Choosing where to live in retirement can be tough. How’s the health care system? Is it close enough to friends and family for regular visits? Is the weather nice? Are there lots of social activities for older residents?
These questions barely scratch the surface of the things to consider — it can be a lengthy list. But key among the considerations is cost of living. Just how far you can stretch your fixed income can have a significant impact on your quality of life and just how long you can afford to live the way you’d like to.
Of course, Social Security can help cover your living expenses, but do you know exactly when you’re eligible to take those benefits and how to maximize them? On top of that, are you clear on how the states you’re considering tax Social Security benefits? The answers to these questions can play a big role in which states are the most financially attractive for retirement.
Methodology
To put our list of the most expensive states for retirees together, we looked at data compiled by HowMuch.net, based on figures from the Bureau of Labor Statistics along with cost of living and life expectancy data.
The yearly figure needed for retirement comes from the BLS’ 2018 Consumer Expenditure Survey. The expenditures HowMuch considered were those of the age group “65 years or more”
To obtain the total amount required for a comfortable retirement, HowMuch used IHME-based life expectancy figures published by National Geographic. They then subtracted the average retirement year published on MoneyTalks to the previous figure and multiplied it by the state-adjusted yearly expenditures, to obtain the total amount required to retire.
We took that data and broke out the 22 states that had a cost of living above the national average. We also made a list of how much it costs to retire in every single state.
The most expensive states to retire in
According to the data, the average American retirement age is 64 and the average life expectancy is 78.6 years, meaning retirees need an average of $904,000 to cover their living expenses in retirement.
Here’s a look at the states that have the highest cost of living for retirees.
22. Virginia
Average retirement age: 65
Cost of living index: 1.01
Average annual expenses: $52,295
Life expectancy: 79.1
Retirement funds needed: $884,833
21. Arizona
Average retirement age: 63
Cost of living index: 1.01
Average annual expenses: $52,140
Life expectancy: 79.1
Retirement funds needed: $1.01 million
20. Minnesota
Average retirement age: 65
Cost of living index: 1.02
Average annual expenses: $52,605
Life expectancy: 80.7
Retirement funds needed: $991,075
19. Montana
Average retirement age: 64
Cost of living index: 1.05
Average annual expenses: $54,205
Life expectancy: 76.9
Retirement funds needed: $839,096
18. Colorado
Average retirement age: 65
Cost of living index: 1.06
Average annual expenses: $54,670
Life expectancy: 79.9
Retirement funds needed: $977,496
17. Delaware
Average retirement age: 63
Cost of living index: 1.07
Average annual expenses: $55,289
Life expectancy: 78.2
Retirement funds needed: $1.01 million
16. New Hampshire
Average retirement age: 65
Cost of living index: 1.08
Average annual expenses: $55,960
Life expectancy: 79.1
Retirement funds needed: $946,850
15. Nevada
Average retirement age: 63
Cost of living index: 1.09
Average annual expenses: $56,373
Life expectancy: 77.9
Retirement funds needed: $1.01 million
14. Washington
Average retirement age: 64
Cost of living index: 1.10
Average annual expenses: $56,890
Life expectancy: 79.9
Retirement funds needed: $1.08 million
13. Vermont
Average retirement age: 65
Cost of living index: 1.17
Average annual expenses: $60,348
Life expectancy: 79.9
Retirement funds needed: $1.08 million
12. Maine
Average retirement age: 63
Cost of living index: 1.17
Average annual expenses: $60,555
Life expectancy: 78
Retirement funds needed: $1.09 million
11. Rhode Island
Average retirement age: 65
Cost of living index: 1.21
Average annual expenses: $62,413
Life expectancy: 79.3
Retirement funds needed: $1.07 million
10. New Jersey
Average retirement age: 65
Cost of living index: 1.25
Average annual expenses: $64,736
Life expectancy: 80.5
Retirement funds needed: $1.20 million
9. Alaska
Average retirement age: 61
Cost of living index: 1.29
Average annual expenses: $66,956
Life expectancy: 77.7
Retirement funds needed: $1,341,805
8. Connecticut
Average retirement age: 65
Cost of living index: 1.29
Average annual expenses: $79,852
Life expectancy: 80
Retirement funds needed: $1.25 million
7. Maryland
Average retirement age: 65
Cost of living index: 1.30
Average annual expenses: $67,214
Life expectancy: 78.8
Retirement funds needed: $1.11 million
6. Oregon
Average retirement age: 63
Cost of living index: 1.33
Average annual expenses: $68,712
Life expectancy: 79.2
Retirement funds needed: $1.36 million
5. Massachusetts
Average retirement age: 66
Cost of living index: 1.34
Average annual expenses: $69,279
Life expectancy: 79.9
Retirement funds needed: $1.15 million
4. New York
Average retirement age: 64
Cost of living index: 1.35
Average annual expenses: $69,847
Life expectancy: 80.8
Retirement funds needed: $1.41 million
3. California
Average retirement age: 64
Cost of living index: 1.39
Average annual expenses: $86,171
Life expectancy: 80.9
Retirement funds needed: $1.45 million
2. Washington, D.C.
Average retirement age: 67
Cost of living index: 1.62
Average annual expenses: $83,683
Life expectancy: 77.1
Retirement funds needed: $1.01 million
1. Hawaii
Average retirement age: 66
Cost of living index: 1.92
Average annual expenses: $119,004
Life expectancy: 81.5
Retirement funds needed: $1.84 million