{"id":1029,"date":"2020-09-28T15:03:36","date_gmt":"2020-09-28T15:03:36","guid":{"rendered":"https:\/\/bestretirementcities.org\/?p=1029"},"modified":"2022-12-27T20:33:00","modified_gmt":"2022-12-27T20:33:00","slug":"which-states-allow-retirees-to-have-the-most-buying-power","status":"publish","type":"post","link":"https:\/\/bestretirementcities.org\/which-states-allow-retirees-to-have-the-most-buying-power\/","title":{"rendered":"Which States Allow Retirees To Have The Most Buying Power?"},"content":{"rendered":"

When we did our research on the best states to retire to<\/a>, we wanted to be objective.\u00a0 \u00a0 However, while it’s nice to consider moving to states without income taxes<\/a> for instance, but chances are good you won’t make the same income as you used to, but you might still be buying necessities.\u00a0 \u00a0 There is a cost of living index, but we decided to look at how much a $100 is worth in each state.\u00a0 \u00a0Cost of living takes into account a variety of factors but it’s hard to figure out if it’ll apply to you in your retirement, whereas $100 is a $100.\u00a0 \u00a0If it goes further in a particular state then it stands to reason the cost of living will be less overall anyway.<\/p>\n

What’s $100 Worth?<\/h2>\n

<\/p>\n

For instance, Arkansas is considered a \u201clow-price\u201d state compared to the national mean. When an average American spends money on goods, Arkansans pay less to purchase that same amount. Put another way, let\u2019s say you travel to Arkansas and spend $100 on a cart-full of groceries. For the other 49 states (on-average), those same groceries would actually cost $115.07. If you were to go to the popular state to retire to Texas,<\/a> instead, $100 worth of groceries would cost other Americans (on-average) $103.20. Likewise in Maryland, residents pay $100 at the supermarket for what the average American pays $91.32.<\/p>\n

Prices for the same goods fluctuate widely depending which state you happen to be in. For instance, a dollar in Arkansas is able to purchase more goods than a dollar (on average) elsewhere in the country. In-fact, Arkansas\u2019 $115.07 mark makes it the state with the 3rd highest buying power in the country. Of course this trend goes both ways; while Arkansas, Mississippi, and Alabama pay $100 for what average Americans pay $115, states on the other end of the spectrum (New York, California, New Jersey) pay $100 for what average Americans pay $87. Below are the states with the highest and lowers buying power; do you notice a trend?<\/p>\n

