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 64% are expected to retire with less than $10,000 in 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 have also thrown some people's futures into question, for those who had to draw from retirement savings during job loss or furlough.
See: 42 Easy Ways To Save For Retirement
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.
Read: Jaw-Dropping Stats About the State of Retirement in America
Find Out: The Average Retirement Age in Every State
GOBankingRates found that residents of many Southeastern and Southwestern states won't have to put away nearly as much money for retirement, with states like Mississippi and Oklahoma requiring less than $600,000 in savings to retire. However, the Northeastern states aren't so lucky -- they claimed six spots among the bottom 10 states. 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: $40,489.73
Cost of living after using Social Security income: $22,312.85
How much you need in savings to retire: $557,821
Take Action: Do These 13 Things To Boost Your Retirement Savings Now
2. Kansas
Annual cost of living: $41,346.15
Cost of living after using Social Security income: $23,169.27
How much you need in savings to retire: $579,232
Are High-Yield Savings Accounts Worth It? Here's Everything You Need To Know
3. Oklahoma
Annual cost of living: $41,964.68
Cost of living after using Social Security income: $23,787.80
How much you need in savings to retire: $594,695
Check Out: How Long $1 Million in Savings Will Last in Every State
4. Alabama
Annual cost of living: $42,154.99
Cost of living after using Social Security income: $23,978.11
How much you need in savings to retire: $599,453
5. Georgia
Annual cost of living: $42,725.94
Cost of living after using Social Security income: $24,549.06
How much you need in savings to retire: $613,727
6. Tennessee
Annual cost of living: $42,821.10
Cost of living after using Social Security income: $24,644.22
How much you need in savings to retire: $616,106
7. West Virginia
Annual cost of living: $42,868.68
Cost of living after using Social Security income: $24,691.80
How much you need in savings to retire: $617,295
8. Iowa
Annual cost of living: $42,963.84
Cost of living after using Social Security income: $24,786.96
How much you need in savings to retire: $619,674
9. Illinois
Annual cost of living: $43,059
Cost of living after using Social Security income: $24,882.12
How much you need in savings to retire: $622,053
10. New Mexico
Annual cost of living: $43,106.57
Cost of living after using Social Security income: $24,929.69
How much you need in savings to retire: $623,242
11. Indiana
Annual cost of living: $43,344.47
Cost of living after using Social Security income: $25,167.59
How much you need in savings to retire: $629,190
12. Missouri
Annual cost of living: $43,392.05
Cost of living after using Social Security income: $25,215.17
How much you need in savings to retire: $630,379
13. Michigan
Annual cost of living: $43,487.21
Cost of living after using Social Security income: $25,310.33
How much you need in savings to retire: $632,758
14. Arkansas
Annual cost of living: $43,820.26
Cost of living after using Social Security income: $25,643.38
How much you need in savings to retire: $641,084
See: 30 Greatest Threats to Your Retirement
15. Texas
Annual cost of living: $44,058.15
Cost of living after using Social Security income: $25,881.27
How much you need in savings to retire: $647,032
Learn: What Is a Savings Bond and How Does It Work?
16. Louisiana
Annual cost of living: $44,153.31
Cost of living after using Social Security income: $25,976.43
How much you need in savings to retire: $649,411
17. Ohio
Annual cost of living: $44,200.89
Cost of living after using Social Security income: $26,024.01
How much you need in savings to retire: $650,600
18. Nebraska
Annual cost of living: $44,533.94
Cost of living after using Social Security income: $26,357.06
How much you need in savings to retire: $658,927
19. Wyoming
Annual cost of living: $44,533.94
Cost of living after using Social Security income: $26,357.06
How much you need in savings to retire: $658,927
Helpful: How To Protect Your Retirement Savings During the Coronavirus Pandemic
20. Kentucky
Annual cost of living: $44,676.68
Cost of living after using Social Security income: $26,499.80
How much you need in savings to retire: $662,495
21. South Carolina
Annual cost of living: $45,104.89
Cost of living after using Social Security income: $26,928.01
How much you need in savings to retire: $673,200
22. Wisconsin
Annual cost of living: $45,437.95
Cost of living after using Social Security income: $27,261.07
How much you need in savings to retire: $681,527
23. South Dakota
Annual cost of living: $45,771
Cost of living after using Social Security income: $27,594.12
How much you need in savings to retire: $689,853
24. North Carolina
Annual cost of living: $45,866.16
