How Much It Costs to Retire in Every State
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Many Americans work their entire lives with an eye on the retirement finish line, but what happens when it’s crossed? Deciding on a dream destination for the golden years should factor in that locale’s price tag, which can vary drastically.
MagnifyMoney researchers looked at the price to retire in every U.S. state, including costs for housing, food, transportation, Medicare Part B and Part C, entertainment, and personal care. Researchers found Hawaii is the most expensive state to spend your retirement years, while Arkansas is the least expensive state.
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How older Americans spend their money
In general, people tend to spend less money as they get older. Peak spending years generally occur between ages 45 and 54 and decrease by 35% when people reach the 65-and-older range. Those 75 and older spend even less, with average spending that’s 44% lower than during those peak years.
As for what older Americans spend their money on, health care is a priority. In fact, those 65 and older spend 32% more annually, on average, on health care than all Americans.
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5 helpful retirement strategies
To help ensure your retirement dreams match up with your retirement reality, planning is vital. Whether you hire a financial advisor to help you map out a course or do the work on your own, it’s important to evaluate and use the tools that can help you plan for your best financial future.
1. Start saving early
One of the biggest mistakes people make is not starting saving and investing for retirement early enough. Ideally, people should start as soon as they enter the working world, even if the amount they start investing is small. That’s because they have the power of compound interest on their side and can take advantage of that.
“The best time to start saving for retirement is now,” says Ismat Mangla, senior director of content for MagnifyMoney. “If you haven’t started yet, don’t wait to start putting money away — even if it’s a small amount. It’s important to get into the habit, and you want time on your side. You’re not just saving for retirement, you are investing for retirement. Simply socking money away is not enough. You need to invest that money strategically for it to grow.”
2. Take advantage of employer-sponsored plans
Mangla urges people to take advantage of employer-sponsored plans, such as 401(k) accounts, which are tax-advantaged retirement accounts that allow employees to make contributions.
“Many 401(k) plans offer employer matching, which is a big part of your compensation,” she says. “Too many people don’t contribute enough money to their 401(k) accounts to at least earn the employer match, which means they are forfeiting a part of their income.”
3. Consider an individual retirement account (IRA)
If your employer doesn’t offer a retirement plan or you’ve maxed out your contributions to one, you may want to consider opening an IRA. While there are several types with various limits and rules, they offer a way to save for retirement with tax benefits.
“I especially like Roth IRAs because they offer a way to diversify your income in retirement,” Mangla says. “You’re putting after-tax money in a Roth IRA, but when you eventually withdraw the money in retirement, you won’t have to pay any taxes on it.”
4. Keep it simple
It may make sense to get help from a certified financial planner or financial advisor who can help you figure out the asset allocation you need to reach your goals. But there’s no need to over-complicate investing.
“I encourage investors to focus on low-fee index funds for their investments,” Mangla says. “There is a ton of research that shows these funds fare better in the long run than actively managed funds.
“I like a set-it-and-forget mentality. You don’t need to tinker too much with your retirement investments once you’ve allocated them properly. And don’t pay attention to the short-term ups and downs of the market. Keep your eye on the long game.”
5. Automate investments
Whether directly from your paycheck into an employer-sponsored plan or from your bank account into an online brokerage account, making automatic contributions to retirement savings can be a good way to ensure they get made. Instead of forgetting to make them or using those funds for something else (“Just this once!”), it’s a great way to keep you on track to meet your goals.
Reasons To Use Stash For Investing
- Get $5 to Make Your First Investment
- Invest in Stocks and ETFs with $1 or Less
- Receive Your Paycheck up to 2 Days Faster
- No Overdraft Fees or Minimum Balances
Methodology
MagnifyMoney researchers used data from the U.S. Bureau of Labor Statistics (BLS), U.S. Bureau of Economic Analysis (BEA), U.S. Census Bureau and MedicareAdvantage.com to estimate various costs of retirement in every state.
We first used the 2019 Consumer Expenditure Survey from BLS to find out how much households aged 65 and older spend yearly, on average, on:
- Food
- Transportation (vehicle purchases, maintenance and repairs, vehicle insurance, etc.)
- Entertainment
- Personal care
We then multiplied those figures by BEA regional price parities from 2019, which calculate the difference in price levels for goods and services across each state. Next, we added each total to the 2019 U.S. Census Bureau one-year statewide estimates on housing costs for those with a mortgage, from mortgage payments to real estate taxes to utilities.
Finally, we added the average cost in 2021 of Medicare Part B and Part C (also known as a Medicare Advantage plan) across each state where available (Alaska doesn’t offer Medicare Part C). We used the standard Part B premium for 2021, while Part C data was compiled by MedicareAdvantage.com.
