The average American's lack of savings paints a fairly discouraging picture of retirement. A 2019 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.
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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 $700,000 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 like Mississippi and Oklahoma requiring less than $700,000 in savings to retire. However, the Northeastern states aren't so lucky -- they claimed seven 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.
Last updated: Jan. 14, 2021
1. Mississippi
- Annual cost of living: $42,976.70
- Cost of living after using Social Security income: $26,670.86
- How much you need in savings to retire: $666,772
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2. Oklahoma
- Annual cost of living: $43,790.46
- Cost of living after using Social Security income: $27,484.62
- How much you need in savings to retire: $687,116
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3. Arkansas
- Annual cost of living: $44,197.34
- Cost of living after using Social Security income: $27,891.50
- How much you need in savings to retire: $697,288
4. Kansas
- Annual cost of living: $44,451.64
- Cost of living after using Social Security income: $28,145.80
- How much you need in savings to retire: $703,645
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5. Tennessee
- Annual cost of living: $44,604.22
- Cost of living after using Social Security income: $28,298.38
- How much you need in savings to retire: $707,460
6. New Mexico
- Annual cost of living: $45,112.82
- Cost of living after using Social Security income: $28,806.98
- How much you need in savings to retire: $720,175
7. Alabama
- Annual cost of living: $45,265.40
- Cost of living after using Social Security income: $28,959.56
- How much you need in savings to retire: $723,989
8. Missouri
- Annual cost of living: $45,316.26
- Cost of living after using Social Security income: $29,010.42
- How much you need in savings to retire: $725,261
9. Michigan
- Annual cost of living: $45,621.42
- Cost of living after using Social Security income: $29,315.58
- How much you need in savings to retire: $732,890
10. Georgia
- Annual cost of living: $45,824.86
- Cost of living after using Social Security income: $29,519.02
- How much you need in savings to retire: $737,976
11. Indiana
- Annual cost of living: $46,130.02
- Cost of living after using Social Security income: $29,824.18
- How much you need in savings to retire: $745,605
12. West Virginia
- Annual cost of living: $46,486.04
- Cost of living after using Social Security income: $30,180.20
- How much you need in savings to retire: $754,505
13. Nebraska
- Annual cost of living: $46,638.62
- Cost of living after using Social Security income: $30,332.78
- How much you need in savings to retire: $758,320
14. Texas
- Annual cost of living: $46,791.20
- Cost of living after using Social Security income: $30,485.36
- How much you need in savings to retire: $762,134
15. Iowa
- Annual cost of living: $46,994.64
- Cost of living after using Social Security income: $30,688.80
- How much you need in savings to retire: $767,220
16. Ohio
- Annual cost of living: $47,198.08
- Cost of living after using Social Security income: $30,892.24
- How much you need in savings to retire: $772,306
17. Louisiana
- Annual cost of living: $47,248.94
- Cost of living after using Social Security income: $30,943.10
- How much you need in savings to retire: $773,578
18. Kentucky
- Annual cost of living: $47,299.80
- Cost of living after using Social Security income: $30,993.96
- How much you need in savings to retire: $774,849
19. Idaho
- Annual cost of living: $48,215.28
- Cost of living after using Social Security income: $31,909.44
- How much you need in savings to retire: $797,736
20. North Carolina
- Annual cost of living: $48,215.28
- Cost of living after using Social Security income: $31,909.44
- How much you need in savings to retire: $797,736
21. South Carolina
- Annual cost of living: $48,367.86
- Cost of living after using Social Security income: $32,062.02
- How much you need in savings to retire: $801,551
22. Illinois
- Annual cost of living: $48,469.58
- Cost of living after using Social Security income: $32,163.74
- How much you need in savings to retire: $804,094
23. Wisconsin
- Annual cost of living: $48,774.74
- Cost of living after using Social Security income: $32,468.90
- How much you need in savings to retire: $811,723
24. Utah
- Annual cost of living: $48,927.32
- Cost of living after using Social Security income: $32,621.48
- How much you need in savings to retire: $815,537
25. South Dakota
- Annual cost of living: $49,079.90
- Cost of living after using Social Security income: $32,774.06
- How much you need in savings to retire: $819,352
26. North Dakota
- Annual cost of living: $49,130.76
- Cost of living after using Social Security income: $32,824.92
