For most retirees, the best part about retirement is not needing to report to work five days per week.
Because, ideally, you’ve reached a point where you have a retirement portfolio that can cover all of your living expenses.
Of course, the greatest fear of most retirees is that their money won’t last the duration of their entire retirement. And the biggest reason for that is because the cost of living in some places around the U.S. has become significantly higher than it used to be.
That’s why I decided to dig into data from the U.S. Bureau of Labor Statistics combined with data from the Missouri Economic Research & Information Center to determine exactly which states have the highest cost of living across different fields such as housing, groceries, utilities, transportation and healthcare.
In this article I share the 23 states with the highest overall cost of living and thus the states where retirees run out of money the fastest.
Some of the states on this list might be obvious (hey there, California) but several of the states on this list caught me by surprise.
23. Nevada
Coming in at number 23 on the list of states where retirees run out of money the fastest is Nevada.
Nevada has costs that are above the national average in healthcare, transportation, housing and groceries, which explains why it made the list.
Even if you avoid spending money in Las Vegas on the weekends, Nevada isn’t the easiest state to retire in if you’re concerned about cost of living.
22. Idaho
Next up on our list is Idaho.
Despite having low utility costs (due to cheap electricity generated from all the hydroelectric power from the local rivers) the costs for healthcare, transportation, housing and groceries are all above the national average.
For retirees who want their money to last for their entire retirement, Idaho isn’t among the best states to make that happen.
21. Utah
Next up on our list is Utah.
Fascinatingly enough, Utah actually has below-average costs in most of the major cost categories we considered, but housing is the one thing that is not cheap in Utah.
With housing costs at well over 10% of the national average, Utah doesn’t make it easy for retirees to buy a home at affordable prices.
20. Florida
Coming in at number 20 on our list is Florida.
With above-average housing, grocery and healthcare costs, Florida has plenty of sunshine but not plenty of low-cost living.
Of course, the actual cost of living varies greatly based on which particular city you choose to live in, but overall Florida isn’t the friendliest state to the wallets of most retirees.
19. Virginia
Next up on our list is Virginia.
The mean reason that Virginia makes the list is due to above-average housing costs.
If you look at the trend in home values in Virginia, you’ll notice one thing: prices have only gone up and up and up over the last decade.
If you’re looking to settle down into a nice home for retirement in Virginia, you may want to think again because the exorbitant housing costs alone are enough to put a dent in the retirement portfolio.
18. Colorado
Coming in at number 18 on the list is Colorado.
The Centennial State has above-average costs in healthcare, housing and groceries with housing accounting for the largest cost for individuals who choose to live there.
If you’re seeking a state with a low cost of living in retirement, Colorado should not be at the top of your list.
17. Delaware
Next up on the list is Delaware.
The average household expenditure here is over $80,000 and housing, groceries and healthcare costs are all above the national average.
For a retiree who wants their dollar to stretch the furthest, Delaware is another state that tends to put a dent in the retirement portfolio.
16. Arizona
Coming in at number 16 on the list is Arizona.
The biggest reason Arizona made the list? Housing prices.
With a median single-family home price of $470,000, Arizona has become an extremely expensive state to buy a home in.
This makes it pretty obvious why most retirees don’t have Arizona as their top destination for retirement.
15. New Hampshire
Next up on our list is New Hampshire.
With healthcare, transportation, utilities, and housing costs all well above the national average, New Hampshire is not a retirement-friendly state at all.
With a median-single family home costing over half a million dollars in New Hampshire, this is not a feasible location for most people to retire if they want their retirement portfolio to last for the long haul.
14. Montana
Coming in at number 14 on our list is Montana.
It’s a beautiful state to visit, but it does things that are not so beautiful to the average retirement portfolio.
Sporting above-average costs in healthcare, transportation, housing and groceries, Montana is another state that drains the back accounts of retirees.
13. Oregon
Next up on our list is Oregon.
This is another state where the median single-family home price is well over half a million dollars and the overall living expenses here have skyrocketed over the past decade.
