Most Americans are woefully underprepared for retirement. Based on analysis of Federal Reserve data by the accounting firm PwC, the typical American between the ages of 55 and 64 has just $120,000 in a retirement savings account. Though the vast majority of retirees supplement their savings with Social Security income, the average monthly Social Security payment is only $1,694 – not nearly enough to cover typical living expenses, let alone luxuries like travel and dining out. 

Partially as a result, the number of Americans working past retirement age is rising fast. Data from the Bureau of Labor Statistics shows that more than 26% Americans between ages 65 to 74 were still working in 2020, and that share is projected to hit 32% by 2030. In 1995, about 17.5% of Americans that age were working, and the percentage was even lower before that. 

For those who do not want to work past age 65 and still be financially secure, there is a certain amount of money they can expect to need. This amount should account for expenditures throughout retirement and can come from retirement savings or other sources of income.

Using data from the BLS, the Bureau of Economic Analysis, and the National Center for Health Statistics, 24/7 Wall St. determined estimated average expenditures throughout retirement in each state. We adjusted the BLS’s calculation of annual expenditures for 65 years and older residents in 2021 by the cost of living in each state and multiplied that figure by 18.5, the life expectancy at 65, to provide the amount of money the average retiree would spend throughout retirement. We also accounted for inflation and added 15% for a financial cushion. 

Based on these calculations, the typical 65 year old American can expect to spend just over $1.3 million in retirement. This amount can vary, from $1.1 million to over $1.5 million, depending on the state they live in. While some of these expenses are covered by Social Security, many of them require other income sources, such as investment income, a pension plan, or savings. (Here is a look at the 8 best investments for retirees.)

Older Americans on tighter budgets can save hundreds of thousands of dollars by residing in states with a low cost of living. In many Southern states, as well as several states in the Midwest, goods and services cost well below the national average – in some cases over 10% lower. Conversely, in certain states along the West Coast and in the Northeast, living expenses can be anywhere from 6% to 13% higher than the national average. (Here is a look at where retirees are moving.)

Click here to see what it costs to retire comfortably in every state.

Click here to read our detailed methodology.