Yahoo Finance Here’s Exactly How Much Savings You Need To Retire in Your State
The average American's lack of savings paints a fairly discouraging picture of retirement. A GOBankingRates survey found that 40% of Americans have less than $300 in savings - putting a crimp in retirement savings. Many Americans see themselves working past age 65 out of financial necessity, according to the Pew Charitable Trusts, with some people planning to never retire at all. The pandemic may also have thrown some people's futures into question, for those who had to draw from retirement savings during job loss or furlough.
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But the amount of money you need to retire depends on where you live, due to state-by-state differences in the cost of living. In some areas of the country, a nest egg of $550,000 may be sizable enough for retirement. In other regions, you have to build up your savings even more to reach at least $1 million in retirement funds.
To find out exactly how much you need saved to retire, GOBankingRates calculated annual expenditures for a retired person in every state after deducting Social Security income, based on data from the Bureau of Labor Statistics and the Missouri Economic Research and Information Center. The study assumed that you would draw down your savings by 4% every year to cover your living expenses, and states were ranked from the smallest nest egg needed to the biggest.
GOBankingRates found that residents of many Southeastern and Southwestern states won't have to put away nearly as much money for retirement, with states such Mississippi and Oklahoma requiring less than $600,000 in savings to retire. However, the residents of the Northeastern states aren't so lucky -- they claimed five spots among the bottom 10 states for the cost of retirement. To ensure smooth sailing in your golden years, make sure you're using the right tools to save for retirement.
1. Mississippi
Annual cost of living: $39,633.31
Cost of living after using Social Security income: $20,268.07
How much you need in savings to retire: $506,702
2. Kansas
Annual cost of living: $41,155.84
Cost of living after using Social Security income: $21,790.60
How much you need in savings to retire: $544,765
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3 (tie). Alabama
Annual cost of living: $41,821.94
Cost of living after using Social Security income: $22,456.70
How much you need in savings to retire: $561,418
3 (tie). Oklahoma
Annual cost of living: $41,821.94
Cost of living after using Social Security income: $22,456.70
How much you need in savings to retire: $561,418
5. Georgia
Annual cost of living: $42,250.15
Cost of living after using Social Security income: $22,884.91
How much you need in savings to retire: $572,123
6. Tennessee
Annual cost of living: $42,345.31
Cost of living after using Social Security income: $22,980.07
How much you need in savings to retire: $574,502
7. Missouri
Annual cost of living: $42,725.94
Cost of living after using Social Security income: $23,360.70
How much you need in savings to retire: $584,018
8. Iowa
Annual cost of living: $42,773.52
Cost of living after using Social Security income: $23,408.28
How much you need in savings to retire: $585,207
9. West Virginia
Annual cost of living: $43,059.00
Cost of living after using Social Security income: $23,693.76
How much you need in savings to retire: $592,344
10. Indiana
Annual cost of living: $43,106.57
Cost of living after using Social Security income: $23,741.33
How much you need in savings to retire: $593,533
11. Arkansas
Annual cost of living: $43,249.31
Cost of living after using Social Security income: $23,884.07
How much you need in savings to retire: $597,102
12. New Mexico
Annual cost of living: $43,296.89
Cost of living after using Social Security income: $23,931.65
How much you need in savings to retire: $598,291
13 (tie). Michigan
Annual cost of living: $43,439.63
Cost of living after using Social Security income: $24,074.39
How much you need in savings to retire: $601,860
13 (tie). Ohio
Annual cost of living: $43,439.63
Cost of living after using Social Security income: $24,074.39
How much you need in savings to retire: $601,860
15. Texas
Annual cost of living: $43,820.26
Cost of living after using Social Security income: $24,455.02
How much you need in savings to retire: $611,375
16. Louisiana
Annual cost of living: $44,248.47
Cost of living after using Social Security income: $24,883.23
How much you need in savings to retire: $622,081
17. Kentucky
Annual cost of living: $44,296.05
Cost of living after using Social Security income: $24,930.81
How much you need in savings to retire: $623,270
18. South Carolina
Annual cost of living: $44,533.94
Cost of living after using Social Security income: $25,168.70
How much you need in savings to retire: $629,218
19. Nebraska
Annual cost of living: $44,581.52
Cost of living after using Social Security income: $25,216.28
How much you need in savings to retire: $630,407
20 (tie). Illinois
Annual cost of living: $44,867
Cost of living after using Social Security income: $25,501.76
How much you need in savings to retire: $637,544
20 (tie). Wyoming
Annual cost of living: $44,867
Cost of living after using Social Security income: $25,501.76
How much you need in savings to retire: $637,544
22. North Carolina
Annual cost of living: $45,533.10
Cost of living after using Social Security income: $26,167.86
How much you need in savings to retire: $654,197
