January 19: Retire at 65 – Savings Needed in Every U.S. State
A fresh U.S. study puts the focus on minimum retirement savings by state, with needs ranging from about $735,000 in Oklahoma to $2.2 million in Hawaii to retire at 65. The list uses state cost of living, Social Security offsets, and the 4% rule. For UK investors, these numbers matter if you plan to move, support family in the U.S., or hold U.S. assets. We break down the findings and turn them into clear planning steps.
What the new state-by-state figures show
The report highlights the widest gaps at retirement. Hawaii tops the chart at roughly $2.2 million, while coastal states like California and Northeast states also rank high. These figures come from a GOBankingRates analysis covered by CNBC, using a 4% withdrawal rate and local expenses to estimate targets. See the full list at CNBC for state details.
At the other end, Oklahoma comes in near $735,000. Lower-tax, lower-cost states such as Texas and Tennessee often feature smaller targets in the minimum retirement savings by state roundup. These locations can stretch income further, especially when housing and healthcare are modest. That can influence retiree migration trends and demand in property markets and income products.
The list blends three core inputs: state cost of living, expected Social Security income, and the 4% rule for safe withdrawals. Costs vary widely across housing, medical cover, and everyday spend. Some states also tax retirement income, others do not. This method does not fit every case, but it gives clear benchmarks to compare minimum retirement savings by location. New Jersey’s detail is discussed by APP.com.
Why this matters to UK investors
If you aim to retire in the U.S., the minimum retirement savings by state list is a practical starting point. Keep amounts in USD for accuracy, then translate to GBP at your live rate and add a cushion. UK-based families supporting U.S. parents can also use it to gauge support needs and timing of remittances or asset sales.
State-specific costs can make or break your plan. Housing is often the largest line item. Healthcare costs, including Medicare premiums and out-of-pocket spend, vary by location. State taxes on pensions and withdrawals differ, too. All three can shift the minimum retirement savings by target higher or lower and change which communities stay affordable over time.
The 4% rule is a guide, not a promise. Market returns, fees, and sequencing risk matter. To protect the minimum retirement savings by target, many investors blend gilts or Treasuries with global equities, and keep one to three years of cash for flexibility. Revisit allocations yearly, and adjust withdrawals when markets are weak to help keep the plan on track.
Steps to hit your target by age 65
Start with your chosen state’s annual spend. Subtract Social Security or guaranteed income, then divide the gap by 4% to get a ballpark pot size. This ties your minimum retirement savings by target to concrete costs. Test best and worst case budgets, and include a health expense buffer so surprises do not derail your drawdown.
Map all predictable income: UK State Pension, defined benefit plans, and U.S. Social Security if eligible. Next, plan flexible drawdown from ISAs, SIPPs, or U.S. accounts such as 401(k)s or IRAs. Align the order of withdrawals with tax rules, and consider partial annuitisation to secure basics while leaving growth potential for the rest.
Reduce fees, automate saving, and raise contributions after pay rises. For those eyeing lower-cost states, consider moving earlier to shrink housing costs and lower the minimum retirement savings by requirement. Stress-test the plan for inflation spikes and poor early returns. Small changes made now compound into material differences by 65.
Final Thoughts
The new state-by-state figures make one point clear. Where you live sets the income you need and the pot size to back it. For UK investors, keep targets in USD first, convert thoughtfully, and add a safety margin. Use the 4% rule as a guide, not a guarantee. Tighten fees, secure a base level of guaranteed income, and keep a cash buffer to ride out weak markets. If a lower-cost, lower-tax state fits your life, the savings gap can be smaller and more achievable. Recheck your plan yearly so the numbers match your reality.
FAQs
What does “minimum retirement savings by state” mean?
It is a benchmark for the pot size needed to retire at 65 in each U.S. state. The study uses local living costs, expected Social Security income, and a 4% withdrawal rate. It is a guide, not a rule, and your own budget, taxes, and healthcare choices may change the target.
Is the 4% rule still safe to use in 2026?
It is a useful starting point, not a guarantee. Market returns, fees, and inflation change the safe rate. Many retirees use 3.5% to 4% with flexibility, trimming withdrawals after poor years and raising them after strong years. A cash buffer and low fees improve your odds.
How should UK investors convert U.S. targets into GBP?
Keep the original USD figure from the study, then apply the current GBP/USD rate used by your broker or bank. Add a cushion for currency swings and inflation. Update the conversion yearly or when planning a big decision, such as a home purchase or annuity buy.
Which sectors benefit if retirees move to lower-cost states?
Property services, homebuilders, and healthcare providers near popular retiree markets can see demand rise. Financial firms offering annuities, drawdown platforms, and low-cost funds also benefit as retirees seek reliable income. Lower-tax states can attract more asset flows, which supports local banks and wealth managers.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.