How much it costs to retire in every state
Alabama
- Housing: $1,172
- Food: $472
- Transportation: $536
- Medicare Part B, Part C: $173
- Entertainment: $170
- Personal Care: $51
Alaska
- Housing: $1,882
- Food: $578
- Transportation: $656
- Medicare Part B, Part C: $149*
- Entertainment: $209
- Personal Care: $63
*Medicare Part C isn’t available in Alaska.
Arizona
- Housing: $1,457
- Food: $530
- Transportation: $601
- Medicare Part B, Part C: $165
- Entertainment: $191
- Personal Care: $57
Arkansas
- Housing: $1,094
- Food: $466
- Transportation: $529
- Medicare Part B, Part C: $171
- Entertainment: $168
- Personal Care: $50
California
- Housing: $2,421
- Food: $640
- Transportation: $727
- Medicare Part B, Part C: $169
- Entertainment: $231
- Personal Care: $69
Colorado
- Housing: $1,845
- Food: $560
- Transportation: $636
- Medicare Part B, Part C: $172
- Entertainment: $202
- Personal Care: $61
Connecticut
- Housing: $2,087
- Food: $577
- Transportation: $656
- Medicare Part B, Part C: $187
- Entertainment: $208
- Personal Care: $63
Delaware
- Housing: $1,557
- Food: $547
- Transportation: $621
- Medicare Part B, Part C: $171
- Entertainment: $197
- Personal Care: $59
Florida
- Housing: $1,530
- Food: $555
- Transportation: $631
- Medicare Part B, Part C: $162
- Entertainment: $200
- Personal Care: $60
Georgia
- Housing: $1,450
- Food: $513
- Transportation: $582
- Medicare Part B, Part C: $166
- Entertainment: $185
- Personal Care: $56
Reasons To Use Stash For Investing
- Get $5 to Make Your First Investment
- Invest in Stocks and ETFs with $1 or Less
- Receive Your Paycheck up to 2 Days Faster
- No Overdraft Fees or Minimum Balances
Hawaii
- Housing: $2,472
- Food: $656
- Transportation: $745
- Medicare Part B, Part C: $195
- Entertainment: $237
- Personal Care: $71
Idaho
- Housing: $1,306
- Food: $507
- Transportation: $576
- Medicare Part B, Part C: $185
- Entertainment: $183
- Personal Care: $55
Illinois
- Housing: $1,688
- Food: $536
- Transportation: $608
- Medicare Part B, Part C: $179
- Entertainment: $193
- Personal Care: $58
Indiana
- Housing: $1,146
- Food: $488
- Transportation: $554
- Medicare Part B, Part C: $169
- Entertainment: $176
- Personal Care: $53
Iowa
- Housing: $1,266
- Food: $489
- Transportation: $556
- Medicare Part B, Part C: $179
- Entertainment: $177
- Personal Care: $53
Kansas
- Housing: $1,387
- Food: $491
- Transportation: $557
- Medicare Part B, Part C: $167
- Entertainment: $177
- Personal Care: $53
Kentucky
- Housing: $1,179
- Food: $481
- Transportation: $546
- Medicare Part B, Part C: $168
- Entertainment: $173
- Personal Care: $52
Louisiana
- Housing: $1,279
- Food: $483
- Transportation: $549
- Medicare Part B, Part C: $176
- Entertainment: $174
- Personal Care: $52
Maine
- Housing: $1,387
- Food: $546
- Transportation: $620
- Medicare Part B, Part C: $174
- Entertainment: $197
- Personal Care: $59
Maryland
- Housing: $2,015
- Food: $592
- Transportation: $672
- Medicare Part B, Part C: $213
- Entertainment: $214
- Personal Care: $64
Reasons To Use Stash For Investing
- Get $5 to Make Your First Investment
- Invest in Stocks and ETFs with $1 or Less
- Receive Your Paycheck up to 2 Days Faster
- No Overdraft Fees or Minimum Balances
Massachusetts
- Housing: $2,276
- Food: $607
- Transportation: $689
- Medicare Part B, Part C: $222
- Entertainment: $219
- Personal Care: $66
Michigan
- Housing: $1,285
- Food: $508
- Transportation: $576
- Medicare Part B, Part C: $206
- Entertainment: $183
- Personal Care: $55
Minnesota
- Housing: $1,595
- Food: $539
- Transportation: $612
- Medicare Part B, Part C: $213
- Entertainment: $194
- Personal Care: $58
Mississippi
- Housing: $1,149
- Food: $464
- Transportation: $527
- Medicare Part B, Part C: $166
- Entertainment: $167
- Personal Care: $50
Missouri
- Housing: $1,271
- Food: $488
- Transportation: $554
- Medicare Part B, Part C: $167
- Entertainment: $176
- Personal Care: $53
Montana
- Housing: $1,466
- Food: $514
- Transportation: $584
- Medicare Part B, Part C: $195
- Entertainment: $186
- Personal Care: $56
Nebraska
- Housing: $1,427
- Food: $492
- Transportation: $559
- Medicare Part B, Part C: $169
- Entertainment: $178
- Personal Care: $53
Nevada
