According to a new analysis by GOBankingRates, the location you choose for retirement could impact your savings needs by as much as $1.49 million.
Retiring in Hawaii comes with a high price tag. To cover essential living expenses such as housing, groceries, transportation, utilities, and health care for 25 years after retiring at age 65, you’d need approximately $2.21 million. That’s the highest estimated minimum required in any U.S. state.
In contrast, retiring in West Virginia is far more affordable. There, you would need just $712,913 to meet the same basic living costs over a 25-year retirement period — making it the most budget-friendly state in the country for retirees.
The estimates are derived from the average annual living expenses in each state, using the latest data provided by the U.S. Bureau of Labor Statistics. To calculate how much money is needed for retirement, the average annual Social Security income was subtracted from these expenses.
The remaining amount was then divided by 4%, following a widely used rule of thumb for withdrawing funds safely from retirement savings. It’s important to note that these figures represent the minimum needed to cover essential living costs and do not include optional expenses such as travel, hobbies, or entertainment.
While housing is the primary factor influencing cost differences between states, notable variations in health care, utilities, and transportation also contribute. These estimates provide a useful baseline for planning retirement savings, but it’s important to remember they’re based on averages and may not fully reflect individual circumstances such as inflation, lifestyle changes, or unforeseen expenses.
Here’s a look at the estimated total amount needed to retire at age 65 in each state:
