Here is a number worth knowing: the average 65-year-old American is expected to spend about $900,000 on necessities in retirement. But the average senior only has around $790,000 coming in from Social Security, savings, and investments combined.
That is a gap of roughly $110,000. And depending on where you live, it can be much wider or disappear entirely.
An analysis by CareScout looked at which states leave seniors most at risk of outliving their money, and which ones give them the best chance of finishing ahead.
The States Where Your Money Goes Fastest
Five states stand out as the toughest places to stretch a retirement nest egg:
- New York — seniors expected to spend $471,000 more than they have saved
- District of Columbia — projected shortfall of $432,000
- California — expected to outspend savings by $395,000
- Alaska — projected shortfall of $350,000
- New Mexico — expected to outspend savings by $277,000
A big reason? Cost of living. Four of these five states also rank among the six most expensive states in the country. And the cost of senior care adds serious pressure on top of that.
In Alaska, seniors spend an average of more than $333,000 per year on a semi-private nursing home room. In New York, the median annual nursing home cost runs more than $186,000.
Where Savings Actually Last
Only nine states give seniors a real financial cushion, where savings tend to outlast the person, not the other way around.
Washington State leads the list. Seniors there have an average surplus of $276,000. New Hampshire comes in second, with a surplus of more than $200,000. Colorado, Nebraska, Idaho, and Minnesota also offer six-figure cushions, with surpluses ranging between $100,000 and $200,000.
What do these states have in common? CareScout found they tend to offer a combination of well-paying jobs and more reasonable day-to-day costs. That gives seniors a better shot at spending down savings slowly rather than all at once.
What You Can Do About It
Where you live is one of the biggest levers you have. If you are thinking about relocating, or wondering whether to stay put, it is worth researching costs in your current state before making a decision.
State taxes matter too. Some states tax Social Security income or retirement account withdrawals. Others do not. That difference can add up to real money over time.
It also helps to build a retirement budget before you need one. Map out your regular expenses such as mortgage or rent, utilities, everyday costs and set aside estimates for one-time spending like travel. Do not forget health care, including the possibility of nursing home or assisted living costs down the road.
The goal is simple: make your savings outlive you, not the other way around. A little planning now and a hard look at where you hang your hat can make all the difference.
