Retiring comfortably is slipping out of reach in many parts of the United States as soaring living costs and housing prices put unprecedented pressure on retirees’ savings. A recent A GOBanking Rates study found that in Hawaii—the nation’s most expensive state for retirees—basic expenses over 25 years total a staggering $2.21 million. This far outpaces the $1.6 million needed in high-cost states like Massachusetts and California.
In at least 15 states, you now need millionaire status just to cover fundamental retirement costs, a threshold driven by skyrocketing home values, healthcare, and daily essentials. As inflation and real estate prices continue to climb, retirees must plan carefully- or risk being priced out of the places they once dreamed of calling home. Here are 15 States where retiring is getting too expensive to afford.
Hawaii
Hawaii tops the list of states where retiring is becoming unaffordable, thanks to its sky-high cost of living and real estate prices. The median price for a single-family home in Honolulu reached $1,100,000 in 2024, and the average cost to live comfortably in the state is estimated at $120,000 per year for a single person.
Even with Hawaii’s relatively low sales tax and tax breaks for Social Security, retirees need at least $2 million in savings to maintain a comfortable lifestyle, according to CNBC. A $1.5 million nest egg would last just 17 years here, the shortest of any state in the nation. For most retirees, paradise comes with a price tag that’s simply out of reach.
Massachusetts
Massachusetts is increasingly out of reach for retirees due to its high cost of living, expensive housing, and rising healthcare costs. Annual living expenses for retirees average $65,117, making it the second most expensive state for retirement after Hawaii. The median home price in many communities exceeds $700,000, and only 44 affordable rental homes exist for every 100 extremely low-income households.
Two-thirds of residents who left Massachusetts cited affordability as their main reason, and experts now recommend $3 million to $4 million in savings for a comfortable retirement here. Even with world-class healthcare and cultural amenities, the Bay State’s financial demands are pushing retirees elsewhere.
California
California’s allure—sunshine, beaches, and vibrant cities—comes with a steep price for retirees. The cost of living is 38% higher than the national average, and housing costs are 97% above the U.S. norm, with median home values in many areas exceeding $800,000. Monthly payments for a mid-tier home now approach $5,900, an 84% increase since 2020.
Retirees need at least $1.6 million in savings to cover basic expenses, and even then, ongoing inflation and high taxes can quickly erode nest eggs. For many, California’s financial pressures outweigh its lifestyle perks.
Alaska
Alaska offers breathtaking scenery and no state income or sales tax, but the cost of living remains a major barrier for retirees. Housing costs vary, but in Anchorage, the typical home value is $392,717, and in Juneau, it’s $490,068—well above the national average. Heating and utility expenses are also high due to the harsh climate, and groceries often cost more because of the state’s remote location.
The annual Permanent Fund Dividend helps, but may not offset rising healthcare and travel costs for seniors. For those on a fixed income, Alaska’s unique benefits are often outweighed by its high day-to-day expenses.
New York
New York’s combination of high taxes, expensive housing, and elevated living costs makes it a tough choice for retirees on a budget. The cost of living in New York City is 37% higher than the state average and 78% above the U.S. average, with average rents exceeding $3,500 per month. The state’s tax burden is the highest in the country, consuming 12.47% of income on average.
Experts estimate retirees need over $1.5 million in savings for a comfortable retirement, and a $1.5 million nest egg would last just 29 years here, far less than in most states. Even with excellent healthcare and cultural attractions, New York’s affordability gap is widening for retirees.
New Jersey
New Jersey’s high property taxes, expensive healthcare, and overall cost of living make it one of the most challenging states for retirees. New Jersey has an average property tax rate of 2.23%, meaning a $300,000 home comes with a $6,690 annual tax bill. Forty-one percent of residents aged 50 and older have considered leaving the state for more affordable options.
New Jersey also ranks as one of the worst states for retiree affordability in some studies (ranked 46th), and nearly half of its residents want to move elsewhere. For many, the Garden State’s financial demands are simply unsustainable in retirement.
Vermont
Vermont’s scenic beauty and small-town charm are offset by a high cost of living and limited affordable housing. The average annual cost of living is $50,761, and the median home price is $339,100.