- Housing: $1,589
- Food: $536
- Transportation: $608
- Medicare Part B, Part C: $160
- Entertainment: $193
- Personal Care: $58
New Hampshire
- Housing: $1,963
- Food: $586
- Transportation: $665
- Medicare Part B, Part C: $179
- Entertainment: $211
- Personal Care: $63
New Jersey
- Housing: $2,413
- Food: $638
- Transportation: $724
- Medicare Part B, Part C: $174
- Entertainment: $230
- Personal Care: $69
Reasons To Use Stash For Investing
- Get $5 to Make Your First Investment
- Invest in Stocks and ETFs with $1 or Less
- Receive Your Paycheck up to 2 Days Faster
- No Overdraft Fees or Minimum Balances
New Mexico
- Housing: $1,269
- Food: $501
- Transportation: $569
- Medicare Part B, Part C: $177
- Entertainment: $181
- Personal Care: $54
New York
- Housing: $2,156
- Food: $640
- Transportation: $726
- Medicare Part B, Part C: $189
- Entertainment: $231
- Personal Care: $69
North Carolina
- Housing: $1,318
- Food: $504
- Transportation: $573
- Medicare Part B, Part C: $168
- Entertainment: $182
- Personal Care: $55
North Dakota
- Housing: $1,430
- Food: $491
- Transportation: $558
- Medicare Part B, Part C: $225
- Entertainment: $177
- Personal Care: $53
Ohio
- Housing: $1,250
- Food: $486
- Transportation: $552
- Medicare Part B, Part C: $194
- Entertainment: $175
- Personal Care: $53
Oklahoma
- Housing: $1,231
- Food: $480
- Transportation: $544
- Medicare Part B, Part C: $170
- Entertainment: $173
- Personal Care: $52
Oregon
- Housing: $1,750
- Food: $562
- Transportation: $638
- Medicare Part B, Part C: $197
- Entertainment: $203
- Personal Care: $61
Pennsylvania
- Housing: $1,477
- Food: $533
- Transportation: $606
- Medicare Part B, Part C: $201
- Entertainment: $192
- Personal Care: $58
Rhode Island
- Housing: $1,837
- Food: $557
- Transportation: $632
- Medicare Part B, Part C: $191
- Entertainment: $201
- Personal Care: $60
South Carolina
- Housing: $1,250
- Food: $503
- Transportation: $571
- Medicare Part B, Part C: $164
- Entertainment: $182
- Personal Care: $55
Reasons To Use Stash For Investing
- Get $5 to Make Your First Investment
- Invest in Stocks and ETFs with $1 or Less
- Receive Your Paycheck up to 2 Days Faster
- No Overdraft Fees or Minimum Balances
South Dakota
- Housing: $1,371
- Food: $483
- Transportation: $548
- Medicare Part B, Part C: $219
- Entertainment: $174
- Personal Care: $52
Tennessee
- Housing: $1,264
- Food: $493
- Transportation: $560
- Medicare Part B, Part C: $174
- Entertainment: $178
- Personal Care: $53
Texas
- Housing: $1,675
- Food: $531
- Transportation: $602
- Medicare Part B, Part C: $170
- Entertainment: $191
- Personal Care: $57
Utah
- Housing: $1,605
- Food: $531
- Transportation: $602
- Medicare Part B, Part C: $168
- Entertainment: $191
- Personal Care: $57
Vermont
- Housing: $1,606
- Food: $567
- Transportation: $644
- Medicare Part B, Part C: $190
- Entertainment: $205
- Personal Care: $61
Virginia
- Housing: $1,792
- Food: $557
- Transportation: $632
- Medicare Part B, Part C: $172
- Entertainment: $201
- Personal Care: $60
Washington
- Housing: $1,951
- Food: $596
- Transportation: $677
- Medicare Part B, Part C: $190
- Entertainment: $215
- Personal Care: $65
West Virginia
- Housing: $1,052
- Food: $479
- Transportation: $544
- Medicare Part B, Part C: $181
- Entertainment: $173
- Personal Care: $52
Wisconsin
- Housing: $1,412
- Food: $505
- Transportation: $574
- Medicare Part B, Part C: $194
- Entertainment: $182
- Personal Care: $55
Wyoming
- Housing: $1,417
- Food: $510
- Transportation: $579
- Medicare Part B, Part C: $201
- Entertainment: $184
- Personal Care: $55
Joy Wallet is an independent publisher and comparison service, not an investment advisor, financial advisor, loan broker, insurance producer, or insurance broker. Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only. They are not intended to provide investment advice. Joy Wallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances. We encourage you to seek personalized advice from qualified professionals regarding specific investment issues. Featured estimates are based on past market performance, and past performance is not a guarantee of future performance.
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