Newsletters
Economy
- Hawaii is the most expensive state for a comfortable retirement at over $2 million for 25 years.
- Massachusetts, California, and New York all had minimums of $1.2 million for a comfortable retirement.
- Americans are conflicted over how much to save for retirement — some think they'll need $1.8 million.
Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Read preview
Thanks for signing up!
Access your favorite topics in a personalized feed while you're on the go.
Advertisem*nt
You will need upwards of $1 million for a comfortable 25-year retirement in 16 states — and $2 million in Hawaii.
A new analysis by GOBankingRates shared with Business Insider found that retirees will need over $1.1 million saved up for 25 years of retirement in the 10 most expensive states, including Massachusetts, California, and New York. And for a 30-year retirement in the 10 most expensive states, you'll need over $1.3 million.
Related stories
GoBankingRates estimated the yearly cost of expenditures for retirees using data from the Bureau of Labor Statistics' 2022 Consumer Expenditure Survey, the Missouri Economic Research and Information Center, and the Social Security Administration's Monthly Statistical Snapshot.
Hawaii topped the list as the only state where retirees need over $2 million for a comfortable 25-year retirement, according to the analysis. A comfortable 30-year retirement came in at $2.46 million. Hawaii had the highest annual expenditures of any state at nearly $104,000. These prices are driven by high housing and utility costs, and steep food prices, as many food products are shipped from the US mainland.
Advertisem*nt
For instance, GOBankingRates noted the annual price of groceries in Hawaii was $5,339, while annual housing costs were over $35,800. Utilities were also by far the highest at $6,913 each year.
Massachusetts, with annual expenditures averaging $85,600, was the second-most expensive state for a comfortable retirement, at $1.6 million for 25 years and $1.92 million for 30 years. Housing costs were over $26,500 a year, while utilities were $5,866 annually.
California and New York ranked third and fourth, respectively. California's minimum for 25 years of comfortable retirement was $1.43 million, well above New York's at $1.29 million.
Though not brought up in cost of living debates to the same extent as California or Florida, Alaska was fifth on the list with a nearly identical retirement minimum as New York. Alaska had the highest annual cost of groceries of any state at $5,814, as well as the most expensive annual healthcare costs at $11,227.
Advertisem*nt
Conversely, West Virginia, Mississippi, and Oklahoma were the three most affordable states for a comfortable retirement. Retirees needed $692,300 for a 25-year retirement in West Virginia and $714,000 in Mississippi.
Americans are conflicted over how much to save for retirement. A survey from August 2023 by Charles Schwab found that US workers believed they should save up $1.8 million to retire comfortably — which just over a third said they could reach. Another August survey by Schroders determined that adults expect to need about $5,000 a month for a comfortable retirement, or about $1.5 million over 25 years. AARP estimates Americans need to save enough to replace about 80% of their pre-retirement income, which comes to $2 million for a 25-year retirement for a worker making $100,000 a year.
Many Americans fear they won't have nearly enough for retirement, citing inflation for food and housing costs. Many younger Americans are starting retirement savings accounts earlier and more aggressively than their parents. Some are saving too much for retirement, such that they're sacrificing spending on what matters to them.
Read next
Watch: These are the best and worst places to retire in the US
Advertisem*nt
