Study reveals how much you need for retirement in each US state

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Americans of various age groups are currently grappling with affordability concerns, especially retirees on fixed incomes who are feeling the financial strain. The choice of where to live during retirement significantly impacts their ability to live comfortably.

A recent study conducted by MoneyLion delved into the monthly savings required to retire comfortably in different states, taking into account the national average expenses for retired households, Social Security income, and the age at which the retiree started saving for retirement.

According to the report, Hawaii emerged as the state with the highest annual cost of living for retirees, with an estimated annual cost of $90,752 for necessities and $181,505 for a comfortable cost of living. After factoring in Social Security income, the annual cost of living for a retiree in Hawaii was estimated to be $156,610.

To accumulate enough savings to afford this cost of living in retirement, an individual would need to save $5,800 a month over 45 years if they started saving at age 20 and retired at age 65. Alternatively, they would need to save $7,458 a month if they began saving at age 30, also with Social Security income included.

These figures increase to $6,722 and $8,643 a month, respectively, without factoring in Social Security benefits.

Following Hawaii, California had the second-highest annual cost of living for retirees, with MoneyLion estimating it at $73,387 for necessities and $121,879 for a comfortable cost of living including Social Security income. The monthly savings required in California would be $4,514 starting at age 20 or $5,804 starting at age 30, with Social Security benefits considered. Without Social Security, the savings targets would rise to $5,436 and $6,989 per month.

“Two of the biggest expenses a retiree needs to consider are state income taxes and real estate property taxes that will impact your budget. This is why many individuals are relocating from states like California and New York due to the high cost of living and taxation,” explained Ted Jenkin, managing partner at Exit Wealth Advisors, in an interview with FOX Business.

On the opposite end of the spectrum, the state with the lowest cost of living analyzed in the report was West Virginia, with an annual necessities cost of living of $29,059 and a comfortable cost of living of $58,117, or $33,223 after accounting for Social Security income. The monthly savings target in West Virginia would start at $1,230 for individuals aged 20 or $1,582 for those starting at age 30 with Social Security income. These targets would increase to $2,152 and $2,767, respectively, without Social Security.

Other states that have been popular choices for retirees to relocate to fell in the middle range of the analysis in terms of cost of living.

For instance, Florida’s annual necessities cost of living was calculated at $44,170, or $88,339 for a comfortable cost of living, which decreased to $63,445 when Social Security income was factored in. The required monthly savings in Florida were estimated to be $2,350 starting at age 20 or $3,021 starting at age 30, with Social Security benefits supplementing those savings.

Tennessee and Texas both had necessities cost of living slightly above $38,300, with the comfortable cost of living exceeding $76,000 or more than $51,300 with Social Security benefits included.

“There are significant reasons beyond just the weather for why retirees are moving away from high-tax states,” noted Thomas Aiello, National Taxpayers Union vice president of federal affairs, in an interview with FOX Business. “States like Florida, Texas, and Tennessee offer advantages such as no state income tax, no estate (‘death’) tax, relatively low property taxes, and a more taxpayer-friendly policy environment. This can result in substantial annual tax savings compared to states like New York, California, or Illinois.”