Where you live can change retirement needs by millions
Everyday living costs are one of the most decisive factors in determining how much money Americans need to retire comfortably. A new state-by-state analysis from personal finance website GOBankingRates shows that the estimated savings required to retire at age 65 can vary by as much as $1.46 million depending on location.
The findings highlight how sharply regional cost differences shape long-term financial planning, particularly for retirees living on fixed incomes.
Hawaii tops the list, Oklahoma the lowest
According to the analysis, Hawaii is the most expensive state for retirement. Retirees there are estimated to need roughly $2.2 million in savings to cover 25 years of essential expenses after retiring at 65. These costs include housing, groceries, transportation, utilities and health care.
At the opposite end of the spectrum, Oklahoma ranks as the most affordable state. Retirees there need an estimated $735,284 to cover the same category of basic expenses over a 25-year retirement period.
How the estimates were calculated
The analysis relies on average living costs for Americans aged 65 and older in each state, using the most recent data from the U.S. Bureau of Labor Statistics. From those annual expense totals, researchers subtracted average Social Security benefits.
The remaining amount was then used to estimate the total retirement savings required, assuming a 4% annual withdrawal rate. This approach is commonly used in retirement planning as a baseline for sustainable withdrawals.
What the figures do and do not include
The estimated savings totals are designed to cover only essential living expenses. Discretionary spending such as travel, dining, hobbies or entertainment is not included. The calculations also do not account for inflation, changes in lifestyle, long-term care needs or unexpected medical costs, all of which could significantly alter real-world retirement requirements.
As a result, the figures represent a minimum threshold rather than a comprehensive retirement target.
Housing dominates retirement cost differences
Housing costs are the single largest driver of variation between states. Annual housing expenses alone can differ by roughly $30,000 depending on location. Utilities and health-care costs also show meaningful differences, ranging by as much as $5,000 per year between states.
These disparities help explain why retirees in high-cost states face substantially higher savings requirements, even when accounting for Social Security income.
