Tags: Retirement | retirement | Hawaii | cost of living

Retirement Cost of Living in Hawaii

By    |   Wednesday, 03 Jun 2015 11:59 AM

Pristine beaches, perfect temperatures, and luscious tropical landscapes – what's not to love about the idea of retiring to Hawaii? For many, it’s the cost of living. Bankrate’s list of the Best and Worst States to Retire ranked Hawaii last in cost of living. Still, the chain of islands also ranked first for community well-being, so it’s worth a closer look to determine the true costs of living your retirement years in in this tropical state.

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The U.S. Commerce Department’s Bureau of Economic Analysis found that Hawaii’s cost of living is 16 percent higher than elsewhere in the nation, since transportation costs factor in to just about everything for sale. Food costs are high in Hawaii, since most of the groceries are shipped over from the mainland. Grocery bills at the supermarket can be double those on the mainland. A gallon of milk can cost more than $6 on Oahu. Luckily, the introduction of big box stores like Costco has helped to bring prices down slightly.

If you can afford it, it’s smart to invest in real estate, because property taxes are relatively low and rent is relatively high. A single-family home averages around $650,000, according to Honolulu Magazine. If you do plan to rent, be prepared to pay for what you get. Hawaii has the highest median monthly gross rent in the nation, at $1,414 in 2013, according to the U.S. Census. That’s more than $500 above the national average, and it’s rising.

Unfortunately, more than food and rent costs are expensive. Gas has an added tax of 63.4 cents/gallon, and AAA said it was about $3.31 per gallon in mid-2015. Electricity averages around $222/month, even with the temperate climate, according to Hawaii Electric’s cost roundup. 

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The state’s high tax rate doesn’t help make paradise affordable for many who wish to retire there. There is a general excise tax of 4 percent throughout most of the islands (4.5 percent in Oahu), with prescription drugs exempt. Even food is taxed. A general excise is a tax charged on the gross receipts of businesses for the privilege of doing business in Hawaii, according to the Hawaii Reporter. Many businesses pass this tax along to their customers.

True, there is a price to pay for living so close to beautiful Pacific shorelines with a relaxed, island lifestyle. But with proper planning, budgeting and research, you can retire to Hawaii and live the life many only dream of.

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Pristine beaches, perfect temperatures, and luscious tropical landscapes - what's not to love about the idea of retiring to Hawaii? For many, it's the cost of living. Bankrate's list of the Best and Worst States to Retire ranked Hawaii last in cost of living.
retirement, Hawaii, cost of living
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2015-59-03
Wednesday, 03 Jun 2015 11:59 AM
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