If You Dream of an Affordable Retirement, Avoid These 10 States

Despite some setbacks in the wake of the COVID-19 pandemic, life expectancy at birth has been steadily climbing in recent decades in the United States. Between 1970 and 2019, average life expectancy increased from just under 71 years to nearly 79 years. While a commendable public health accomplishment, these improvements have meaningful implications for America’s ever-growing retired population.

24/7 Wall St. Key Points:

• Most workers in the U.S. aspire to one day retire with a degree of financial security — but a growing number of Americans are not optimistic about their prospects.
• Growing concerns over the cost of retirement are well founded, as an average American can expect to spend over $1 million after exiting the workforce.
• Also: Retiring early is possible, and may be easier than you think. Click here now to see if you’re ahead, or behind. ^(Sponsor)

As adults are living longer, the costs associated with retiring out of the workforce are going up — and older Americans are feeling the squeeze. A recent AARP survey found that about 61% of the 50 and older population are worried they do not have enough money to retire. These concerns are not unfounded – particularly for the 20% of older Americans with no savings — as a typical American who leaves the workforce at age 65 can expect to spend about $1.4 million over the course of their retirement.

Of course, this amount is only an estimate based on the average annual spending of retirement-age Americans and average life expectancy. However, due to variations in the overall cost of living, as well as life expectancy at age 65, there are some parts of the country where a typical retirement may cost hundreds of thousands of dollars less — and others still where retirement expenditures can be expected to total nearly $1.8 million.

Using the latest data from the Bureau of Labor Statistics, the Bureau of Economic Analysis, and the National Center for Health Statistics, 24/7 Wall St. calculated the estimated average expenditures throughout retirement in each state.

According to the BLS Consumer Expenditure Survey, the average American in the 65 and older age group spent $60,087 in 2023. Adjusting for the cost of living, as reported by the BEA, this figure varies from about $52,000 to $67,600, depending on the state. If, going forward, inflation tracks with the Federal Reserve’s 2% target rate, this amount will go up annually — and in some states, the average 65 year old will live another 16 years, and in others, nearly 20 years, according to the Centers for Disease Control and Prevention. (Here is a look at the states with the most retirement-friendly tax policies.)

Based on these factors, estimated retirement spending in the U.S. ranges by as much as $731,900 across the 50 states. Of course, these calculations are based on averages, and for those seeking greater economic security in their golden years, we also included estimated retirement spending with a 15% financial cushion. With this 15% buffer, estimated retirement spending ranges from $1.2 million to more than $2 million, depending on the state. (Here is a look at what is most important for a happy retirement.)

This is how much it costs to retire in every state.

Why It Matters

Based on spending patterns and estimated life expectancy, a typical American can expect to spend over $1 million after age 65. While retirees do not need to have that amount in savings — as Social Security payments can ease the financial burden of retirement — government benefits alone are not enough for a comfortable and financially secure retirement. Notably, retirement costs are not equal across the country, and older Americans on tighter budgets can significantly reduce expenses in retirement by residing in states with a low cost of living.

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