Retirement is something most people look forward to. It’s the time to relax, travel, or spend more time with loved ones. But in the U.S., retiring comfortably isn’t cheap. The cost of living varies by state, and in some places, you need to be a millionaire just to cover basic expenses.
A recent study by GOBankingRates found that in 15 states, retirees need at least $1 million in savings to get by for 25 years. This includes essential costs like housing, food, healthcare, and transportation.
The Most Expensive States for Retirement
Some states are much pricier than others when it comes to retirement. The study highlights that Hawaii is the most expensive state to retire in. To cover basic expenses, a retiree would need about $2.21 million saved up.
Other costly states include:
- Massachusetts – Requires about $1.64 million in savings
- California – Needs about $1.61 million
Despite their high costs, these states remain popular due to their climate, healthcare, and quality of life. But living there without a solid financial plan can be tough.
Beyond the top three, several other states also require a hefty savings cushion. Here’s a look at a few of them:
| State | Estimated Savings Needed | Annual Cost of Living |
| Alaska | $1.29 million | $74,147 |
| New York | $1.29 million | $74,147 |
| New Jersey | $1.16 million | $68,980 |
These states have high housing costs, expensive medical care, and other rising expenses that make retirement a challenge. If you want to learn the best 10 states to retire comfortably on Social Security.
Other Pricey States for Retirement
Retirement should be a time to enjoy life, but in some states, it’s hard to make ends meet without significant savings. After Hawaii, Massachusetts, and California, the next most expensive states are Alaska and New York. In these states, the annual cost of living is around $74,147, and you’d need about $1.29 million saved up to retire comfortably.
New Jersey isn’t far behind, with an annual cost of living of $68,980 and required savings of $1.16 million. These numbers highlight just how challenging it can be to retire in some parts of the U.S.
Why Is Retirement So Expensive?
The main reason retirement can be so costly is the rising cost of living, especially in popular states. Housing, healthcare, and everyday expenses keep going up, and if you don’t plan ahead, it’s easy to run out of money. That’s why it’s so important to start saving early and think carefully about where you want to live during retirement.
Common questions
1. Why is Hawaii the most expensive state for retirement?
Hawaii has high costs for housing, groceries, and healthcare, making it the priciest state to retire in.
2. What are some affordable states for retirement?
States like Mississippi, Arkansas, and West Virginia have lower costs compared to places like California or New York.
3. How much should I save for retirement?
The amount varies based on location and lifestyle, but aiming for at least $1 million is a good start in many states.
4. Does Social Security cover all retirement expenses?
No, Social Security typically covers only part of living costs. Most retirees need additional savings.
5. What other financial help is available for retirees?
Programs like Social Security, pensions, and benefits like the IRS Earned Income Tax Credit (EITC) can provide extra support.