Retirement is becoming more expensive than ever. A new analysis by GOBankingRates reveals that 23 states now require at least $1 million in savings for a "comfortable" retirement. According to WealthManagement, the study evaluates the monthly savings needed to achieve this goal, based on whether individuals begin saving at age 20 or 30.
The analysis assumes a retirement age of 65 and a life expectancy of 85, requiring savings to last 20 years. Using a 50/30/20 budgeting rule- which allocates essential expenses to 50 percent of household income- the study calculates retirement costs by doubling each state's cost-of-living figure. The data incorporates essential factors such as groceries, healthcare, housing, utilities, transportation, and other living expenses, drawing on information from the Bureau of Labor Statistics and the Missouri Economic and Research Information Center.
Hawaii tops the list as the most expensive state for retirement, requiring over $3 million in savings for 20 years of comfortable living. California and Massachusetts follow closely, rounding out the top three. The study also highlights how starting to save earlier can significantly reduce the financial burden. For instance, starting at age 20 can lower the monthly savings burden by as much as $3,000 compared to starting at age 30.
Here are the 23 states with the highest retirement costs:
- Hawaii
- California
- Massachusetts
- Washington
- New Jersey
- Colorado
- New Hampshire
- Utah
- Oregon
- Rhode Island
- Alaska
- New York
- Connecticut
- Montana
- Idaho
- Nevada
- Maryland
- Arizona
- Maine
- Vermont
- Florida
- Virginia
- Delaware
These findings underscore the importance of starting retirement savings as early as possible to navigate rising costs and ensure long-term financial security.
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