1 in 3 say it doesn’t make financial sense to retire in their location

Columbus, OH – Investors across America remain concerned about their retirement due to a variety of headwinds impacting their financial confidence. However, the challenges and priorities they are grappling with are not one-size-fits-all, according to a new Nationwide Advisor Authority study, powered by the Nationwide Retirement Institute.

As they consider whether or not relocating will improve their retirement finances, 32% of all investors do not believe their current location makes sense financially as a place to retire, led by those in the Northeast (41%) and West (37%) who often face higher tax burdens. About one in six investors (16%) across the country say they will be forced to relocate to a more affordable region due to cost of living in their area. Additionally, 41% of non-retired investors expect to retire at 66 or later, with Northeasterners (47%) being slightly more likely to share this view.

“While it’s clear that investors across America are facing many of the same challenges, their attitudes and actions may look a little different, depending on where they live,” said Eric Stevenson, president of Nationwide Retirement Solutions. “Between inflation and a lack of savings, many pre-retirees are likely feeling they don’t have enough to make a traditional retirement work. Our survey provides great insights to help advisors, financial professionals and plan sponsors across the country understand these investors and tailor their approach to meet their personalized needs.”

Investors in the Northeast feel the burden of high living costs

While many Northeastern investors remain optimistic about their retirement prospects, high living costs are prompting significant financial lifestyle changes before they leave the workforce.

Nearly half (46%) of Northeasterners describe their financial outlook for the next 12 months as optimistic. These investors indicated they had a median retirement savings of about $250,000. However, 20% expect to relocate to a more affordable region in retirement due to the cost of living, surpassing the national average of 16%.

One in four Northeastern investors (25%) anticipate working in retirement to supplement their income out of necessity due to cost of living, and 19% of non-retired Northeasterners say they might withdraw money from retirement savings prematurely to afford cost of living if they retired in the next 12 months.

According to Nationwide Retirement Solutions participant data across corporate, nonprofit and government sectors, some plan participants in the Northeast took potentially adverse actions with their 401(k) or 403(b) plans in 2024. Participants in this region had the second highest level of contribution stops and the lowest number of contribution increases among all regions.¹

Inflation, smaller nest eggs influence retirement in the Midwest  

Inflation remains a key concern for Midwest investors, with only 41% saying they were optimistic about their 12-month financial outlook – the lowest of all regions. Survey respondents also reported the smallest nest eggs of about $200,000.

While Midwest investors may be the most pessimistic, they also are the least likely to make financial lifestyle changes – perhaps due to the generally lower cost of living and taxes in their region. Just 32% of Midwesterners say they plan to work beyond age 65 – the smallest share of any region. Only 11% expect the cost of living in their area to force them to relocate to a more affordable region for retirement, well below the national average.

Nationwide Retirement Solutions plan participants across corporate, government and non-profit sectors in this region had the highest level of contribution increases to defined contribution plans in 2024, likely positioning themselves for better financial security over time.¹

Southern investors confident but expect to work longer

While 43% of Southern investors express an optimistic financial outlook for the next 12 months, they share many of the same concerns as the rest of the country.

Nearly three in 10 (27%) non-retired Southerners expect to delay retirement and 39% say they would need to continue working in some capacity to supplement their income if they retired in the next 12 months. Further, 62% believe the norm of retiring at 65 doesn’t apply to people like them, while 72% say living costs will impact their ability to retire. Southern survey respondents indicated they held a median retirement savings of $250,000.

Nationwide Retirement Solutions participant data across corporate, government and non-profit sectors shows participants in the Southern region were most likely among all regions to take hardship withdrawals from their 401(k) or 403(b) plans in 2024, a move that could have a long-term impact on their financial future.¹

Larger savings fuels financial confidence in the West

More than four in 10 (44%) investors in the West feel optimistic about their financial outlook in the next 12 months. What’s more, investors in this region indicated the highest median level of savings of all regions, at about $300,000.

