You've Been Warned: Retiring In This State Could Cost You

Planning for retirement today can be overwhelming. Between how much Americans think they need to retire comfortably to considerations over when, exactly, you should start collecting Social Security benefits, there's a lot to consider. According to a 2024 Financial Security Trends survey from AARP, only 36% of the respondents reported expecting to have enough money in retirement to be financially secure (while 33% said that they wouldn't have enough money). To add to this, the survey found that 20% of respondents over the age of 50 had no retirement savings at all.

While saving for your retirement can be difficult, especially in the face of inflation and increasing prices, there are things you can consider ahead of time to better prepare you for your lifestyle after retirement. Perhaps one of the biggest considerations you should factor in is where you will live. While you might have originally planned on staying in whatever state you worked in, housing and cost-of-living increases could make it worth considering a move.

According to a GOBankingRates analysis of data from the Social Security Administration, the Bureau of Labor Statistics, and the Missouri Economic Research and Information Center, retirees would need at least $1 million (or more) to retire in 16 different states across the U.S. From your average annual expenditure to the cost-of-living index, where you choose to retire can have serious financial ramifications for your retirement lifestyle. Let's dive into some of the most financially difficult places to retire in.

While New York isn't technically the most expensive state to retire in (that honor belongs to Hawaii), it's still one of the top-five most expensive states to consider for retirement. This is largely due to the annual anticipated retirement expenditures in New York: $73,140. Not only is this annual expenditure more than the average annual salary of the U.S. (which is $59,428, according to Forbes), but it is almost as much as the annual salary in New York state in 2024 ($74,870). Now, if you crunch the numbers long term, this means the minimum amount you would need for a 25-year retirement would be close to $1.3 million, while a 30-year retirement would need more than $1.5 million (at least).

One significant reason for New York's high retirement savings requirements is its cost of living. According to GOBankingRates, the average annual housing cost in New York state is $20,694.84. Meanwhile the average annual cost of utilities is $4,363.08, while the average cost of groceries is $4,993.68. This doesn't even factor in other high-price categories like health care, which can be especially important among retirees (the average annual cost of which amounts to $8,174). While Social Security benefits (and annual cost-of-living adjustments, which Social Security officially announced as 2.5% for 2025) can help to mitigate some of these expenses, it still leaves a heavy financial burden on retirees who might choose to live in New York.

While some states might seem like beautiful or convenient retirement options, it's important to remember that New York isn't alone in being a financially difficult choice. The other states in the top five that require the most retirement savings include Hawaii, Massachusetts, California, and Alaska. While all of these states require over $1 million in retirement savings in order to live comfortably, Hawaii is the only one that requires over $2 million. In fact, according to GOBankingRates data, you should plan on having at least $2 million for a 25-year retirement, but almost $2.5 million if you're planning on a 30-year retirement. However, out of all of the states, Alaska has the highest annual grocery costs, utilities, and health care expenses.

On the flip side, GOBankingRate's analysis suggests the most affordable states to retire in are West Virginia, Mississippi, and Oklahoma. However, when looking only at affordability (per the Missouri Economic Research and Information Center's cost-of-living index for the second quarter of 2024), West Virginia (84.3), Oklahoma (85.3), and Kansas (87.0) topped the list. To further complicate the debate, Seniorly's 2023 state survey, which also looked at tax-friendliness, senior poverty rates, and Medicare spending in addition to cost-of-living considerations, came up with a decidedly different list for the country's most affordable states for retirement.

According to Seniorly, the top-three most affordable states to retire in were Wyoming, Utah, and Montana. With this said, it's worth mentioning that while different lists might have different ideas on the best options for retirees, they all agreed that Hawaii, Alaska, New York, Massachusetts, and California were among the least affordable states.