Only 47 affordable rental homes exist for every 100 extremely low-income households, and seniors on fixed incomes struggle to keep up with rising costs. State income taxes can reach as high as 8.75%, further straining retiree budgets. For those seeking affordability, Vermont’s expenses can quickly add up.
Washington
Washington’s booming economy has driven up housing prices and living costs, making retirement increasingly expensive. Redfin states that Seattle’s median home sale price reached $857K last month, a 1.4% increase from last year. Property taxes and healthcare expenses have also risen, squeezing retirees on fixed incomes.
Although Washington has no state income tax, the savings are often offset by high sales and property taxes. The state’s rapid growth has made it less accessible for retirees seeking financial stability.
Maine
Maine’s tranquil lifestyle and coastal charm are becoming harder to afford for retirees, thanks to rising housing and healthcare costs. Nasdaq statistics show that while the median household income is $73,733, the average retirement savings in the state is just $152,580, leaving many retirees financially stretched.
Housing shortages and increasing utility costs are making it difficult for seniors to age in place. Property taxes and healthcare expenses continue to climb, and affordable rental options are limited. For those on a fixed income, Maine’s cost pressures are making retirement less attainable.
Arizona
Arizona’s popularity as a retirement destination has driven up housing prices and living expenses, especially in cities like Phoenix and Scottsdale. The state’s cost of living is now above the national average, and median home prices have soared in recent years.
Healthcare costs and property taxes have also increased, putting pressure on retirees’ budgets. A growing population has led to higher demand and competition for affordable housing. For many, Arizona is no longer the budget-friendly haven it once was.
Rhode Island
Rhode Island’s small size belies its big retirement expenses, with high housing costs and above-average taxes. GoLocal Prov Business states that Rhode Island’s median home price is currently $470,000 and is projected to exceed $500,000. Rhode Island’s cost of living index consistently ranks among the highest in New England.
Healthcare and utility costs are also elevated, and property taxes can be burdensome for retirees. The state’s limited affordable housing options make it difficult for seniors to downsize. For retirees, Rhode Island’s financial barriers are increasingly hard to ignore.
Connecticut
Connecticut’s affluent reputation comes with a hefty price tag for retirees, including high property taxes, expensive healthcare, and costly housing. CT Mirror states that home values in other Connecticut metros ranged from $320,000 to $350,000 and rose over 7% from 2022 to 2023, outpacing the 2.4% national increase.
State income taxes and other fees further erode retirees’ savings. Many seniors find it difficult to keep up with rising costs, and affordable housing is in short supply. Connecticut’s financial demands are pushing more retirees to seek alternatives.
New Hampshire
New Hampshire’s lack of a state income or sales tax is offset by high property taxes and rising living expenses. NH Business Review reports that NHAR’s April trends show the median price for a single-family home has risen to $525,000, 13.7% higher than in April 2023.
Healthcare and long-term care expenses are also on the rise, straining retiree budgets. The state’s popularity as a retirement destination has increased competition for affordable housing. For many, New Hampshire’s financial realities are making retirement less feasible.
Oregon
Oregon’s natural beauty and vibrant cities are increasingly out of reach for retirees due to soaring housing costs and high state income taxes. Redfin reports that homes in Portland sold for a median price of $510K, and the city’s overall cost of living is 17% above the national average.
Property taxes and healthcare expenses continue to rise, adding to retirees’ financial burdens. State income taxes can also significantly reduce retirement income. For those on a fixed budget, Oregon’s affordability is slipping away.
Utah
Utah’s rapid population growth and booming economy have led to rising housing prices and living costs, making retirement more expensive. The median home price in Salt Lake City now exceeds $500,000, and utility and healthcare costs are climbing.
Property taxes remain moderate, but the overall cost of living is above the national average. Increased demand for housing has made it harder for retirees to find affordable options. For many, Utah’s financial landscape is becoming a barrier to a comfortable retirement.
Disclaimer – The Finance Key does not provide and does not intend to provide financial, investment, tax, or legal advice. Information contained in this article is for informational and educational purposes only. This list is solely the author’s opinion based on research and publicly available information. The inclusion of links to third-party content is not an endorsement by The Finance Key of such content or services. Please do your due diligence and use your discretion.
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