cost (based on a family of four) | $800 – 1 000 |
| 8mbps Internet | $53 |
| Public transport | $68 per month |
| Gas (¼ gallon) | $1.04 |
| Private doctor | $127 |
| Cold medication | $10 |
| Antibiotics | $16 |
| Standard dinner out for two | $63 |
Hawaii is the most expensive place to retire in the United States. Despite this, 37% of Hawaii’s population are older than 50 years old, and there are several incredible retirement communities across the island.
36.3% of Hawaii’s workforce are 55 and older, so it is possible to find work in Hawaii to supplement your retirement nest egg. Of course, working in your retirement isn’t ideal, but it is a viable option to find a part-time job that will keep you active and help you to afford your lifestyle if you have not saved enough to retire.
If living in a retirement community isn’t for you, home health care costs range from $4 814 per month. While you may be healthy enough not to need an in-home nurse, it’s essential to be realistic about your health and your needs as you grow older.
Adult daycare costs are roughly $1 517 per month at a supervised facility, and they are suitable for independent seniors who require some assistance during the day.
It’s difficult to consider that you may not always be independent. However, it’s essential to factor in the possibility that you may need to live in an assisted living facility. The cost of which ranges from $11 437 for a semi-private room to $13 216 for a private room.
Assisted living facilities provide 24/7 care and supervision, where nurses take care of the residents’ medication, rehabilitation, and food is provided to the residents. In addition, there are onsite therapists and doctors to take care of all the residents’ needs.
Living in a retirement community has several perks to it as well, even if it is not something you would have considered before. You will be with other people who are in the same stage of life that you are, and you will already have access to care facilities should your health suddenly decline.
There are various communities to choose from – ranging from independent living to full-time nursing homes. Retirement communities have workout rooms, activities, jacuzzis, pools, and walking trails, among other facilities available for their residents to use.
When you first retire in Hawaii, it’s likely that you can live independently easily but your needs will realistically change.
Factors That Will Impact Your Retirement
When you begin planning for retirement, it’s important to note that there are various factors that could impact how much money you will require to live comfortably for the remainder of your life.
Unfortunately, almost 1 in 4 Americans currently don’t have a retirement plan. So the earlier you start to plan for your retirement, the better off you will be.
It’s vital that you are realistic about the type of retirement you want to have and what you can afford. You can also use tools that will help you plan for retirement, such as the First Hawaiian Bank Calculator, to help you determine how much you can afford.
First Hawaiian Bank Calculator
The First Hawaiian Bank has a number of resources you can use to determine how much money you can accumulate by the time you retire and which factors are vital for you to consider while you are planning your retirement.
Your Current Health
Taking into account your lifestyle and your current health will help you determine how much you need to keep squared away for your future healthcare. In addition, genetic tests will provide you with an idea of what medical dispositions you are likely to develop throughout your lifetime.
Of course, it’s not always an exact science, as no one can tell the future, but knowing if you are likely to have ill health as you age will enable you to plan your retirement with more accuracy.
Health care
You may be in perfect health now, and while your family has a history of good health; you need to account for your future health care costs. Facing the realities of aging can be difficult for many people; nevertheless, it is crucial to assess how much money you will require to afford potential health care.
Life Expectancy
Hawaii has one of the highest life expectancies across the United States, and residents can expect to reach age 81 – 86 if they live to 65 years old. While having a longer life expectancy is an incredible achievement, you will need to ensure that you have enough money in your retirement fund to support yourself throughout your golden years.
To work out your own life expectancy, you should factor in your lifestyle and current health and look at your family history.
How You Want To Live
We all dream of retiring in laps of luxury after spending our entire lives working hard; however, it is not often possible to do so unless you have invested your money well throughout your life. It is possible to retire in Hawaii on a lower budget if you are willing to lower your standard of living.
You need to keep in mind that your retirement funds must last you 20+ years if you are lucky. Living a bigger lifestyle at the beginning of your retirement may be tempting while your nest egg is still big enough to support this.
Still, you do not want to put yourself in a position where you can’t afford health care or basic necessities later in your life. Your standard of living should account for potential unexpected expenses and the rising cost of inflation.
Your Family Life
Whether your dependents are currently fully independent, or will be by the time you want to retire, is another factor to consider. With rising student debts and wages not meeting the rise of inflation, more children are living with their parents for longer.
You may also have dependents who will require your constant care, for example, if you have a dependent with a disability living with you. It’s crucial to factor in these costs and ensure that your dependents will be taken care of should you become sick and require care yourself.
Your Age
If you are planning to retire early, you will need to ensure that you have enough money to last you until the end of your life. Early retirement is easier to do if you have passive income streams already set up and if you have invested your money in a way that you get consistent returns.
It is easiest to retire early if you have multiple passive income streams and reliable investment returns.
Where Are The Best Places To Retire In Hawaii
Hawaii is a vast island with beautiful cities to spend the next phase of your life in. There is a place for everyone’s taste, and finding a home for your retirement years will only depend on your standard of living and affordability.
Lihue, Kauai
Living in Lihue has a small-town atmosphere with a large variety of activities to keep you busy. The median cost of housing is $602 500, and the overall cost of living is more affordable than in other areas in Hawaii. In addition, Lihue is a coastal city with almost perfect weather.
Despite being a smaller town, you will still have access to amenities and several retirement communities which cater to the town’s senior citizens. Retiring in Lihue will feel like you are living in paradise.
Paia, Maui
Paia is arguably one of the best cities to retire in Hawaii. It is a smaller town, and there aren’t many tourists who frequent the area. As a result, it is a quieter city, all beaches are within a walking distance away, and there are plenty of exciting things to keep you busy.
You could even bump into a few celebrities from time to time. Maui is where many could only dream of retiring. Paia has incredible restaurants, interesting art galleries, and shops to visit. However, one downside is that Paia is more expensive to live in. The median home costs are $899 000.
Kailua-Kona, Big Island
Kailua-Kona is an exceptional city to live in and has a cheaper overall cost of living than Hawaii’s average. You can find studio apartments to rent for $1 100 and two-bedroom homes for $1 663. In addition, there are a number of award-winning golf courses in Kailua-Kona.
You can visit exciting breweries, and for the brave of heart, you can zipline through the Hawaiian forest. It is the perfect city for adventurers to find their feet and spend their remaining years in the sun.
In Conclusion
Despite being a more expensive state to retire in, Hawaii is one of the first choices for many people to retire. The higher cost of living comes with the benefit of being close to beautiful beach fronts, interesting restaurants, and endless activities to experience.
Hawaii has several retirement communities that cater to the senior population. There are facilities with varying degrees of assistance depending on your level of independence and health requirements. Retiring in Hawaii is an absolute paradise, and it is a perfect way to spend the remaining years of your life.
References
- https://investmentu.com/best-places-to-retire-in-hawaii/
- https://worldpopulationreview.com/state-rankings/average-retirement-income-by-state
- https://www.hawaiinewsnow.com/2019/02/19/heres-how-much-youd-need-save-retire-really-early-hawaii/
- https://www.fhb.com/en/resource-center/how-much-money-do-i-need-retire-0
- https://www.expatistan.com/cost-of-living/honolulu
- https://www.seniorliving.org/hawaii/
- https://investmentu.com/best-places-to-retire-in-hawaii/
- https://realhawaii.co/blog/cost-of-living-hawaii
- https://www.bestplaces.net/cost_of_living/city/hawaii/honolulu
- https://www.bestplaces.net/cost_of_living/city/hawaii/kailua_(hawaii_cnty)
