Have you ever sat down with a cup of coffee, stared at your retirement account balance, and wondered if it’s really enough? For so many of us, that magic number of $1 million feels like the golden ticket to a worry-free life after work. But here’s the thing—it’s not always necessary. In fact, in a surprising number of places across the country, you can step away from the daily grind at 65 and live comfortably on quite a bit less.
I’ve always found it fascinating how location changes everything when it comes to money in retirement. What feels tight in one part of the country might feel downright luxurious somewhere else. Recent analyses show that in 32 U.S. states, the estimated savings needed to cover basic living expenses for about 25 years of retirement falls below that coveted seven-figure mark. That’s a lot of folks who can breathe a little easier.
Why Location Matters More Than You Think in Retirement
Let’s be honest: retirement isn’t just about how much you’ve saved—it’s about how far that money stretches. The cost of housing, groceries, healthcare, utilities, and getting around varies wildly from state to state. Factor in average Social Security benefits, and suddenly some places look a whole lot more retiree-friendly.
These estimates typically assume you’re covering essential expenses only—no lavish vacations or fancy cars included. They’re based on real data for folks 65 and older, subtracting typical Social Security income, and then figuring out what nest egg you’d need if you withdrew about 4% each year to make it last a quarter-century. It’s a conservative, practical approach that keeps things grounded.
In my view, one of the most eye-opening parts is realizing that basic living costs can still add up faster than we expect. Even in lower-cost areas, healthcare alone can throw a curveball. But the good news? Plenty of states keep those totals manageable.
The Most Affordable States for Retirement Savings
Let’s dive into the states where your savings don’t have to be quite so massive. Starting with the absolute lowest requirements, these places stand out for keeping everyday expenses in check.
Oklahoma tops the list with an annual cost of living around $51,849 for retirees. That translates to needing roughly $735,284 in savings to cover the gap after Social Security. It’s hard not to appreciate how far your dollars go there—low housing costs and reasonable groceries make a real difference.
- Mississippi comes in close behind, with annual expenses at about $52,524 and savings needed around $752,178. Southern hospitality meets southern affordability here.
- Alabama follows with $53,999 annually and $789,037 required—another strong contender in the Southeast.
- West Virginia sits at $54,122 yearly, needing $792,109. The mountain scenery is a nice bonus for those who love nature.
- Arkansas rounds out the sub-$800k group at $54,859 and $810,538. It’s consistently one of the budget-friendly spots year after year.
These numbers aren’t pulled out of thin air. They’re grounded in government data on what real retirees spend, adjusted for the realities of post-65 life. And honestly, seeing them laid out like this makes me think twice about where people choose to settle down.
Mid-Range States Where You Stay Well Under $1 Million
Moving up a bit, there’s a solid cluster of states where the required savings hover between $800,000 and $900,000. These aren’t dirt-cheap, but they’re still very doable for many middle-class retirees.
Take Kansas, for example. Annual costs run about $54,613, meaning you’d need around $804,395 saved. Missouri is similar at $54,674 and $805,931. Both offer that classic Midwest sensibility—affordable homes, friendly communities, and no extreme weather surprises most years.
Then you’ve got places like Indiana ($55,657 annual, $830,504 needed) and Texas ($55,780, $833,575). Texas especially surprises people—no state income tax helps stretch those dollars further, even if some cities are pricier.
- Iowa and Tennessee tie at around $55,473 annually, requiring $825,896 each. Both deliver low-key living with plenty of small-town charm.
- Nebraska comes in at $56,272 and $845,862—quiet, steady, and surprisingly affordable.
- Georgia and South Dakota both land around $56,395, needing $848,933. From peaches to prairies, variety abounds.
Perhaps the most interesting aspect here is how the Midwest and parts of the South dominate these lists. Lower property taxes, cheaper utilities, and more modest healthcare costs all play a role. If you’re flexible about location, these states open up possibilities that coastal areas simply can’t match.
States Pushing Close to the $1 Million Mark—But Still Under
As we edge higher, states like Kentucky ($56,456 annual, $850,469 needed) and Louisiana ($56,947, $862,756) offer warm climates without breaking the bank. New Mexico and South Carolina both sit at $56,825 and $859,684—desert vibes or coastal breezes, take your pick.
Michigan ($58,176, $893,472) and Wyoming ($58,545, $902,686) bring in northern appeal with reasonable costs. Illinois ($58,913, $911,901) and Minnesota ($57,869, $885,793) show that even colder climates can be budget-friendly if other expenses stay low.
Retirement isn’t about having the most money—it’s about making what you have work for the life you want.
— A retirement advisor’s common wisdom
North Carolina ($59,835, $934,938), Pennsylvania ($59,650, $930,331), and Wisconsin ($60,019, $939,546) round out many of these mid-to-upper ranges. Florida ($61,125, $967,190) sneaks in just under the wire—sunshine without the ultra-high price tag of some other warm spots.
States like Idaho ($60,818, $959,511), Utah ($60,879, $961,047), Nevada ($60,572, $953,368), and Virginia ($61,493, $976,405) push closer to $1 million but remain accessible. It’s a reminder that even in growing or scenic areas, careful planning keeps things within reach.
What These Numbers Really Mean for Your Planning
Looking at all this, one thing stands out: geography is a huge lever in retirement success. If you’re willing to relocate—or already live in one of these states—you might discover your current savings are farther along than you thought.
But let’s not sugarcoat it. These figures cover essentials only. They don’t include extras like travel, hobbies, or unexpected medical bills beyond the average. A paid-off home helps tremendously, and multiple income streams (pensions, part-time work, investments) can lower the savings burden even more.
I’ve spoken with retirees who moved to lower-cost areas and suddenly felt like their money doubled in value. One couple I know downsized from California to Tennessee and now enjoys a lifestyle they never thought possible on their modest nest egg. Stories like that make the data feel real.
Healthcare remains the wildcard. Costs rise with age, and Medicare doesn’t cover everything. Long-term care insurance or a dedicated health fund can protect your principal. Taxes matter too—some states are kinder to retirement income than others.
Practical Steps to Make Your Retirement Savings Go Further
Whether you’re in one of these affordable states or hoping to move to one, a few strategies can stretch your dollars without sacrificing quality of life.
- Downsize your home or consider a more efficient layout—fewer rooms mean lower utilities and maintenance.
- Explore part-time work or consulting in retirement; it adds income and keeps you socially connected.
- Optimize your investment mix for steady withdrawals—diversify to weather market ups and downs.
- Look into tax-friendly states if you’re still working; moving earlier can compound savings over time.
- Build a small “fun fund” separate from essentials so you don’t dip into principal for enjoyment.
Perhaps the biggest mindset shift is moving away from that rigid $1 million target. It’s a nice round number, but real life is messier—and more flexible—than that. Focus on what you need for your lifestyle in your chosen spot, and the path becomes clearer.
Retirement planning isn’t one-size-fits-all. For some, staying put works perfectly. For others, a move unlocks freedom they didn’t know was possible. Either way, knowing these state-by-state realities empowers better decisions.
So next time someone asks how much you really need to retire, you can smile and say: it depends—mostly on where you plan to live. And in 32 states, the answer is a lot less than you might expect.
At the end of the day, the goal isn’t just to retire—it’s to enjoy the years you’ve worked so hard for. With smart choices and realistic expectations, that goal feels a lot more achievable, no matter your exact number.
