Yagi Studio

How much will retirement cost you?

We looked at the cost of retirement in every state and in nearly 400 metro areas to help you better prepare for your golden years

Derek Silva


Derek Silva

Derek Silva

Senior Editor & Personal Finance Expert

Derek is a former senior editor and personal finance expert at Policygenius, where he specialized in financial data, taxes, estate planning, and investing. Previously, he was a staff writer at SmartAsset.

Published|6 min read

Policygenius content follows strict guidelines for editorial accuracy and integrity. Learn about our editorial standards and how we make money.

Key takeaways

  • If you retire at at the age of 65, you can expect to spend between $738,806 and $1,284,325 over the course of a 20-year retirement.

  • Mississippi is the most affordable state to retire in and Beckley, West Virginia, is the most affordable metro area.

  • Hawaii is the most expensive state for retirement overall, but the three least affordable metro areas are in California.

  • Seniors spend less annually than younger individuals, but people who are 65 and older spend 14% more on health care than people age 45 to 54.

Many people look forward to retirement as a time to relax and enjoy the things they couldn’t do during their working years. In order to live your retirement to the fullest, though, it helps to do some planning. A good place to start is by estimating how much you’ll be spending, because it helps ensure that you can afford the lifestyle you want.

Our study found that retirees spend less overall than younger generations. However, seniors do spend their money differently. For example, people who are 65 and older spend 14% more on health care than people age 45 to 54. Having an idea of what you’ll spend on, in addition to estimating how much you’ll spend, can go a long way.

Where you choose to retire will also directly affect how far your dollars go. Prices for goods and services can vary greatly. In New York, for example, rents alone are about 30% higher than the national average, while rents in Alabama are nearly 40% below the national average.

To help with your retirement planning, we estimated the average cost for a 20-year retirement that starts at age 65, the age when you can start receiving Medicare and near-max Social Security benefits. According to the CDC, if you reach 65, you can expect to live an average of about 20 more years.

In this article:

Most and least affordable states for retirement

Overall, the cost of a 20-year retirement ranges from $840,846 in Mississippi to $1,162,663 in Hawaii. In the 14 most expensive states, retirement will cost you at least $1 million over 20 years.

Outside of Hawaii, all 10 of the most expensive states are along either the East or West Coast. In particular, five of the top 10 are in the Northeast.

The 10 least affordable states for retirement

StateCost of 20-year retirement
District of Columbia$1,146,964
New York$1,136,172
New Jersey$1,107,718
New Hampshire$1,038,057

On the flip side, the South is the least expensive region for retirement. The five most affordable states for retirement are all in the Southern U.S.

The Midwest as a whole is also a relatively affordable retirement option. The 21 least expensive states are all in either the South or Midwest. (If you’re looking to build an environmentally conscious career before retirement, we previously found that the Midwest has the best states for green jobs).

The 10 most affordable states for retirement

StateCost of 20-year retirement
West Virginia$853,601
South Dakota$865,374

How much the average retirement costs nationally

If you retire at age 65, you can expect to spend about $981,150 over the course of a 20-year retirement. This figure is based on national spending data from the BLS. Looking at annual spending, individuals age 65 to 74 spend an average of $55,611 per year, while those aged 75 and older spend an average of $42,504 per year.

What do people actually spend money on? The table below shows some of the most common spending categories for individuals and how much people of different age groups spend on average.

Average annual spending by category and age

Retirement costs by metro area

It’s useful to estimate the cost of retirement by state and nationally, but costs may vary a lot even within a state. That’s why we looked at metro areas.

The Census Bureau defines a metro area (officially metropolitan statistical area, or MSA) as a group of one or more neighboring counties that contain a city with a population of at least 50,000 people. For example, the New York-Newark-Jersey City MSA contains large swaths of New York and New Jersey as well as one county from Pennsylvania.

Estimating the cost of retirement in a nearby metro area will give you get a better idea of how much you can expect to spend wherever you retire. These estimates can help you decide if you want to spend more of your retirement savings to live near a major city or whether you're better off moving somewhere more affordable to enjoy more peace and quiet.

Least affordable metro areas for retirement


Our study found that 45 metro areas will cost you at least $1 million for a 20-year retirement. California accounts for 31% of those metros (14 total). If you’re looking for an affordable retirement, you should especially avoid the San Francisco Bay Area. Five of the 10 most expensive places to retire are in the Bay Area (with nearby Santa Cruz also in the top 10).

Perhaps surprisingly, San Francisco is only the second most expensive metro area in the country to retire, with a 20-year retirement costing $1,255,872. San Jose takes the top spot with an estimated cost of $1,284,325 for a 20-year retirement.

Looking outside of California, Honolulu is the most expensive metro area (which is not surprising, since Hawaii is the most expensive state for retirement) followed by the New York City metro area. Those two areas cost $1,223,494 and $1,199,946, respectively.

Most affordable metro areas for retirement


Looking at the least expensive retirement destinations, six metro areas cost less than $800,000 over 20 years of retirement. Beckley, West Virginia, is the most affordable place to retire, with an estimated retirement cost of $738,806.

Like the most affordable states for retirement, the most affordable metro areas are predominantly in the South or Midwest. If you’re looking to retire in California or the Northeast, the least expensive California metro area is El Centro (116th most affordable) and the least expensive metro area in the Northeast is Lewiston-Auburn, Maine (247th most affordable).

Ready to shop for life insurance?

Start calculator

Tips to boost your retirement savings

Start investing. The only way to boost your savings enough for you to enjoy a comfortable retirement is to invest. Thankfully, investing isn’t difficult. There are many apps and services that will handle all the hard work of managing your investments. To get you started, try our list of this year’s best investing apps.

Take advantage of employer retirement plans. If you have access to a 401(k) plan through your employer, contribute to it. The beauty of a 401(k) is that you can contribute pretax money, which means your contributions go into the account before payroll taxes come out. The money then grows tax-free, and you may actually lower your income bill for the year. A traditional IRA or Roth IRA may also be a good option.

Get the most out of your savings account. A savings account with a high interest rate will help you earn more interest over your lifetime. It will also help you maximize your savings during your retirement.

A high-yield savings account with an interest rate of 2% will earn interest significantly faster than an account with an interest rate of 0.01% (what most big banks offer). Certificates of deposit (CDs) may even offer rates above 3%. Here’s a guide to the types of savings accounts.

See how fast your savings will grow with this free savings calculator.

Where we got our data

To create our savings estimates, we used national data from the U.S. Bureau of Labor Statistics (BLS) that looks at how much individuals over the age of 65 spend annually. We then adjusted the national spending data using regional price parities (RPPs) from the U.S. Bureau of Economic Analysis (BEA). RPPs measure the difference in prices — goods, services, and rents — across states and across metro areas.

Our analysis included all 50 states and the District of Columbia, as well as 382 metro areas. The BEA uses Census Bureau metro areas, so we also used the Census’ definitions for regions of the U.S.: Midwest, Northeast, South, and West.