Finance

Understanding Retirement Costs for Couples Across U.S. States

authorBy Morgan Housel

DateAug 17, 2026

Read time2 min

When planning for retirement, the choice of location significantly impacts the financial resources required. A recent analysis indicates that the average American couple, aged 65 or above, requires around $1.16 million in savings to enjoy a comfortable retirement. This national average, however, masks considerable state-by-state variations, with the necessary nest egg ranging from approximately $800,000 in the most affordable states to about $1.33 million in the priciest regions, representing a difference of over half a million dollars.

For a typical retired couple, annual expenditures are roughly $84,000, which is substantially more than the $60,000 spent by a single retiree. This amount supports a comfortable lifestyle that includes leisure activities such as travel, dining, and entertainment, rather than a basic budget. On average, combined Social Security benefits cover about $37,700 annually, or 45% of these expenses, leaving a gap of approximately $46,000 that must be covered by personal savings. Applying the conventional 4% withdrawal rule, this gap translates into the need for about $1.16 million in savings. This sum is notably less than the $1.46 million Americans believe they need, according to a recent Northwestern Mutual study, suggesting a potential discrepancy between perception and reality. The amount needed can also fluctuate based on whether one or both partners have earned full Social Security beneficiary status.

The most expensive places for retired couples, such as New Jersey, Hawaii, California, and Washington, D.C., demand savings upwards of $1.32 million. Conversely, more affordable states, primarily located in the Plains and Appalachia, like North Dakota, Arkansas, and Mississippi, require around $800,000. These cost disparities are largely driven by housing expenses, which constitute about 27% of a couple's retirement budget. Although daily goods and services show less variation across states, consumer prices in places like Hawaii can be 6% higher than the national average, while South Dakota enjoys costs about 7% lower. This analysis considers average spending patterns for couples over 65, including discretionary outlays, offset by Social Security income, but excludes factors like state income taxes on retirement income, potential long-term care costs, and local property tax exemptions for seniors, which can vary greatly by individual circumstances.

Achieving a financially secure retirement for couples in the United States requires careful planning, with geographic location playing a pivotal role in determining the necessary savings. By understanding how housing costs, Social Security benefits, and everyday expenses vary across states, individuals can make informed decisions that align with their retirement goals. This detailed insight into the financial landscape empowers couples to strategically prepare, ensuring a more relaxed and comfortable post-employment life regardless of their chosen domicile.

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