California Retirees Face $330,000 Shortfall – Fifth Largest in the Nation

Retirees in California are expected to face a funding gap of more than $330,000 over the course of their retirement, according to a new study.

The Transamerica Center for Retirement Studies (TCRS) reported in June that in 41 states, retirees are projected to spend more than the savings they have accumulated. An analysis by the senior-focused platform “Seniorly” found that, on average, Americans retiring at age 65 will face an $115,000 deficit over 18 years of retirement. While the average retiree sets aside about $762,000—including Social Security, investments, and other benefits—actual spending reaches roughly $877,000.

States with high living costs, including New York, Hawaii, and California, were categorized as “at-risk” areas for retirement security. In California, retirees are expected to generate $926,000 in income but spend about $1.3 million over 19.3 years, leaving a $337,000 shortfall—the fifth largest nationwide. New York ranked highest with a $448,000 deficit, followed by Hawaii at $417,000.

On the other hand, retirees in nine states—including Washington, Utah, Montana, Colorado, Iowa, Minnesota, and Maryland—are expected to have a budget surplus. In Washington, retirees will earn an estimated $1.1 million during retirement while spending just under $990,000, leaving a cushion of about $146,000.

Experts recommend preparing for longer life expectancy, saving aggressively through employer retirement plans such as 401(k)s, and setting aside emergency funds. Christine Healy, Chief Growth Officer at Seniorly, noted that “where you retire is just as important as how much you save,” pointing out that living costs, life expectancy, and healthcare expenses vary significantly by state.

Analysts also highlight that women, who are likely to live longer—often to age 87 if retiring at 70—should plan for at least 17 years of retirement expenses.