Thinking About Early Retirement? In Honolulu or Hawaii?

Retiring at the age of 40 in Hawaii certainly sounds wonderful – that is, for those who qualify. However, according to a recent analysis by Seattle-based Redfin Corp, candidates need to have a household income of about $185,000 per year and managed to save about $80,000 per year for their almost 20 years in the workforce. These early retirees can afford to buy a two-bedroom condo for over $400,000 in Honolulu. Otherwise, retiring to Honolulu at age 40 may be, so to speak, a bit premature. Redfin admits that retiring to the Aloha State at age 40 could be a lofty goal.

Honolulu consistently ranks among the nation’s cities with the highest housing and living costs. So despite its many attractions, the city is not affordable for most retirees at any age. Despite being notorious for its high cost of living, however, for many reasons Hawaii may be one of the best states in which to retire, according to another study, by Bankrate, a New York-based financial service company. Although also at the bottom of affordability in the Bankrate study, Hawaii grabbed the top spot for its weather and high rankings for culture, wellness and low crime.

Part of the problem for retirees at any age looking at studies of places to retire in the U.S. is their different conclusions. In contrast to Redfin and Bankrate, Kiplinger’s study in 2018 ranked Hawaii as the second best state in the nation for retirement in spite of its price tag. An important part of the higher score for Hawaii in Kiplinger’s study was that health care costs were 11.4% below the national average. The state’s health care system was ranked tops by Bloomberg. Credit apparently goes to the state’s highly efficient health care system.

So what are the best choices in the nation for retirement, early or otherwise? If you want the best score for affordability, according to Kiplinger its South Dakota. For both wellness and affordability, choose Nebraska. But by comparison, even with its low affordability score for retirees, Hawaii still looks darn appealing!