Simply put, Oregon should not be a retirement destination for most people if they want their retirement portfolio to last.
12. Rhode Island
Coming in at number 12 on the list is the smallest of all the states: Rhode Island.
With above-average costs in every single category that we looked at, The Ocean State is an expensive place to live for retirees.
It’s undeniably beautiful in the summer months, but for most people the beauty that if offers with views of the ocean aren’t enough to outweigh the fact that it’s so pricey.
11. Vermont
Next up on the list is Vermont.
The biggest reason Vermont ranks poorly on our list is the exorbitant housing costs.
In addition, it also sports above-average healthcare, transportation and utility costs, making it an unattractive place for most retirees to live in.
10. Washington
The award for the number 10 spot on our list goes to the state of Washington.
The average household expenditure here approaches $90,000, housing has become extremely expensive (especially in the larger cities) and other living expenses are just as high.
Washington is another state that is capable of draining a retirement portfolio fast.
9. Connecticut
Coming in at number 9 on the list is Connecticut.
Healthcare, transportation, housing and grocery costs are all well above the national average in this state.
The median single-family home price is about $466,000 and the cost of living in each of the categories we tracked isn’t going down anytime soon.
This is another state where retirees are unlikely to see their retirement portfolios thrive due to the high cost of living.
8. Maine
Next up on the list is Maine.
Although it’s an undeniably beautiful state, it has become extremely expensive in recent years.
With housing costs alone at 34% above the national average, this state has become a tough place for retirees who are dependent on a combination of social security and passive income from a retirement portfolio.
7. New Jersey
Coming in at number 7 on the list is New Jersey.
With above-average costs in all of the categories that we considered, The Garden State is a tough place to reside in if you want your money to last in retirement.
In particular, housing costs are 44% above the national average, making this a wildly expensive place to live for most retirees.
6. Maryland
Next up on the list is Maryland.
Similar to the other states that rank poorly on this list, Maryland has above-average costs for every category we tracked.
With average annual household expenditure at over $93,000, this is simply a tough place for retirees to stretch their dollars.
5. New York
The number 5 position on our list goes to New York.
The biggest reason is due to the housing costs, which are 72% higher than the national average.
While New York might be a great place to earn money when you’re younger, it’s not a great place to spend retirement if you want to avoid having your retirement portfolio eaten alive by the expenses of living here.
4. Alaska
Next up on the list is Alaska.
For anyone who has lived in this state for any amount of time, this won’t come as a surprise. Things are expensive here.
From utilities to groceries to housing, everything costs more in Alaska, which makes it one of the least desirable places for most people to retire in.
3. California
Coming in at number three on our list is California.
It’s not much of a secret that everything is more expensive in California compared to the rest of the nation.
And it’s not hard to understand why – the weather simply can’t be beat. But there’s a steep price to pay for retirees for this good weather.
If you’re looking for a place where your retirement portfolio can survive for a stretch of several decades, California should not be at the top of your list.
2. Massachusetts
Coming in at number 2 on the list is Massachusetts.
This may come as a surprise to some people to see this state ranked so poorly on our list, but the main reason is due to the fact that the median single-family home price has jumped up to $750,000 in recent years.
When you combine this with the other above-average expenses of healthcare, utilities, transportation and groceries, Massachusetts is a brutal state to live in for retirees in terms of cost of living.
1. Hawaii
And the number one spot on our list goes to none other than Hawaii.
It’s no secret that Hawaii is an expensive place to live but in particular the housing costs are what make it an unaffordable place for most retirees.
Utilities and groceries are also well above the national average, giving Hawaii the crown for the state that is most capable of draining a retirement portfolio as fast as possible.
Where Will You Choose to Retire?
There are many factors that you’ll take into account when you choose to retire and the cost of living won’t be the only factor but it will certainly be one to consider.
Retirement should be a time where you can experience peace of mind rather than worry over the cost of living and whether or not your retirement portfolio will actually survive over the course of several decades.
For retirees who want to live in places with low costs, the states on this list should be avoided.
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