The National Institute on Retirement Security released on Thursday its State Financial Security Scorecards, which summarize each state's retirement outlook. Diane Oakley, executive director for NIRS, led a webinar on Thursday discussing the results.
"When we look at our primary findings across all states, one thing that becomes clear is that there's room for improvement in all [states] in one or more–and in many states all–measures of financial security for future retirees," Oakley said.
The states' scores are based on eight economic variables in three categories: retirement savings, current retiree costs, and labor market conditions for older workers, with 10 representing best conditions and 1 representing weakest conditions.
(Related: 9 Best States for Retirement Security)
Retirement income takes into account participation rates in private retirement plans; the average defined contribution account balance; and the marginal tax rate on pension income.
Retiree costs include Medicare out-of-pocket costs; Medicaid generosity, which was measured by the average spending by the state per elder beneficiary; and the housing cost burden.
The labor market score is based on the unemployment rate for people 55 and older, and the median hourly earnings rate for people in the same age group.
The weakest states had in common very high retiree costs and low wages, Oakley said. They also had low access to workplace retirement plans and low balances for people who had them.
Oakley noted, though, that even in the strongest states, comparing the actual amount of retirement savings to the average income in the state for the people who have saved usually comes up short. For example, "in Wisconsin, they had $45,600 saved, but this was less than their average annual wage of $66,000."
Hank Kim, executive director of the National Conference on Public Employee Retirement Systems, was also on the webinar. "The second decade of the new millennia has been very encouraging in terms of retirement security," he said.
"The concept of states trying to do something for their citizens is not entirely new," according to Kim. It was "kicked around" in the late '90s and some more activity in the mid-2000s, but "it wasn't until 2012 when we had two states, Massachusetts and California, that actually enacted legislation."
Now there are 10 states with efforts to support retirement systems in various stages of implementation, he said.
Here are the states that scored a 4 or lower in NIRS' State Scorecard:
