The average American's lack of savings paints a fairly discouraging picture of retirement. A 2019 GOBankingRates survey found that 64% are expected to retire with less than $10,000 in savings. Many Americans see themselves working past age 65 out of financial necessity, according to the Pew Charitable Trusts, with some people planning to never retire at all.
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But the amount of money you need to retire depends on where you live, due to state-by-state differences in the cost of living. In some areas of the country, a nest egg of $700,000 may be sizable enough for retirement. In other regions, you have to build up your savings even more to reach at least $1 million in retirement funds.
To find out exactly how much you need saved to retire, GOBankingRates calculated annual expenditures for a retired person in every state after deducting Social Security income, based on data from the Bureau of Labor Statistics and the Missouri Economic Research and Information Center. The study assumed that you would draw down your savings by 4% every year to cover your living expenses, and states were ranked from the smallest nest egg needed to the biggest.
GOBankingRates found that residents of many Southeastern and Southwestern states won't have to put away nearly as much money for retirement, with states like Mississippi and Oklahoma requiring less than $700,000 in savings to retire. However, the Northeastern states aren't so lucky -- they claimed seven spots among the bottom 10 states. To ensure smooth sailing in your golden years, make sure you're using the right tools to save for retirement.
Last updated: Jan. 14, 2021
DenisTangneyJr / Getty Images Annual cost of living: $42,976.70
Cost of living after using Social Security income: $26,670.86
How much you need in savings to retire: $666,772
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JTSorrell / Getty Images Annual cost of living: $43,790.46
Cost of living after using Social Security income: $27,484.62
How much you need in savings to retire: $687,116
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plherrera / Getty Images Annual cost of living: $44,197.34
Cost of living after using Social Security income: $27,891.50
How much you need in savings to retire: $697,288
Sean Pavone / Getty Images Annual cost of living: $44,451.64
Cost of living after using Social Security income: $28,145.80
How much you need in savings to retire: $703,645
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benedek / Getty Images Annual cost of living: $44,604.22
Cost of living after using Social Security income: $28,298.38
How much you need in savings to retire: $707,460
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Starcevic / Getty Images Annual cost of living: $45,112.82
Cost of living after using Social Security income: $28,806.98
How much you need in savings to retire: $720,175
Sean Pavone / Getty Images/iStockphoto Annual cost of living: $45,265.40
Cost of living after using Social Security income: $28,959.56
How much you need in savings to retire: $723,989
STLJB / Shutterstock.com Annual cost of living: $45,316.26
Cost of living after using Social Security income: $29,010.42
How much you need in savings to retire: $725,261
Davel5957 / Getty Images Annual cost of living: $45,621.42
Cost of living after using Social Security income: $29,315.58
How much you need in savings to retire: $732,890
SeanPavonePhoto / Getty Images Annual cost of living: $45,824.86
Cost of living after using Social Security income: $29,519.02
How much you need in savings to retire: $737,976
f11photo / Shutterstock.com Annual cost of living: $46,130.02
Cost of living after using Social Security income: $29,824.18
How much you need in savings to retire: $745,605
allaalexandra / Shutterstock.com Annual cost of living: $46,486.04
Cost of living after using Social Security income: $30,180.20
How much you need in savings to retire: $754,505
MidwestWilderness / Getty Images/iStockphoto Annual cost of living: $46,638.62
Cost of living after using Social Security income: $30,332.78
How much you need in savings to retire: $758,320
kanonsky / Getty Images Annual cost of living: $46,791.20
Cost of living after using Social Security income: $30,485.36
How much you need in savings to retire: $762,134
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pabradyphoto / Getty Images Annual cost of living: $46,994.64
Cost of living after using Social Security income: $30,688.80
How much you need in savings to retire: $767,220
aceshot / Getty Images/iStockphoto Annual cost of living: $47,198.08
Cost of living after using Social Security income: $30,892.24
How much you need in savings to retire: $772,306
f11photo / Shutterstock.com Annual cost of living: $47,248.94
Cost of living after using Social Security income: $30,943.10
How much you need in savings to retire: $773,578
Thomas Kelley / Shutterstock.com Annual cost of living: $47,299.80
Cost of living after using Social Security income: $30,993.96
How much you need in savings to retire: $774,849
KingWu / Getty Images Annual cost of living: $48,215.28
Cost of living after using Social Security income: $31,909.44
How much you need in savings to retire: $797,736
traveler1116 / Getty Images/iStockphoto Annual cost of living: $48,215.28
Cost of living after using Social Security income: $31,909.44
How much you need in savings to retire: $797,736
TriggerPhoto / Getty Images Annual cost of living: $48,367.86
Cost of living after using Social Security income: $32,062.02
How much you need in savings to retire: $801,551
xavierarnau / Getty Images Annual cost of living: $48,469.58
Cost of living after using Social Security income: $32,163.74
How much you need in savings to retire: $804,094
f11photo / Getty Images/iStockphoto Annual cost of living: $48,774.74
Cost of living after using Social Security income: $32,468.90
How much you need in savings to retire: $811,723
georgeclerk / iStock.com Annual cost of living: $48,927.32
Cost of living after using Social Security income: $32,621.48
How much you need in savings to retire: $815,537
SL_Photography / Getty Images Annual cost of living: $49,079.90
Cost of living after using Social Security income: $32,774.06
How much you need in savings to retire: $819,352
DenisTangneyJr / Getty Images Annual cost of living: $49,130.76
Cost of living after using Social Security income: $32,824.92
How much you need in savings to retire: $820,623
vale_t / Getty Images Annual cost of living: $50,046.24
Cost of living after using Social Security income: $33,740.40
How much you need in savings to retire: $843,510
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Terry Kelly / Shutterstock.com Annual cost of living: $50,809.14
Cost of living after using Social Security income: $34,503.30
How much you need in savings to retire: $862,583
3841128876 / Shutterstock.com Annual cost of living: $51,165.16
Cost of living after using Social Security income: $34,859.32
How much you need in savings to retire: $871,483
benedek / Getty Images Annual cost of living: $51,266.88
Cost of living after using Social Security income: $34,961.04
How much you need in savings to retire: $874,026
Sherry V Smith / Shutterstock.com Annual cost of living: $51,724.62
Cost of living after using Social Security income: $35,418.78
How much you need in savings to retire: $885,470
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WitGorski / Getty Images Annual cost of living: $51,877.20
Cost of living after using Social Security income: $35,571.36
How much you need in savings to retire: $889,284
tobiasjo / Getty Images Annual cost of living: $52,284.08
Cost of living after using Social Security income: $35,978.24
How much you need in savings to retire: $899,456
pascaluehli / Getty Images/iStockphoto Annual cost of living: $52,640.10
Cost of living after using Social Security income: $36,334.26
How much you need in savings to retire: $908,357
DenisTangneyJr / Getty Images Annual cost of living: $54,572.78
Cost of living after using Social Security income: $38,266.94
How much you need in savings to retire: $956,674
Robert Kirk / Getty Images Annual cost of living: $54,725.36
Cost of living after using Social Security income: $38,419.52
How much you need in savings to retire: $960,488
urbancow / Getty Images Annual cost of living: $54,827.08
Cost of living after using Social Security income: $38,521.24
How much you need in savings to retire: $963,031
AnSyvanych / Getty Images Annual cost of living: $56,454.60
Cost of living after using Social Security income: $40,148.76
How much you need in savings to retire: $1,003,719
Sean Pavone / Shutterstock.com Annual cost of living: $58,743.30
Cost of living after using Social Security income: $42,437.46
How much you need in savings to retire: $1,060,937
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Paulaandreaonline / Getty Images/iStockphoto Annual cost of living: $59,658.78
Cost of living after using Social Security income: $43,352.94
How much you need in savings to retire: $1,083,824
DenisTangneyJr / Getty Images/iStockphoto Annual cost of living: $60,269.10
Cost of living after using Social Security income: $43,963.26
How much you need in savings to retire: $1,099,082
littleny / Getty Images Annual cost of living: $63,269.84
Cost of living after using Social Security income: $46,964.00
How much you need in savings to retire: $1,174,100
benedek / Getty Images Annual cost of living: $63,676.72
Cost of living after using Social Security income: $47,370.88
How much you need in savings to retire: $1,184,272
emperorcosar / Shutterstock.com Annual cost of living: $64,846.50
Cost of living after using Social Security income: $48,540.66
How much you need in savings to retire: $1,213,517
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Rafael Vilches Rey / Getty Images Annual cost of living: $65,863.70
Cost of living after using Social Security income: $49,557.86
How much you need in savings to retire: $1,238,947
SeanPavonePhoto / Getty Images Annual cost of living: $66,270.58
Cost of living after using Social Security income: $49,964.74
How much you need in savings to retire: $1,249,119
Shutterstock.com Annual cost of living: $68,661.00
Cost of living after using Social Security income: $52,355.16
How much you need in savings to retire: $1,308,879
4nadia / Getty Images Annual cost of living: $69,678.20
Cost of living after using Social Security income: $53,372.36
How much you need in savings to retire: $1,334,309
anouchka / Getty Images Annual cost of living: $71,102.28
Cost of living after using Social Security income: $54,796.44
How much you need in savings to retire: $1,369,911
jimfeng / Getty Images Annual cost of living: $102,381.18
Cost of living after using Social Security income: $86,075.34
How much you need in savings to retire: $2,151,884
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Methodology: To determine exactly how much you need to retire in your state, GOBankingRates found the annual cost of expenditures for a retired person in each state by multiplying the 65-and-older expenditures from the Bureau of Labor Statistics' 2018 Consumer Expenditure Survey by the cost-of-living index for each state from the Missouri Economic Research and Information Center's cost-of-living series for the third quarter of 2019. GOBankingRates divided each state’s annual expenditures -- minus the annual Social Security income, as sourced from the Social Security Administration's Monthly Statistical Snapshot of November 2019 -- by 0.04, assuming that a retired person would draw down their savings by 4% each year to pay for living expenses. All data used to conduct this study was compiled and verified on Dec. 13, 2019.
This article originally appeared on GOBankingRates.com : Here’s Exactly How Much Savings You Need To Retire In Your State
