A recent study found that Californians would need to save a staggering $2.3 million to retire comfortably for 20 years. This breaks down to an annual amount of $162,045. To reach this comfortable retirement threshold, individuals would need to start saving early.
Those starting at age 20 would need to save $4,334 a month. For those starting at age 30, the required monthly savings rises to $5,573. The latest figures show that the average annual household income in California stands at $130,718 in 2024, with the median income at $91,905.
California ranks second only to Hawaii, which requires $3,105,384 for a 20-year comfortable retirement. The analysis found that in 23 states, over $1 million in savings is necessary for a comfortable retirement. The top 5 most expensive states for retirement are:
1.
Hawaii: $3,105,384
2. California: $2,340,510
3. Massachusetts: $1,977,309
4.
california’s retirement savings challenge
Washington: $1,749,300
5. New Jersey: $1,567,009
On the other hand, the least expensive state for retirement is West Virginia, where researchers calculated that $434,501 would suffice for 20 years.
The 5 least expensive states are:
1. Oklahoma: $539,812
2. Louisiana: $499,020
3.
Arkansas: $489,937
4. Mississippi: $442,620
5. West Virginia: $434,501
The findings are based on a retirement age of 65 and a life expectancy of 85.
Researchers used data including cost of living figures from the Bureau of Labor Statistics and the Missouri Economic and Research Information Center. The retirement estimates also factored in monthly Social Security payments. The study stresses the importance of starting to save for retirement early.
The amount needed varies greatly depending on the state, with a difference of over $2.6 million between the most and least expensive states.
