Did you know it’s often cheaper to retire in the place you currently live? But, for those of you who want a change of scenery, you should know that some places are much more expensive to retire in than others.
Continue reading to find out which 10 states are the most expensive to retire, according to Investopedia.
10. New York
New York has the second-highest cost of living in the U.S. As a result; it is one of the most expensive places in the country to retire.
In fact, you’d need about $1.4 million in savings to live comfortably. This is all due to the state’s exorbitant real estate and daily living costs, especially in New York City.
Additional state data:
Yearly expenses: $69,847
Tax rate rank: 50 (highest)
State income tax: 4.0% to 10.9%
State sales tax: 4.0% (up to 8.875% total sales tax depending on the municipality)
Estate tax: Yes
Inheritance tax: No
9. New Jersey
New Jersey has the 8th highest cost of living and the 3rd highest tax rate in the United States. On average, you would need a savings of $1,174,100 for a comfortable retirement in this state.
Additionally, the Garden State is densely populated, which means you may have difficulty finding an affordable place to settle down, especially if you don’t want to live near any dangerous cities.
Additional state data:
Yearly expenses: $64,736
State income tax: 1.4% to 8.97%
State sales tax: 7.0%
2021 population: 8,874,520
8. Hawaii
The Aloha State has a high cost of living. Retiring in Hawaii will cost you almost $800,000 more than the next most expensive state! To further put that into perspective, you would need $2,151,884 in your savings to live comfortably there.
As you probably guessed, Hawaii has a reputation for exorbitant real estate and daily living costs. Annual spending for a comfortable retirement is the highest in the U.S., at $117,724.18.
Now, if you can swing that, then I see nothing wrong with you spending your golden years in a “veritable paradise,” as GOBankingRates puts it.
7. California
The Golden State has the highest cost of living in the country. It makes sense; after all, it is home to Beverly Hills, the land of swimming pools and movie stars.
And, while the average price of retirement in California is $1,369,911, that number could eventually climb a lot higher if you fall victim to one of the many wildfires that plague the state.
Additional state data:
State income tax: 1.0% to 13.3%
State sales tax: 7.25% (up to 9.75% combined in special city/county taxing districts)
Estate tax: No
Inheritance tax: No
Capital tax gains rate: 33% (the highest in the country)
Social Security benefits: Exempt from taxes
Railroad Retirement benefits: Exempt from taxes
6. Washington
Washington is a beautiful state — but beware if you’re thinking of retiring there. The cost of living can be quite outrageous, especially in Seattle.
The median home price there is $673,874. Healthcare is expensive, too. Healthcare in Seattle is 24% higher than the national average.
Seattle residents, on average, pay $547.72 for prescription drugs. Food and groceries are quite costly, too, with a loaf of bread costing $4.22. Gasoline is yet another expense that’s more expensive in Seattle. A gallon costs about $3.47.
So, what does all this mean as far as retirement savings? Well, according to an article published by GOBankingRates, you would need about $1,003,719 in savings.
The good news is that if you have your heart set on retiring in Seattle, more affordable options are available inland.
5. Vermont
Believe it or not, New England is one of the most expensive places to retire in the United States. Vermont has the 10th highest cost of living and 8th highest tax rate in the nation.
You would need about $1.08 million in savings for a comfortable retirement. That comes out to about $60,348 in yearly expenses.
Additional state data:
State income tax: 3.55% to 8.95%
State sales tax: 6.0%
Estate tax: Yes
Inheritance tax: No
Social security benefits: Taxed (up to 85%)
Railroad retirement benefits: Exempt from taxes
4. Nevada
The average price of retirement in Nevada might not be as high as others on this list, but it’s still quite expensive at $899,456. Unfortunately, the state also ranks poor when it comes to crime, healthcare and overall well-being.
On a positive note, you’ll actually get to save a lot of money if you do retire in Nevada since there is no state income tax, no estate tax, and no inheritance tax.
So, if, after reading all this, you still insist on retiring there even though you don’t quite have nearly $900,000 saved up, perhaps you can take a trip to Vegas now and win big at the casino. Then, you’ll be able to live lavishly in Nevada throughout the rest of your golden years.
3. Maryland
It’s expensive to live in Maryland. So, as a result, you would need $1,238,947 in retirement savings to live comfortably. If you had your heart set on retiring in Maryland but can’t afford it and would like to settle down in a nearby state, you might want to think again.
That’s right. Nearby Virginia is another state that’s very expensive to retire in, costing $885,470 in savings. Neighboring Delaware is expensive, too. You’d need about $960,488 in savings to retire comfortably there.
So, what do these three states have in common that makes them all so expensive? Waterfront property, among other things. And not just waterfront, but oceanfront property, particularly along the eastern half of each of these states.
2. Connecticut
According to an article published by Investopedia, Connecticut is the 5th most expensive state in terms of cost of living. You’ll need $1,184,272 to retire in this state.
Additionally, Connecticut does not offer any exemptions or tax credits for most retirement income. This includes benefits for Social Security recipients with a federal adjusted gross income of more than $50,000 for individuals and more than $60,000 for married couples.
Additional state data:
State income tax: 3.0% to 6.99%
State sales tax: 6.35% (7.75% for certain luxury items)
Estate tax: Yes
Inheritance tax: No
1. Rhode Island
It may come as a surprise that the smallest state in the union also has the 10th highest cost of living in the country and the 8th highest tax rate — this is even after lowering its top income tax rate from 9.9% to 5.99% in 2011.
And, despite its small size, Rhode Island is also densely populated, which means all of its property is just a short drive from the coastline and, therefore, very expensive.
Additional state data:
State income tax: 3.75% to 5.99%
State sales tax: 7.0%
Estate tax: Yes
Inheritance tax: No
Railroad Retirement benefits: Exempt from taxes
Social Security benefits: Exempt from taxes if they fall below $80,000 for single filers and up to $100,000 for joint filers
2021 population: 1,061,509
For more help deciding where to spend your golden years, check out 10 States That Don’t Tax Retirees’ Income.
