As concerns grow about the future of Social Security and the impact of a volatile stock market on retirement savings, a new survey reveals that retirees in fifteen states need more than $1 million in savings just to cover basic living expenses. California ranks as the third most expensive state for retirees, with an estimated annual cost of nearly $1.6 million over 25 years. In Hawaii, retirees face the highest costs, with expenses exceeding $2.2 million to maintain a comfortable standard of living.
Massachusetts comes in second at $1.6 million. While retirees in California need around $87,006 annually, those in Kansas require significantly less at about $52,276 per year. After accounting for Social Security income, retirees in California would still need to cover $63,832 in annual expenses, compared to $29,101 for those in Kansas.
Retirement savings requirements by state
Financial experts stress that retirement costs vary widely depending on location. “Where you choose to spend your golden years is critical,” researchers noted.
The minimum savings required were calculated based on the costs of essentials such as housing, food, transportation, and healthcare. Data from the Bureau of Labor Statistics’ 2023 Consumer Expenditure Survey and the Missouri Economic Research and Information Center’s 2024 Q3 cost-of-living series were used to determine these figures. Researchers subtracted the annual average Social Security income from each state’s annual expenditures. Then they divided by 4%, a standard guideline for how much retirees should draw down their savings each year, to determine the required savings.
Here are the states where retirees need a minimum savings exceeding $1 million:
Hawaii: $2,228,205
Massachusetts: $1,612,313
California: $1,595,789
Alaska: $1,280,333
New York: $1,272,822
Maryland: $1,152,648
New Jersey: $1,142,133
Vermont: $1,139,128
Washington: $1,136,124
New Hampshire: $1,112,089
Connecticut: $1,107,583
Rhode Island: $1,106,080
Maine: $1,104,578
Oregon: $1,103,076
Arizona: $1,095,565
The tariff battle’s impact on the stock market has brought additional worries about retirement investments. As the cost of living continues to climb, it underscores the importance of adequate planning and saving for retirement.
