You are currently viewing Here’s how much money you’d need to retire in Hawaii — and the biggest downsides, says a millionaire

Here’s how much money you’d need to retire in Hawaii — and the biggest downsides, says a millionaire

In 2012, at age 34, I quit my job in investment banking and took early retirement with a net worth of $3 million. Currently, I live in San Francisco with my wife and two young children.

But since 1977, I regularly go back and forth to Hawaii, where my parents have been retired for 15 years. They lead a simple life on a modest budget, living off their retirement savings and a government pension – thanks to the three decades they spent working in the US Foreign Service.

Seeing my parents live their dream, we want to follow in their footsteps. Our plan is to move to Hawaii by 2025. Between my parents’ experience and mine, I’ve learned a lot about the ins and outs of a Hawaii retreat.

Our consensus is that it’s a wonderful place to spend your after-work years and live the beachside dream life – although there are still a few downsides to keep in mind.

How much money do you need to retire in Hawaii?

The Disadvantages of Retiring to Hawaii

The Benefits of Retiring to Hawaii

Yes, it is expensive. But if you’re curious about what it might be like to retire in Hawaii, here are some surprising benefits:

1. Less stress and quality health care

Hawaii was ranked second in happiness and well-being in a Healthcare company Sharecare 2021 study.

My parents worked in Washington DC, Paris, Guangzhou, Kobe, Taipei and other major cities before retiring to Honolulu. They found their Hawaiian lifestyle incredibly relaxing compared to all the other cities they lived in.

2. Top notch healthcare

The United Health Foundation also ranks Hawaii as the third healthiest state in the country. And according to US News’ list of best states for health care, Hawaii takes the top spot.

I’m not surprised. Hawaii has great weather most of the year, public beaches and parks, a variety of locally grown and raised foods, and excellent access to preventative medical and dental care.

If you are looking for a healthier and more active lifestyle, you can definitely find it in Hawaii.

3. ‘Ohana’ means family

An important part of Hawaiian culture is the care and nurturing of family and friends, or “ohana”. I have observed that almost everywhere you go, be it a restaurant or a mall, things are designed to be a family experience.

Also, it’s not uncommon to have multiple generations under one roof in Hawaii.. Although my wife, children and I will probably not live in my parents’ house, we hope to rent or buy nearby.

4. Huge diversity

Hawaii tops the list of states with the most diverse population in the country, ahead of California and Nevada, according to data from the US Census Bureau.

5. Decent tax benefits

Hawaii ranks as having one of the lowest property tax rates in the country, averaging just 0.28%. If you have a federal pension, it is exempt from state income tax. And the sales tax rate is a reasonable 4% to 4.5%, compared to 7.25% to 8.25% in California.

However, Hawaii also has one of the highest income tax rates in the state, reaching 11% if you earn over $200,000. If you earn between $48,001 and $150,000, you pay an income tax rate of 8.25%.

Why I want to retire in Honolulu

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