However, inflation weighs on Western savers, with seven in 10 (69%) saying the cost of living will impact their ability to retire, and about 31% saying their current state or city is not the place they want to be in retirement.

Nationwide Retirement Solutions plan participant data across public, private and non-profit sectors shows Western savers took some potentially adverse actions in 2024, with higher levels of contribution stops and decreases in their 401(k) or 403(b) plans when compared to other regions.¹

Advisors help clients prepare for financial challenges

Advisors across the country are bracing for financial adversity, with 78% expressing concern about a U.S. economic recession over the next 12 months. Inflation tops the list of client concerns over the next 12 months, cited by 34% of advisors, with regional variations: Advisors said inflation concerns among clients were highest in the Northeast and Midwest (36% each), followed by the South (34%), and West (29%).

Tax planning and retirement savings remain top priorities across regions. Advisors frequently discuss tax planning strategies (Northeast 33%, Midwest 37%, South 37%, West 33%) and accumulating sufficient savings to enter or stay in retirement (Northeast 27%, Midwest 31%, South 32%, West 33%) with their clients.

Advisors are also emphasizing retirement timing and long-term care with clients. They say they are frequently talking to clients about when they are financially ready to retire (41% West, 33% Northeast, 37% Midwest, 32% South), and considering long-term care solutions (34% West, 22% Northeast, 21% Midwest, 24% South).

Advisors are largely unified in the solutions they use to help clients protect their assets against market risk, widely using annuities, with advisors in the Midwest (85%) and West (78%) most frequently incorporating them into client plans.

“It’s good to see advisors tuned into the needs of their clients who are thinking about relocating in retirement. Advisors have an opportunity to help these clients consider factors like tax implications, healthcare needs and availability, and community support to make a more informed decision about whether or where they should relocate,” Stevenson said. “To help ease worries about long-term financial security, I'd also encourage advisors to continue exploring protection and income solutions like annuities. Many employer-sponsored retirement plans across the country are now offering solutions that protect against volatility and guarantee income in retirement as well. Advisors also have a great opportunity to help their plan sponsor clients understand the value of including these solutions as an investment option within their plan to help participants feel more confident about their financial future.”

The Nationwide Retirement Institute offers additional resources to help advisors facilitate conversations with clients.

For additional insights on this survey data, see our infographic.

Nationwide’s tenth annual Advisor Authority study powered by the Nationwide Retirement Institute^® explores critical issues confronting advisors, financial professionals and individual investors—and the innovative techniques that they need to succeed in today’s complex market.

About Advisor Authority: Methodology
The Harris Poll, on behalf of Nationwide, conducted an online survey in the U. S. among 610 advisors and financial professionals and 2,496 investors ages 18+ with investable assets (IA) of $10K+, August 26-September 13, 2024. Among investors, there were 492 Northeasterners, 463 Midwesterners, 990 Southerners, and 551 Westerners. Among advisors, there were 135 Northeasterners, 137 Midwesterners, 195 Southerners, and 143 Westerners. The respondents were grouped into each region based on the state they indicated living in.

Regional cuts described in this study are defined as follows:

• Northeast: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont, New Jersey, New York, Pennsylvania
• Midwest: Illinois, Indiana, Michigan, Ohio, Wisconsin, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota
• South: Delaware, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, Washington, D.C., West Virginia, Alabama, Kentucky, Mississippi, Tennessee, Arkansas, Louisiana, Oklahoma, Texas
• West: Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, Wyoming, Alaska, California, Hawaii, Oregon, Washington

Respondents for this survey were selected from among those who have agreed to participate in our surveys.   The sampling precision of Harris online polls is measured by using a Bayesian credible interval.  For this study, the sample data for advisors is accurate to within + 4.0 percentage points and for investors the sample data is accurate to within + 2.5 percentage points using a 95% confidence level.  This credible interval will be wider among subsets of the surveyed populations of interest. The sample data for the subset of pre-retiree investors age 55-65 who are not retired is accurate to within + 6.7 percentage points using a 95% confidence level.