You must be a millionaire if only yes cover basic pension costs in 15 US states, according to a new GOBankingRates analysis.
The states with the highest retirement expenditures also tend to have the highest housing costs, whether they are big city centers like New York and California or Hawaii, where natural beauty and mild climates attract many retirees.
In fact, Hawaii is the most expensive state to retire. The cost of basic necessities—housing, groceries, transportation, utilities, and health care—is approximately $2.21 million over 25 years. That’s significantly more than in Massachusetts and California, where retirees need about $1.6 million to survive.
The estimates come from the latest data on the average cost of living from the US Bureau of Labor Statistics. After subtracting the average Social Security income from the annual expenses, GOBankingRates divided the remaining amount by 4%, following the usual rule for safe withdrawal of pension savings.
The total amounts represent the minimum required to retire without taking into account other factors such as rising inflation, discretionary spending or unexpected expenses.
Here’s a look at the 15 most expensive states to retire in, ranked by total savings needed:
1. Hawaii
- Annual living expenses: 110,921 dollars
- Savings you need for retirement: 2,212,084 dollars
2. Massachusetts
- Annual living expenses: 88,268 dollars
- Savings you need for retirement: $1,645,764
3. California
- Annual living expenses: 86,946 dollars
- Savings you need for retirement: 1,612,716 dollars
4. Alaska
- Annual living expenses: 74,147 dollars
- Savings you need for retirement: 1,292,753 dollars
5. New York
- Annual living expenses: 74,147 dollars
- Savings you need for retirement: 1,292,753 dollars
6. New Jersey
- Annual living expenses: 68,980 dollars
- Savings you need for retirement: 1,163,566 dollars
7. Vermont
- Annual living expenses: 68,559 dollars
- Savings you need for retirement: $1,153,051
8. Washington
- Annual living expenses: 68,259 dollars
- Savings you need for retirement: $1,145,540
9. Maine
- Annual living expenses: 68,199 dollars
- Savings you need for retirement: 1,144,038 dollars
10. Arizona
- Annual living expenses: 67,778 dollars
- Savings you need for retirement: $1,133,522
11. Rhode Island
- Annual living expenses: 67,538 dollars
- Savings you need for retirement: 1,127,514 dollars
12. Connecticut
- Annual living expenses: 67,117 dollars
- Savings you need for retirement: $1,116,998
13. New Hampshire
- Annual living expenses: 66,997 dollars
- Savings you need for retirement: $1,113,994
14. Oregon
- Annual living expenses: 66,096 dollars
- Savings you need for retirement: 1,091,462 dollars
15. Utah
- Annual living expenses: $65,795
- Savings you need for retirement: 1,083,951 dollars
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