The amount of money you need to retire comfortably in the United States varies significantly depending on the state you choose to live in, with differences as high as $1.49 million, according to a new analysis by GoBankingRates.
As the cost of living continues to shift across the country, retirees are finding that their savings requirements differ dramatically, with some states requiring far less than others to maintain a comfortable lifestyle.
For instance, Hawaii stands out as the most expensive state for retirement, with a total savings requirement of around $2.21 million for a 65-year-old retiree to cover essential living expenses such as housing, groceries, healthcare, utilities, and transportation for the next 25 years.
On the other end of the spectrum, West Virginia requires a mere $712,913 to achieve the same goals, making it the most affordable state for retirement.
These figures are based on an analysis of the average annual living expenses in each state, using the most current data from the US Bureau of Labor Statistics.
GoBankingRates subtracted the average Social Security income from these expenses and applied the 4% rule — a widely accepted standard for withdrawing from retirement savings.
It’s important to note that this estimate reflects the bare minimum required and does not account for discretionary spending such as travel or entertainment, which could further impact a retiree’s budget.
Several factors, including housing, healthcare, transportation, and utilities, drive the differences in savings needs.
Housing, in particular, is the biggest contributor to cost variations across states. While the cost of housing in places like California and Hawaii is steep, other states like West Virginia and Mississippi are much more affordable.
Healthcare costs also play a significant role, as some regions have higher healthcare premiums and out-of-pocket expenses for retirees.
Here’s a look at the minimum retirement savings required for a comfortable life at age 65 in each state, covering just the essentials:
Retirement savings requirements by state:
Alabama
Annual Living Costs: $53,357
Required Savings: $773,000
Alaska
Annual Living Costs: $74,147
Required Savings: $1,292,753
Arizona
Annual Living Costs: $67,778
Required Savings: $1,133,522
Arkansas
Annual Living Costs: $53,477
Required Savings: $776,005
California
Annual Living Costs: $86,946
Required Savings: $1,612,716
Colorado
Annual Living Costs: $61,709
Required Savings: $981,803
Connecticut
Annual Living Costs: $67,117
Required Savings: $1,116,998
Delaware
Annual Living Costs: $60,207
Required Savings: $944,248
Florida
Annual Living Costs: $61,529
Required Savings: $977,296
Georgia
Annual Living Costs: $54,980
Required Savings: $813,559
Hawaii
Annual Living Costs: $110,921
Required Savings: $2,212,084
Idaho
Annual Living Costs: $61,289
Required Savings: $971,288
Illinois
Annual Living Costs: $57,383
Required Savings: $873,646
Indiana
Annual Living Costs: $54,859
Required Savings: $810,555
Iowa
Annual Living Costs: $54,319
Required Savings: $797,035
Kansas
Annual Living Costs: $52,095
Required Savings: $741,455
Kentucky
Annual Living Costs: $55,821
Required Savings: $834,590
Louisiana
Annual Living Costs: $56,181
Required Savings: $843,603
Maine
Annual Living Costs: $68,199
Required Savings: $1,144,038
Maryland
Annual Living Costs: $59,426
Required Savings: $924,720
Massachusetts
Annual Living Costs: $88,268
Required Savings: $1,645,764
Michigan
Annual Living Costs: $55,460
Required Savings: $825,577
Minnesota
Annual Living Costs: $57,263
Required Savings: $870,642
Mississippi
Annual Living Costs: $52,576
Required Savings: $753,472
Missouri
Annual Living Costs: $53,477
Required Savings: $776,005
Montana
Annual Living Costs: $56,482
Required Savings: $851,114
Nebraska
Annual Living Costs: $55,761
Required Savings: $833,087
Nevada
Annual Living Costs: $60,147
Required Savings: $942,746
New Hampshire
Annual Living Costs: $66,997
Required Savings: $1,113,994
New Jersey
Annual Living Costs: $68,980
Required Savings: $1,163,566
New Mexico
Annual Living Costs: $55,821
Required Savings: $834,590
New York
Annual Living Costs: $74,147
Required Savings: $1,292,753
North Carolina
Annual Living Costs: $58,645
Required Savings: $905,192
North Dakota
Annual Living Costs: $55,340
Required Savings: $822,572
Ohio
Annual Living Costs: $57,023
Required Savings: $864,633
Oklahoma
Annual Living Costs: $52,816
Required Savings: $759,481
Oregon
Annual Living Costs: $66,096
Required Savings: $1,091,462
Pennsylvania
Annual Living Costs: $57,023
Required Savings: $864,633
Rhode Island
Annual Living Costs: $67,538
Required Savings: $1,127,514
South Carolina
Annual Living Costs: $57,203
Required Savings: $869,140
South Dakota
Annual Living Costs: $55,460
Required Savings: $825,577
Tennessee
Annual Living Costs: $54,078
Required Savings: $791,027
Texas
Annual Living Costs: $55,641
Required Savings: $830,083
Utah
Annual Living Costs: $65,795
Required Savings: $1,083,951
Vermont
Annual Living Costs: $68,559
Required Savings: $1,153,051
Virginia
Annual Living Costs: $60,387
Required Savings: $948,755
Washington
Annual Living Costs: $68,259
Required Savings: $1,145,540
West Virginia
Annual Living Costs: $50,954
Required Savings: $712,913
Wisconsin
Annual Living Costs: $59,666
Required Savings: $930,729
Wyoming
Annual Living Costs: $57,323
Required Savings: $872,144
While these numbers provide a useful starting point, it’s essential to remember that they are averages and don’t account for personal lifestyle choices or unexpected costs like inflation or medical emergencies.
Depending on your lifestyle and retirement goals, your required savings may differ.
Retirement planning should be tailored to individual needs, but understanding these state-specific figures can offer retirees a helpful guide to budgeting for the future.
As the landscape of retirement continues to evolve, these estimates provide insight into how to better prepare for a comfortable and financially secure retirement.
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