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You need to be a millionaire just to cover basic retirement costs in 15 US states, according to a new GOBankingRates analysis.
The states with the highest retirement expenses tend to also have the highest housing costs, whether they are big city centers like New York and California, or Hawaii, where the natural beauty and temperate climate attract numerous retirees.
In fact, Hawaii is the most expensive state to retire in. The cost of essentials (housing, food, transportation, utilities and health care) over 25 years amounts to approximately $2.21 million. That’s significantly more than Massachusetts and California, where retirees need about $1.6 million each to survive.
The estimates come from the latest average cost of living data from the U.S. Bureau of Labor Statistics. After subtracting average Social Security income from annual expenses, GOBankingRates divided the remaining amount by 4%, following a common rule of thumb to safely withdraw retirement savings.
The totals represent the minimum necessary 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 cost of living: $110,921
- Savings you need to retire: $2,212,084
2.Massachusetts
- Annual cost of living: $88,268
- Savings you need to retire: $1,645,764
3.California
- Annual cost of living: $86,946
- Savings you need to retire: $1,612,716
4.Alaska
- Annual cost of living: $74,147
- Savings you need to retire: $1,292,753
5. New York
- Annual cost of living: $74,147
- Savings you need to retire: $1,292,753
6. New Jersey
- Annual cost of living: $68,980
- Savings you need to retire: $1,163,566
7.Vermont
- Annual cost of living: $68,559
- Savings you need to retire: $1,153,051
8.Washington
- Annual cost of living: $68,259
- Savings you need to retire: $1,145,540
9. Maine
- Annual cost of living: $68,199
- Savings you need to retire: $1,144,038
10.Arizona
- Annual cost of living: $67,778
- Savings you need to retire: $1,133,522
11.Rhode Island
- Annual cost of living: $67,538
- Savings you need to retire: $1,127,514
12. Connecticut
- Annual cost of living: $67,117
- Savings you need to retire: $1,116,998
13. New Hampshire
- Annual cost of living: $66,997
- Savings you need to retire: $1,113,994
14. Oregon
- Annual cost of living: $66,096
- Savings you need to retire: $1,091,462
15.Utah
- Annual cost of living: $65,795
- Savings you need to retire: $1,083,951
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