Cost Of Retirement In The US: Hawaii Tops The List With $2.21 Million Needed, West Virginia The Lowest

The state where you want to retire can make a difference in the amount you need to save.

The cost of retiring at 65 in the U.S. could vary by as much as $1.49 million depending on the state.

The GoBankingRates study was done using data from the U.S. Bureau of Labor Statistics to estimate living expenses.

The cost of living in Hawaii is the highest in the United States, and a retiree needs at least $2.21 million to live during the first 25 years after retirement to stay above the basic level of housing, groceries, utilities, healthcare and transportation.

Assuming an average annual expense of $110,921, far exceeding what many other states cost, the analysis puts the main burden on the significant housing cost in Hawaii, though healthcare and utilities also take a bite out of the bottom line.

On the other hand, West Virginia is the cheapest state to retire in, as it would take only $712,913 to cover the same basic expenses.

The annual cost of living in West Virginia is $50,954, which is reflective of its lower housing costs and more affordable general living conditions.

Retirees in West Virginia can expect to live on less, but these figures reflect a bare-bones retirement, excluding discretionary spending such as travel or entertainment.

The disparity in state costs—especially housing, healthcare, and transportation—has a direct correlation with the need for retirement savings.

A retiree living in California will need more than $1.61 million to enjoy a similar lifestyle, as the annual cost of living there is $86,946.

Meanwhile, in Alabama, which has an annual cost of living at $53,357, about $773,000 should be sufficient for retirement, according to the study.

States with major urban centers or high demand for housing tend to have higher retirement savings requirements.

For instance, retirees in New York and California have to pay through the nose for housing and utilities, pushing the total amount needed for retirement far beyond the national average.

New York, for example, demands over $1.29 million for retirement, driven by the state's $74,147 annual living cost, USA Today reports.

On the other hand, states in the South, like Arkansas, Alabama, and West Virginia, are much cheaper in comparison. Retirees in Arkansas require only about $776,000, while in Alabama, the figure is a little higher at $773,000.

The estimates are based on averages and do not reflect individual circumstances or even potential future expenses like inflation or unexpected health costs.