23. Wisconsin
Annual cost of living: $45,866.16
Cost of living after using Social Security income: $26,500.92
How much you need in savings to retire: $662,523
24. North Dakota
Annual cost of living: $46,722.58
Cost of living after using Social Security income: $27,357.34
How much you need in savings to retire: $683,933
25. Utah
Annual cost of living: $47,103.21
Cost of living after using Social Security income: $27,737.97
How much you need in savings to retire: $693,449
26. Minnesota
Annual cost of living: $47,579
Cost of living after using Social Security income: $28,213.76
How much you need in savings to retire: $705,344
27. Florida
Annual cost of living: $47,721.74
Cost of living after using Social Security income: $28,356.50
How much you need in savings to retire: $708,912
28. Montana
Annual cost of living: $47,912.05
Cost of living after using Social Security income: $28,546.81
How much you need in savings to retire: $713,670
29. South Dakota
Annual cost of living: $48,054.79
Cost of living after using Social Security income: $28,689.55
How much you need in savings to retire: $717,239
30. Virginia
Annual cost of living: $48,435.42
Cost of living after using Social Security income: $29,070.18
How much you need in savings to retire: $726,755
31. Idaho
Annual cost of living: $48,578.16
Cost of living after using Social Security income: $29,212.92
How much you need in savings to retire: $730,323
32. Pennsylvania
Annual cost of living: $48,768.48
Cost of living after using Social Security income: $29,403.24
How much you need in savings to retire: $735,081
33. Arizona
Annual cost of living: $49,101.53
Cost of living after using Social Security income: $29,736.29
How much you need in savings to retire: $743,407
34. Colorado
Annual cost of living: $50,100.69
Cost of living after using Social Security income: $30,735.45
How much you need in savings to retire: $768,386
35. Nevada
Annual cost of living: $50,576.48
Cost of living after using Social Security income: $31,211.24
How much you need in savings to retire: $780,281
36. Delaware
Annual cost of living: $51,337.74
Cost of living after using Social Security income: $31,972.50
How much you need in savings to retire: $799,313
37. New Hampshire
Annual cost of living: $52,289.32
Cost of living after using Social Security income: $32,924.08
How much you need in savings to retire: $823,102
38. Washington
Annual cost of living: $53,098.16
Cost of living after using Social Security income: $33,732.92
How much you need in savings to retire: $843,323
39. Maine
Annual cost of living: $54,715.85
Cost of living after using Social Security income: $35,350.61
How much you need in savings to retire: $883,765
40. New Jersey
Annual cost of living: $54,811.01
Cost of living after using Social Security income: $35,445.77
How much you need in savings to retire: $886,144
41. Vermont
Annual cost of living: $55,667.43
Cost of living after using Social Security income: $36,302.19
How much you need in savings to retire: $907,555
42. Rhode Island
Annual cost of living: $55,762.59
Cost of living after using Social Security income: $36,397.35
How much you need in savings to retire: $909,934
43. Connecticut
Annual cost of living: $57,856.06
Cost of living after using Social Security income: $38,490.82
How much you need in savings to retire: $962,271
44. Maryland
Annual cost of living: $58,997.96
Cost of living after using Social Security income: $39,632.72
How much you need in savings to retire: $990,818
45. Alaska
Annual cost of living: $60,472.91
Cost of living after using Social Security income: $41,107.67
How much you need in savings to retire: $1,027,692
46. Oregon
Annual cost of living: $61,900.28
Cost of living after using Social Security income: $42,535.04
How much you need in savings to retire: $1,063,376
47. Massachusetts
Annual cost of living: $64,231.65
Cost of living after using Social Security income: $44,866.41
How much you need in savings to retire: $1,121,660
48. California
Annual cost of living: $67,657.34
Cost of living after using Social Security income: $48,292.10
How much you need in savings to retire: $1,207,302
49. New York
Annual cost of living: $70,512.08
Cost of living after using Social Security income: $51,146.84
How much you need in savings to retire: $1,278,671
50. Hawaii
Annual cost of living: $91,970.21
Cost of living after using Social Security income: $72,604.97
How much you need in savings to retire: $1,815,124
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Jami Farkas and Alexandria Bova contributed to the reporting for this article.
Methodology: to find out exactly how much you need to retire in your state, GOBankingRates found the annual cost of expenditures for a retired person in each state by multiplying the 65 year and older expenditures from the Bureau of Labor Statistics' 2020 Consumer Expenditure Survey by the cost of living index for each state from the Missouri Economic Research and Information Center's 2021 cost-of-living series. To find how much money a retired person would need to save, we divided each state's annual expenditures, minus the annual Social Security income as sourced from the Social Security Administration's Monthly Statistical Snapshot, January 2022, by .04, assuming drawing down savings by 4% each year to pay for living expenses. All data was collected and is up to date as of March 2, 2022.
This article originally appeared on GOBankingRates.com: Here’s Exactly How Much Savings You Need To Retire in Your State
