3 States Where You’ll Need $100K per Year To Retire Comfortably

DenisTangneyJr / Getty Images

Commitment to Our Readers

GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.

20 Years
Helping You Live Richer

Reviewed
by Experts

Trusted by
Millions of Readers

Retirees with five-figure annual budgets have 47 states to choose from, but three require at least $100,000 to retire comfortably.  

A GOBankingRates analysis used data from the Bureau of Labor Statistics (BLS) and the Missouri Economic Research and Information Center to determine how much the typical retiree would need to cover all the basic needs in America’s three most expensive states — but who wants to live just to pay the bills? To gauge the cost of a comfortable retirement, the study included a 20% savings buffer.

GOBankingRates then used Forbes data to explain why the three six-figure states cost as much as they do. Readers will notice that the total expenditures, which come from the GOBankingRates study, are higher than the living costs cited by Forbes. That’s because the GOBankingRates figures factor in more spending categories and a 30% buffer for discretionary spending. 

Here’s a look at the trio of states that require six-figure annual spending to retire comfortably, and why they cost so much. 

Massachusetts

• Total expenditures: $83,501
• 20% comfort buffer: $16,700
• Cost of a comfortable retirement annually: $100,201

According to Forbes, Massachusetts has the No. 2 highest cost of living in America at $53,860 per year. The good news is that the state also boasts the country’s highest average salary — $80,330, to be exact. For context, BLS data puts the average salary nationwide at $62,026.

However, even that isn’t enough to mitigate the high price of living in the Bay State. Despite earning more than any other population in the country, Massachusetts residents drop to No. 5 in disposable income after all the bills are paid — and the bills are steep. The state has the No. 3 highest mortgage payments, No. 4 highest rents, No. 3 highest healthcare costs and No. 3 highest income taxes. 

California

• Total expenditures: $83,906
• 20% comfort buffer: $16,781
• Cost of a comfortable retirement annually: $100,687

Notoriously expensive California is even pricier for retirees than Massachusetts. According to Forbes, it has the No. 4 highest average annual pay in America — $76,960 — but like Massachusetts, it isn’t enough to offset the high price of daily life in the Golden State. Its average annual living cost of $53,171 is America’s No. 3 highest, and after Californians cover those costs, they fall down to No. 12 in terms of disposable income. The state has the No. 2 highest mortgage and rent payments and the No. 3 highest food costs.

Hawaii

• Total expenditures: $107,746
• 20% comfort buffer: $21,549
• Cost of a comfortable retirement annually: $129,296

With an annual average living cost that Forbes cites as $53,860, Hawaii is the most expensive state in America — and nowhere in the country is the cost-to-income gap wider. Its average salary of $65,041 ranks only at No. 17 — and when middling wages collide with sky-high expenses, the result is predictable. 

Hawaii residents have less disposable income than residents of any other state in America — just $9,551 is left over once all the bills are paid — and it’s not hard to understand why. Transportation costs are the highest in the country by far, likewise for home prices, mortgage payments and rental costs. Food costs are slightly higher in No. 1 Alaska, but not by much, and no one pays higher income taxes than residents of Hawaii.

Share This Article: