The Annual Cost of Retiring in Every U.S. State
Key takeaways
- Hawaii is the most expensive state to retire comfortably in, requiring nearly $130K per year
- That’s more than double of the cheapest states, which include West Virginia ($58K annually) and Oklahoma ($60K annually)
Methodology
GOBankingRates analyzed the following expenditures of Americans aged 65 and older, based on data sourced from the Bureau of Labor Statistics’ (BLS) most recent Consumer Expenditure Survey release for the full year of 2023
(1) annual spending on groceries, defined as “food at home;”
(2) annual spending on housing, defined as “shelter;”
(3) annual spending on transportation, defined as “gasoline, other fuels and motor oil” AND “other vehicle expenses;”
(4) annual spending on healthcare;
(5) annual spending on utilities, defined as “utilities, fuels, and public services;” and
(6) overall average annual expenditures.
Spending estimates were adjusted to the state level by multiplying each cost category by its corresponding cost of living index score in each state, sourced from the Missouri Economic Research and Information Center’s 2024 Q2 cost of living index data.
After calculating total consumption expenditures, an additional (7) savings buffer was calculated by assuming that total expenditures consume 80% of ones budget (50% for necessities and 30% for discretionary spending), with 20% left over for savings.
GOBankingRates then combined factors (6) and (7) and factored it out by 20 (assuming 20 years of retirement) to give (8) retirement savings needed to live comfortably. All data was collected on and up to date as of Oct. 1, 2024.