What a Comfortable Retirement Will Cost You in Each State
How much do you need to retire comfortably? It’s a question in the mind of every American saving for retirement. Unfortunately, there’s not a one-size-fits-all answer. There are several rules of thumb to help you figure out how much to save to retire. But the exact dollar amount you need will depend on a variety of factors — especially where you plan to live in retirement.
That’s because the cost of living varies from state to state. In some places, you can get by on even a small nest egg, while in others, even $2 million won’t be enough. Your age at retirement also plays a factor.
To pinpoint the average retirement income you would need to live comfortably throughout the U.S., GOBankingRates looked at five factors in all 50 states and the District of Columbia: an individual’s spending on groceries, healthcare, housing, utilities and transportation. Then, the annual retirement income needed to cover these living expenses was calculated, with an additional 20% to account for the “comfortable” aspect of retirement. The states are ranked from least to most expensive.
It should be noted that the suggested annual savings don’t include Social Security payouts, potential pension income or interest earned on savings.
Find out exactly how much you’ll need to retire comfortably in your state.
Last updated: October 1, 2020
Mississippi
Total expenditures: $42,953
20% comfort buffer: $10,738
Cost of a comfortable retirement annually: $53,691
Kansas
Total expenditures: $43,866
20% comfort buffer: $10,966
Cost of a comfortable retirement annually: $54,832
Oklahoma
Total expenditures: $43,967
20% comfort buffer: $10,992
Cost of a comfortable retirement annually: $54,959
New Mexico
Total expenditures: $44,221
20% comfort buffer: $11,055
Cost of a comfortable retirement annually: $55,276
Read: 50 Things Every 50-Something Should Know About Retirement
Arkansas
Total expenditures: $44,728
20% comfort buffer: $11,182
Cost of a comfortable retirement annually: $55,910
Missouri
Total expenditures: $44,779
20% comfort buffer: $11,195
Cost of a comfortable retirement annually: $55,973
Indiana
Total expenditures: $45,387
20% comfort buffer: $11,347
Cost of a comfortable retirement annually: $56,734
Alabama
Total expenditures: $45,438
20% comfort buffer: $11,359
Cost of a comfortable retirement annually: $56,797
Illinois
Total expenditures: $45,489
20% comfort buffer: $11,372
Cost of a comfortable retirement annually: $56,861
Tennessee
Total expenditures: $45,641
20% comfort buffer: $11,410
Cost of a comfortable retirement annually: $57,051
Georgia
Total expenditures: $45,641
20% comfort buffer: $11,410
Cost of a comfortable retirement annually: $57,051
Michigan
Total expenditures: $45,692
20% comfort buffer: $11,423
Cost of a comfortable retirement annually: $57,114
Iowa
Total expenditures: $46,351
20% comfort buffer: $11,588
Cost of a comfortable retirement annually: $57,938
Texas
Total expenditures: $46,503
20% comfort buffer: $11,626
Cost of a comfortable retirement annually: $58,129
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Ohio
Total expenditures: $46,706
20% comfort buffer: $11,676
Cost of a comfortable retirement annually: $58,382
West Virginia
Total expenditures: $46,858
20% comfort buffer: $11,714
Cost of a comfortable retirement annually: $58,572
Nebraska
Total expenditures: $47,061
20% comfort buffer: $11,765
Cost of a comfortable retirement annually: $58,826
Louisiana
Total expenditures: $47,416
20% comfort buffer: $11,854
Cost of a comfortable retirement annually: $59,270
Kentucky
Total expenditures: $47,771
20% comfort buffer: $11,943
Cost of a comfortable retirement annually: $59,713
Idaho
Total expenditures: $47,821
20% comfort buffer: $11,955
Cost of a comfortable retirement annually: $59,777
Wyoming
Total expenditures: $47,923
20% comfort buffer: $11,981
Cost of a comfortable retirement annually: $59,904
North Carolina
Total expenditures: $48,430
20% comfort buffer: $12,107
Cost of a comfortable retirement annually: $60,537
South Carolina
Total expenditures: $48,430
20% comfort buffer: $12,107
Cost of a comfortable retirement annually: $60,537
Wisconsin
Total expenditures: $48,531
20% comfort buffer: $12,133
Cost of a comfortable retirement annually: $60,664
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North Dakota
Total expenditures: $48,937
20% comfort buffer: $12,234
Cost of a comfortable retirement annually: $61,171
Utah
Total expenditures: $49,140
20% comfort buffer: $12,285
Cost of a comfortable retirement annually: $61,425
Florida
Total expenditures: $50,306
20% comfort buffer: $12,577
Cost of a comfortable retirement annually: $62,883
South Dakota
Total expenditures: $50,560
20% comfort buffer: $12,640
Cost of a comfortable retirement annually: $63,200
Arizona
Total expenditures: $50,763
20% comfort buffer: $12,691
Cost of a comfortable retirement annually: $63,453
Minnesota
Total expenditures: $51,321
20% comfort buffer: $12,830
Cost of a comfortable retirement annually: $64,151
Virginia
Total expenditures: $51,422
20% comfort buffer: $12,855
Cost of a comfortable retirement annually: $64,277
Colorado
Total expenditures: $52,335
20% comfort buffer: $13,084
Cost of a comfortable retirement annually: $65,418
Pennsylvania
Total expenditures: $52,335
20% comfort buffer: $13,084
Cost of a comfortable retirement annually: $65,418
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Delaware
Total expenditures: $54,617
20% comfort buffer: $13,654
Cost of a comfortable retirement annually: $68,271
New Hampshire
Total expenditures: $54,769
20% comfort buffer: $13,692
Cost of a comfortable retirement annually: $68,461
Montana
Total expenditures: $54,870
20% comfort buffer: $13,718
Cost of a comfortable retirement annually: $68,588
Nevada
Total expenditures: $55,175
20% comfort buffer: $13,794
Cost of a comfortable retirement annually: $68,968
Washington
Total expenditures: $56,899
20% comfort buffer: $14,225
Cost of a comfortable retirement annually: $71,124
Maine
Total expenditures: $58,420
20% comfort buffer: $14,605
Cost of a comfortable retirement annually: $73,025
Vermont
Total expenditures: $59,181
20% comfort buffer: $14,795
Cost of a comfortable retirement annually: $73,976
See: How Long $500K Will Last in Retirement in Each State
Rhode Island
Total expenditures: $60,144
20% comfort buffer: $15,036
Cost of a comfortable retirement annually: $75,181
New Jersey
Total expenditures: $62,071
20% comfort buffer: $15,518
Cost of a comfortable retirement annually: $77,589
Connecticut
Total expenditures: $62,984
20% comfort buffer: $15,746
Cost of a comfortable retirement annually: $78,730
Maryland
Total expenditures: $64,911
20% comfort buffer: $16,228
Cost of a comfortable retirement annually: $81,139
Alaska
Total expenditures: $65,114
20% comfort buffer: $16,279
Cost of a comfortable retirement annually: $81,393
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Massachusetts
Total expenditures: $65,773
20% comfort buffer: $16,443
Cost of a comfortable retirement annually: $82,217
Oregon
Total expenditures: $68,106
20% comfort buffer: $17,027
Cost of a comfortable retirement annually: $85,133
California
Total expenditures: $72,366
20% comfort buffer: $18,092
Cost of a comfortable retirement annually: $90,458
New York
Total expenditures: $79,060
20% comfort buffer: $19,765
Cost of a comfortable retirement annually: $98,825
District of Columbia
Total expenditures: $81,494
20% comfort buffer: $20,374
Cost of a comfortable retirement annually: $101,868
Hawaii
Total expenditures: $100,207
20% comfort buffer: $25,052
Cost of a comfortable retirement annually: $125,259
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Methodology: GOBankingRates analyzed the following expenditures of Americans ages 65 and older, based on the following data sourced from the Bureau of Labor Statistics’ most recent Consumer Expenditure Survey release (July 2018 through June 2019): (1) annual spending on groceries, defined as “food at home”; (2) annual spending on housing, defined as “shelter”; (3) annual spending on transportation, defined as”gasoline, other fuels, and motor oil” and “other vehicle expenses”; (4) annual spending on healthcare; (5) annual spending on utilities, defined as “utilities, fuels, and public services”; and (6) overall average annual expenditures. Spending estimates were adjusted to the state level by multiplying each cost category by its corresponding cost of living index score in each state, sourced from the Missouri Economic Research and Information Center’s 2020 Q1 cost of living index data. After calculating total consumption expenditures, an additional (7) savings buffer was calculated by assuming that total expenditures consume 80% of one’s budget (50% for necessities and 30% for discretionary spending), with 20% left over for savings. GOBankingRates then combined factors (6) and (7) and factored it out by 20 (assuming 20 years of retirement) to give (8) the retirement savings needed to live comfortably. All data was collected on and up to date as of June 29, 2020.
This article originally appeared on GOBankingRates.com: What a Comfortable Retirement Will Cost You in Each State