- How much you need in savings to retire: $820,623
27. Florida
- Annual cost of living: $50,046.24
- Cost of living after using Social Security income: $33,740.40
- How much you need in savings to retire: $843,510
28. Arizona
- Annual cost of living: $50,809.14
- Cost of living after using Social Security income: $34,503.30
- How much you need in savings to retire: $862,583
29. Minnesota
- Annual cost of living: $51,165.16
- Cost of living after using Social Security income: $34,859.32
- How much you need in savings to retire: $871,483
30. Pennsylvania
- Annual cost of living: $51,266.88
- Cost of living after using Social Security income: $34,961.04
- How much you need in savings to retire: $874,026
31. Virginia
- Annual cost of living: $51,724.62
- Cost of living after using Social Security income: $35,418.78
- How much you need in savings to retire: $885,470
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32. Wyoming
- Annual cost of living: $51,877.20
- Cost of living after using Social Security income: $35,571.36
- How much you need in savings to retire: $889,284
33. Nevada
- Annual cost of living: $52,284.08
- Cost of living after using Social Security income: $35,978.24
- How much you need in savings to retire: $899,456
34. Colorado
- Annual cost of living: $52,640.10
- Cost of living after using Social Security income: $36,334.26
- How much you need in savings to retire: $908,357
35. New Hampshire
- Annual cost of living: $54,572.78
- Cost of living after using Social Security income: $38,266.94
- How much you need in savings to retire: $956,674
36. Delaware
- Annual cost of living: $54,725.36
- Cost of living after using Social Security income: $38,419.52
- How much you need in savings to retire: $960,488
37. Montana
- Annual cost of living: $54,827.08
- Cost of living after using Social Security income: $38,521.24
- How much you need in savings to retire: $963,031
38. Washington
- Annual cost of living: $56,454.60
- Cost of living after using Social Security income: $40,148.76
- How much you need in savings to retire: $1,003,719
39. Vermont
- Annual cost of living: $58,743.30
- Cost of living after using Social Security income: $42,437.46
- How much you need in savings to retire: $1,060,937
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40. Maine
- Annual cost of living: $59,658.78
- Cost of living after using Social Security income: $43,352.94
- How much you need in savings to retire: $1,083,824
41. Rhode Island
- Annual cost of living: $60,269.10
- Cost of living after using Social Security income: $43,963.26
- How much you need in savings to retire: $1,099,082
42. New Jersey
- Annual cost of living: $63,269.84
- Cost of living after using Social Security income: $46,964.00
- How much you need in savings to retire: $1,174,100
43. Connecticut
- Annual cost of living: $63,676.72
- Cost of living after using Social Security income: $47,370.88
- How much you need in savings to retire: $1,184,272
44. Alaska
- Annual cost of living: $64,846.50
- Cost of living after using Social Security income: $48,540.66
- How much you need in savings to retire: $1,213,517
45. Maryland
- Annual cost of living: $65,863.70
- Cost of living after using Social Security income: $49,557.86
- How much you need in savings to retire: $1,238,947
46. Massachusetts
- Annual cost of living: $66,270.58
- Cost of living after using Social Security income: $49,964.74
- How much you need in savings to retire: $1,249,119
47. New York
- Annual cost of living: $68,661.00
- Cost of living after using Social Security income: $52,355.16
- How much you need in savings to retire: $1,308,879
48. Oregon
- Annual cost of living: $69,678.20
- Cost of living after using Social Security income: $53,372.36
- How much you need in savings to retire: $1,334,309
49. California
- Annual cost of living: $71,102.28
- Cost of living after using Social Security income: $54,796.44
- How much you need in savings to retire: $1,369,911
50. Hawaii
- Annual cost of living: $102,381.18
- Cost of living after using Social Security income: $86,075.34
- How much you need in savings to retire: $2,151,884
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Methodology: To determine 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-and-older expenditures from the Bureau of Labor Statistics' 2018 Consumer Expenditure Survey by the cost-of-living index for each state from the Missouri Economic Research and Information Center's cost-of-living series for the third quarter of 2019. GOBankingRates divided each state’s annual expenditures -- minus the annual Social Security income, as sourced from the Social Security Administration's Monthly Statistical Snapshot of November 2019 -- by 0.04, assuming that a retired person would draw down their savings by 4% each year to pay for living expenses. All data used to conduct this study was compiled and verified on Dec. 13, 2019.