Cost of living after using Social Security income: $27,689.28
How much you need in savings to retire: $692,232
25. Idaho
Annual cost of living: $46,199.21
Cost of living after using Social Security income: $28,022.33
How much you need in savings to retire: $700,558
26. North Dakota
Annual cost of living: $46,532.26
Cost of living after using Social Security income: $28,355.38
How much you need in savings to retire: $708,885
27. Florida
Annual cost of living: $46,675
Cost of living after using Social Security income: $28,498.12
How much you need in savings to retire: $712,453
See: The Cost To Retire in America's Sunniest Cities
28. Minnesota
Annual cost of living: $47,388.68
Cost of living after using Social Security income: $29,211.80
How much you need in savings to retire: $730,295
29. Pennsylvania
Annual cost of living: $47,816.90
Cost of living after using Social Security income: $29,640.02
How much you need in savings to retire: $741,000
30. Montana
Annual cost of living: $47,959.63
Cost of living after using Social Security income: $29,782.75
How much you need in savings to retire: $744,569
31. Virginia
Annual cost of living: $48,292.69
Cost of living after using Social Security income: $30,115.81
How much you need in savings to retire: $752,895
What's the Difference? Money Market Accounts vs. Savings Accounts
32. Utah
Annual cost of living: $48,292.69
Cost of living after using Social Security income: $30,115.81
How much you need in savings to retire: $752,895
33. Nevada
Annual cost of living: $49,149.11
Cost of living after using Social Security income: $30,972.23
How much you need in savings to retire: $774,306
34. Colorado
Annual cost of living: $50,338.58
Cost of living after using Social Security income: $32,161.70
How much you need in savings to retire: $804,043
35. Delaware
Annual cost of living: $50,719.21
Cost of living after using Social Security income: $32,542.33
How much you need in savings to retire: $813,558
36. Arizona
Annual cost of living: $50,909.53
Cost of living after using Social Security income: $32,732.65
How much you need in savings to retire: $818,316
37. Maine
Annual cost of living: $52,765.11
Cost of living after using Social Security income: $34,588.23
How much you need in savings to retire: $864,706
38. New Hampshire
Annual cost of living: $53,573.95
Cost of living after using Social Security income: $35,397.07
How much you need in savings to retire: $884,927
39. Washington
Annual cost of living: $53,669.11
Cost of living after using Social Security income: $35,492.23
How much you need in savings to retire: $887,306
40. Vermont
Annual cost of living: $54,620.69
Cost of living after using Social Security income: $36,443.81
How much you need in savings to retire: $911,095
Don't Miss: Best Online Savings Accounts for Earning High-Yield Profits
41. Rhode Island
Annual cost of living: $55,096.48
Cost of living after using Social Security income: $36,919.60
How much you need in savings to retire: $922,990
42. New Jersey
Annual cost of living: $56,285.96
Cost of living after using Social Security income: $38,109.08
How much you need in savings to retire: $952,727
43. Connecticut
Annual cost of living: $56,856.91
Cost of living after using Social Security income: $38,680.03
How much you need in savings to retire: $967,001
44. Maryland
Annual cost of living: $57,760.91
Cost of living after using Social Security income: $39,584.03
How much you need in savings to retire: $989,601
45. Alaska
Annual cost of living: $59,806.80
Cost of living after using Social Security income: $41,629.92
How much you need in savings to retire: $1,040,748
Options: Most Tax-Friendly States To Retire
46. Oregon
Annual cost of living: $60,663.23
Cost of living after using Social Security income: $42,486.35
How much you need in savings to retire: $1,062,159
47. Massachusetts
Annual cost of living: $63,042.18
Cost of living after using Social Security income: $44,865.30
How much you need in savings to retire: $1,121,632
48. New York
Annual cost of living: $68,371.02
Cost of living after using Social Security income: $50,194.14
How much you need in savings to retire: $1,254,854
49. California
Annual cost of living: $69,893.55
Cost of living after using Social Security income: $51,716.67
How much you need in savings to retire: $1,292,917
50. Hawaii
Annual cost of living: $88,306.62
Cost of living after using Social Security income: $70,129.74
How much you need in savings to retire: $1,753,244
More From GOBankingRates
Alexandria Bova contributed to the reporting for this article.
Methodology: In order 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 3rd quarter 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, September 2021, 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 Nov. 8, 2021.
This article originally appeared on GOBankingRates.com: Here’s Exactly How Much Savings You Need To Retire In Your State
