State Ranked Second-Most Expensive for Retirement
Retirees Face Pressure From High Taxes and Living Costs
California has once again ranked among the most expensive states in the nation for retirement, with analysts warning that retirees may need millions of dollars in savings to maintain a comfortable lifestyle.
According to a recent analysis by MoneyLion, California ranked second nationwide in retirement costs, with an estimated 20-year retirement expense of approximately $2.44 million. The report calculated retirement costs by factoring in household living expenses, Social Security income, and the age at which individuals begin saving for retirement.
The study found that retirees in California need about $73,387 annually to cover basic living expenses. However, a more comfortable retirement lifestyle would require roughly $121,879 per year — even after accounting for Social Security benefits.
The report also highlighted the steep savings burden facing future retirees. Someone who begins saving for retirement at age 20 would need to set aside approximately $4,514 per month to retire comfortably in California by age 65. For those starting at age 30, the required monthly savings rises to about $5,804.
Without Social Security income, the required monthly savings increases further to roughly $5,436 for those starting at age 20 and $6,989 for those beginning at age 30.
The current average monthly Social Security Administration retirement benefit is about $2,079, or roughly $24,894 annually. Financial experts say that amount alone is not enough to support a stable retirement lifestyle in California.
Ted Jenkin said retirees must carefully consider state income taxes and property taxes when planning for retirement.
“In high-cost states like California and New York, retirees face significantly greater financial pressure because of both living expenses and taxation,” Jenkin said.
As a result, many retirees have increasingly relocated from high-cost states to areas with lower tax burdens. Florida, Texas, and Tennessee remain among the most popular destinations because they either have no state income tax or offer relatively lower tax burdens overall.
The report identified West Virginia, Mississippi, Louisiana, Arkansas, and Oklahoma as the least expensive states for retirement.
Despite its high costs, California continues to attract retirees because of its climate, healthcare infrastructure, and lifestyle advantages. Still, experts warn that those planning to retire in the state need a far more aggressive long-term savings strategy than retirees in lower-cost regions.
The report also emphasized the importance of starting retirement savings early. Analysts noted that consistent investing and saving beginning in one’s 20s can significantly reduce long-term financial pressure through compound growth, while delaying savings sharply increases the monthly amount required later in life.