State Relative Value of $100 Rank<\/h2>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Value of $100 By State<\/caption>\n
State<\/th>\nRelative Value of $100<\/th>\nRank<\/th>\n<\/tr>\n<\/thead>\n
Arkansas<\/td>\n$117.23<\/td>\n1<\/td>\n<\/tr>\n
Mississippi<\/td>\n$116.28<\/td>\n2<\/td>\n<\/tr>\n
Alabama<\/td>\n$115.74<\/td>\n3<\/td>\n<\/tr>\n
West Virginia<\/td>\n$113.90<\/td>\n4<\/td>\n<\/tr>\n
Kentucky<\/td>\n$113.90<\/td>\n4<\/td>\n<\/tr>\n
South Dakota<\/td>\n$113.77<\/td>\n6<\/td>\n<\/tr>\n
Oklahoma<\/td>\n$113.12<\/td>\n7<\/td>\n<\/tr>\n
Ohio<\/td>\n$113.12<\/td>\n7<\/td>\n<\/tr>\n
Missouri<\/td>\n$112.61<\/td>\n9<\/td>\n<\/tr>\n
Louisiana<\/td>\n$112.23<\/td>\n10<\/td>\n<\/tr>\n
Iowa<\/td>\n$112.11<\/td>\n11<\/td>\n<\/tr>\n
Indiana<\/td>\n$111.98<\/td>\n12<\/td>\n<\/tr>\n
Nebraska<\/td>\n$111.73<\/td>\n13<\/td>\n<\/tr>\n
Tennessee<\/td>\n$111.23<\/td>\n14<\/td>\n<\/tr>\n
Kansas<\/td>\n$111.11<\/td>\n15<\/td>\n<\/tr>\n
North Dakota<\/td>\n$110.38<\/td>\n16<\/td>\n<\/tr>\n
South Carolina<\/td>\n$109.77<\/td>\n17<\/td>\n<\/tr>\n
New Mexico<\/td>\n$109.77<\/td>\n17<\/td>\n<\/tr>\n
North Carolina<\/td>\n$108.93<\/td>\n19<\/td>\n<\/tr>\n
Wisconsin<\/td>\n$108.81<\/td>\n20<\/td>\n<\/tr>\n
Michigan<\/td>\n$108.23<\/td>\n21<\/td>\n<\/tr>\n
Idaho<\/td>\n$108.11<\/td>\n22<\/td>\n<\/tr>\n
Wyoming<\/td>\n$107.87<\/td>\n23<\/td>\n<\/tr>\n
Georgia<\/td>\n$107.53<\/td>\n24<\/td>\n<\/tr>\n
Montana<\/td>\n$107.18<\/td>\n25<\/td>\n<\/tr>\n
Arizona<\/td>\n$103.63<\/td>\n26<\/td>\n<\/tr>\n
Utah<\/td>\n$103.52<\/td>\n27<\/td>\n<\/tr>\n
Texas<\/td>\n$103.31<\/td>\n28<\/td>\n<\/tr>\n
Nevada<\/td>\n$102.56<\/td>\n29<\/td>\n<\/tr>\n
Minnesota<\/td>\n$102.56<\/td>\n29<\/td>\n<\/tr>\n
Pennsylvania<\/td>\n$102.56<\/td>\n29<\/td>\n<\/tr>\n
Illinois<\/td>\n$101.94<\/td>\n32<\/td>\n<\/tr>\n
Delaware<\/td>\n$101.21<\/td>\n33<\/td>\n<\/tr>\n
Rhode Island<\/td>\n$100.70<\/td>\n34<\/td>\n<\/tr>\n
Maine<\/td>\n$100.00<\/td>\n35<\/td>\n<\/tr>\n
Florida<\/td>\n$99.40<\/td>\n36<\/td>\n<\/tr>\n
Oregon<\/td>\n$98.91<\/td>\n37<\/td>\n<\/tr>\n
Colorado<\/td>\n$98.14<\/td>\n38<\/td>\n<\/tr>\n
Virginia<\/td>\n$98.04<\/td>\n39<\/td>\n<\/tr>\n
Vermont<\/td>\n$97.09<\/td>\n40<\/td>\n<\/tr>\n
Alaska<\/td>\n$95.42<\/td>\n41<\/td>\n<\/tr>\n
New Hampshire<\/td>\n$94.34<\/td>\n42<\/td>\n<\/tr>\n
Connecticut<\/td>\n$94.25<\/td>\n43<\/td>\n<\/tr>\n
Washington<\/td>\n$92.76<\/td>\n44<\/td>\n<\/tr>\n
Maryland<\/td>\n$92.25<\/td>\n45<\/td>\n<\/tr>\n
Massachusetts<\/td>\n$91.16<\/td>\n46<\/td>\n<\/tr>\n
New Jersey<\/td>\n$86.81<\/td>\n47<\/td>\n<\/tr>\n
California<\/td>\n$86.66<\/td>\n48<\/td>\n<\/tr>\n
District of Columbia<\/td>\n$86.13<\/td>\n[49]<\/td>\n<\/tr>\n
New York<\/td>\n$85.91<\/td>\n49<\/td>\n<\/tr>\n
Hawaii<\/td>\n$84.67<\/td>\n50<\/td>\n<\/tr>\n<\/tbody>\n
Source: U.S. Bureau of Economic Analysis,\u00a0Regional Price Parities<\/em><\/a>.<\/p>\n

Note: Washington, D.C.\u2019s rank does not affect states\u2019 ranks, but the figure in parentheses indicates where it would rank if included.<\/td>\n<\/tr>\n<\/tfoot>\n<\/table>\n

Cost of Living and the Value of a Dollar<\/h2>\n

This statistic can be misleading. As we discussed earlier, it\u2019s not necessarily that the \u201cvalue\u201d of money changes as you cross state borderlines (or perhaps more appropriately, cross regional boarders). What does change are the local prices. Things like gasoline, housing, transportation, groceries, utilities, and alcohol certainly fluctuate depending on which state you\u2019re in, and to some degree which area of the state you\u2019re in.<\/p>\n

This is more commonly called the \u201cprice of living\u201d, and it dramatically influences how average American households conduct their day-to-day lives. Looking at the table above, the state with the highest relative value of $100 is Mississippi (at $115.74) and the lowest is Hawaii (at $84.46). Hawaii is actually somewhat of an anomaly. Because of the remote location of the state, transporting goods to the island costs quite a bit of money. Those prices largely get pushed onto consumers, which is why the cost of gasoline or groceries in Hawaii is far beyond anything else seen in the contiguous 48 states.<\/p>\n

Let\u2019s move down to California, the state with the fourth lowest relative value of $100. Real purchasing power in Mississippi is 34% greater than it would be in California. Put another way, you\u2019re dollar goes 34% farther in Mississippi. So why is California more popular of an area?<\/p>\n

Here are a few more statistics that may be worth considering:<\/p>\n