January 26: 32 U.S. States Where You Can Retire at 65 With Under $1M in Savings
Retirement savings by state is back in focus after new data shows 32 U.S. states let you retire at 65 with under $1 million. The gap between the most and least expensive states is as high as $1.46 million. That difference flows from housing, healthcare, taxes, and insurance. For UK readers, this shapes where Americans move, how they spend, and which local economies grow. It also affects portfolio exposure to U.S. housing, healthcare, and municipal credit, plus planning around Social Security income.
Retirement savings by state: what the new report means
A fresh review finds 32 states need under $1 million in nest egg to retire at 65, while the state-by-state spread reaches $1.46 million. The drivers are housing costs, healthcare premiums and out-of-pocket bills, local taxes, and property insurance. As CNBC reports, location choice has a big impact on the income needed and on how long a portfolio lasts.
This gap changes withdrawal rates and the mix between safe income and growth. Social Security income covers a larger share in lower-cost states, which reduces sequence-risk early in retirement. In higher-cost states, retirees may need bigger cash buffers and delayed withdrawals. For retirement savings by state, the lesson is clear: the postcode you choose can add or remove years of portfolio longevity.
Cost of living index: reading the map
The cost of living index sets a baseline of 100 and compares prices across categories like housing, utilities, food, transport, and healthcare. A lower index means everyday costs are cheaper, so withdrawals can be smaller. Because housing and healthcare dominate retiree budgets, changes in these two line items most influence retirement savings by state and the total capital a 65-year-old needs.
Broadly, inland and smaller metro areas tend to sit below the national index, while large coastal hubs sit above it. That means a given lifestyle can cost much less away from expensive coastal cities. For retirement savings by state, this regional split helps explain migration trends, shifting spending toward lower-cost markets and raising demand for local services, housing, and care.
Why this matters to UK investors and planners
Flows of retirees to lower-cost states can support single-family rentals, select REIT segments, utilities, and outpatient healthcare operators. It can also widen tax bases in growth markets while pressuring high-cost areas. Retirement savings by state therefore feeds into muni credit quality, infrastructure needs, and local consumption. UK investors with U.S. exposure can tilt toward beneficiaries of inbound retiree demand while watching insurance and weather risks.
UK savers with U.S. assets should model withdrawals in both GBP and USD to track FX risk. U.S. Social Security income is inflation-linked, but purchasing power still varies by state costs. UK State Pension rules differ, so align timelines and allowances. Retirement savings by state offers a practical lens for stress-testing cash flows under varied cost bases and different tax treatments across jurisdictions.
How to plan to retire at 65 in the U.S.
Start with an annual budget by line item, apply a local cost of living index, then subtract expected Social Security income for your household. Test a 3.5% to 4% withdrawal range under different market paths. Layer in healthcare, Medicare choices, and property insurance. For retirement savings by state, run at least three scenarios: low-cost, mid-cost, and high-cost locations to see how much flexibility you have.
Use state and county tax calculators, compare property and insurance quotes, and check HOA fees. Review local healthcare networks and travel links. Cross-check estimates with independent lists such as Cheapism’s state-by-state estimates. Retirement savings by state is not static, so refresh figures yearly and add buffers for inflation, rate changes, and unexpected repairs or medical needs.
Final Thoughts
The headline is simple: location choice drives outcomes. With 32 U.S. states under $1 million to retire at 65 and a $1.46 million gap from cheapest to costliest, the state you pick sets your withdrawal rate, risk tolerance, and lifestyle options. Use the cost of living index to turn broad ideas into numbers. Map your budget, subtract Social Security income, and compare three locations side by side. For UK investors, retirement savings by state also signals where consumer demand, housing activity, and municipal finances may strengthen next. Build a plan that is flexible on location, diversified in income sources, and stress-tested in both GBP and USD.
FAQs
What does “retirement savings by state” actually mean?
It is an estimate of how much a 65-year-old needs to fund typical expenses in a specific U.S. state. Analysts total housing, healthcare, food, transport, utilities, and taxes, then back out Social Security income to size the required nest egg. Different prices and taxes create large differences across states.
How does the cost of living index affect my retirement pot?
A lower index means local prices are cheaper, so you can withdraw less each year to cover the same lifestyle. Housing and healthcare are the biggest levers. If you pick a lower-cost area, your savings may last longer, or you can spend more without raising risk. Always test multiple scenarios.
Should I convert amounts to pounds when planning from the UK?
Yes, plan in GBP and USD. Model withdrawals, taxes, and fees in both currencies to see FX risk. Keep an eye on exchange-rate ranges and costs of currency transfers. If you expect USD spending, hold some USD income sources. Revisit assumptions at least annually and after large currency moves.
Where can I find the latest state estimates?
Start with recent media summaries and independent lists that compile state-level budgets and savings needs. For example, CNBC has coverage of the latest findings, and Cheapism publishes a state-by-state view. Update your plan yearly, and check local taxes, insurance, and healthcare networks before choosing a location.
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.
