Here's the Downside to Low Rent

July 31st 2015

Alex Mierjeski

For many young people facing joblessness or inordinately high costs of living in cities like New York and San Francisco, one common escape route often involves moving to a cheaper locale, where the dollar goes further, and a comfortable lifestyle is more easily attainable. 

But living in a cheaper state, potentially an easy out in the short term, could spell trouble for financial well-being down the road thanks to generally lower wages in those states, according to a report by the National Institute on Retirement Security (NIRS). 

The analysis, which examined the "retirement readiness of future retirees" state-by-state, noted that in states such as Wyoming, Alaska, Minnesota, and North Dakota, labor markets are strong and the costs of living are low, but "potential retirement income for retirees" is weak. As a result, residents there could face economic pressures down the road––especially when self-sufficiency is the retirement ideal.

"We developed the State Financial Security Scorecards [report] to dig deep and really understand the root causes of why future retirees will struggle in some states," said NIRS executive director Diane Oakley in a release Thursday. "Now, policymakers have a tool to identify the most urgent priorities and can take action to head off the looming retirement crisis in their states."

Poor prospects for young peoples' retirement planning is just one aspect of the report, which took the form of an interactive map of scorecards for the 50 states and the District of Columbia, gauging retirement readiness. The analysis, which looked at anticipated retirement income, retirement costs like housing and healthcare, and the labor market for older workers in each state, found that across almost all states, residents "will fall short in meeting their economic needs in retirement." States such as Wyoming, Alaska, Minnesota, and North Dakota ranked highly (despite low income for potential retirees), while California, Florida, and South Carolina ranked at the bottom thanks to high retiree costs, low potential retirement income, bad labor markets for older workers, and poor access to workplace retirement plans. 

For more on how each individual states rank, head over to the NIRS website.

For more, check out ATTN:'s recent coverage on how much $100 is worth in every state.