Retirees in 41 States Risk Outliving Their Savings
It’s becoming clearer that for many Americans, retirement may not be as financially secure as once hoped. A new analysis shows that seniors in 41 states could actually outlive their savings, leaving them facing serious money shortfalls later in life. And for a lot of retirees, this is one of their biggest fears—ranking right up there with declining health. In fact, one survey even found that some people worry more about running out of money than about death itself.
Here’s the issue in simple terms: the average retiree in America can expect about $762,000 in income from Social Security, retirement savings, and investments over the course of their retirement years. But when you add up all the expected expenses—things like housing, food, transportation, and healthcare—the total comes to about $877,000. That’s a gap of roughly $115,000, and it means many people are projected to come up short.
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Of course, where someone retires makes a huge difference. States with high costs of living are especially tough on savings. In New York, retirees face one of the worst shortfalls, averaging $448,000. Hawaii, the District of Columbia, Alaska, California, and Massachusetts are also among the hardest places to make retirement dollars stretch. Living expenses in those areas can quickly eat away at even a well-planned nest egg.
On the flip side, there are a few states where retirees may actually come out ahead. Washington tops the list, with an estimated $146,000 surplus over a typical retirement. Utah, Montana, and Colorado also rank well, offering a balance of reasonable living costs and relatively strong retirement incomes. Even smaller surpluses are possible in states like Iowa, Minnesota, and South Carolina.
What this really highlights is that retirement planning isn’t just about how much you save, but also about where you spend your retirement years. Location matters. A modest budget might be manageable in Montana, but the same amount could fall short in California or New York.
Experts point out a few strategies to help avoid running out of money. First, don’t underestimate how long you’ll live—many people are living well into their 80s or 90s, which means retirement can last 20 to 30 years. Second, saving aggressively during your working years is key—contributing steadily to a 401(k) or similar account and resisting the urge to dip into it for non-retirement expenses. Third, waiting to claim Social Security benefits can pay off, since the longer you wait, the higher your monthly checks will be. And finally, downsizing or moving to a more affordable location can help stretch limited savings further.
The bottom line is this: while retirement is often imagined as a time of relaxation and financial freedom, the reality for many Americans may be more challenging. With rising costs and longer lifespans, planning ahead has never been more important—and for some, making smart choices about where to live could be just as critical as how much they save.
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