77-Year Gap Between the Best & Worst U.S. States: Planning for retirement is one of the most important financial decisions a person can make. But where you live can make or break your retirement savings. A new study has found a 77-year difference in how long $1 million lasts in retirement, depending on the state you choose. While some states allow retirees to stretch their savings for more than 20 years, others see funds depleted in under a decade.
This guide explores which U.S. states are the best and worst for retirees based on cost of living, tax policies, healthcare expenses, and climate considerations.
77-Year Gap Between the Best & Worst U.S. States
| State | Years $1 Million Lasts | Cost of Living Index | Tax Friendliness | Healthcare Quality | Climate Considerations |
|---|---|---|---|---|---|
| West Virginia | 20.3 years | Low | Moderate | Lower Rankings | Moderate |
| Mississippi | 19.5 years | Low | Moderate | Lower Rankings | Warm, Humid |
| Arkansas | 17.5 years | Low | Moderate | Lower Rankings | Warm, Humid |
| Hawaii | 9.6 years | High | High | High Rankings | Tropical |
| California | 12 years | High | High | High Rankings | Mild, Varied |
| New York | 13.7 years | High | High | High Rankings | Cold Winters |
Your $1 million retirement savings will last twice as long in some states compared to others. If you’re looking to maximize your retirement income, choosing a low-cost, tax-friendly state with affordable healthcare is crucial.
The best states for retirees on a budget include West Virginia, Mississippi, and Arkansas, while the worst states for retirement savings are Hawaii, California, and New York.
By making informed decisions about where to retire, how to optimize healthcare costs, and where to find the best tax benefits, you can ensure your savings last for decades.
Why the 77-Year Gap Exists
1. Cost of Living
The biggest factor in how long your $1 million retirement savings will last is cost of living. This includes housing, food, healthcare, and transportation.
- Low-cost states like Mississippi and West Virginia allow retirees to stretch their savings longer.
- High-cost states like Hawaii and California have significantly higher housing and daily expenses, which eat into savings quickly.
2. State Taxes on Retirees
Not all states treat retirement income the same:
- No state income tax: Florida, Texas, Nevada, and Wyoming do not tax retirement income, helping savings last longer.
- Tax-heavy states: California and New York tax Social Security, pensions, and investments, reducing retirees’ disposable income.
3. Healthcare Costs
Healthcare is one of the biggest retirement expenses:
- Best for affordable healthcare: Florida, Colorado, and Tennessee offer lower insurance premiums and affordable prescription drugs.
- Most expensive healthcare: Massachusetts, Connecticut, and California have higher Medicare costs and out-of-pocket expenses.
Best States for Retirees on $1 Million
1. West Virginia – Best Overall
- Years $1M Lasts: ~20.3 years
- Why? Lowest cost of living, affordable housing, and moderate taxes.
- Healthcare Rating: Below average, but improving.
2. Mississippi – Low Cost & Tax-Friendly
- Years $1M Lasts: ~19.5 years
- Why? Low property taxes, affordable groceries, and healthcare.
- Downside: High poverty rate, limited public healthcare facilities.
3. Arkansas – Good Balance of Cost & Lifestyle
- Years $1M Lasts: ~17.5 years
- Why? Affordable housing, lower taxes, and outdoor lifestyle.
- Climate: Warm, humid summers; mild winters.
Worst States for Retirees on $1 Million
1. Hawaii – Most Expensive
- Years $1M Lasts: ~9.6 years
- Why? Highest housing and food costs in the U.S.
- Pros: Beautiful scenery, world-class healthcare.
2. California – High Costs, High Taxes
- Years $1M Lasts: ~12 years
- Why? High state income tax, expensive real estate.
- Pros: Great weather, high healthcare quality.
3. New York – Tax & Cost Burden
- Years $1M Lasts: ~13.7 years
- Why? High property taxes, expensive rent.
- Pros: World-class healthcare, cultural activities.
Tips to Make $1 Million Last Longer in Retirement
1. Choose a Low-Cost State
- Relocating to states with no income tax (Florida, Texas, Nevada) saves thousands annually.
- Look for affordable housing markets in states like West Virginia or Arkansas.
2. Optimize Your Healthcare Costs
- Enroll in Medicare Advantage Plans for lower premiums.
- Move to states with strong healthcare systems and affordable insurance.
3. Consider Downsizing
- Selling a large home in an expensive state can free up cash.
- Buy a smaller, energy-efficient home in a lower-cost state.
4. Look for Senior Discounts & Benefits
- Many states offer senior property tax exemptions.
- AARP discounts reduce travel, grocery, and healthcare costs.
FAQs On 77-Year Gap Between the Best & Worst U.S. States
Q1: Which states have no taxes on retirement income?
Florida, Texas, Nevada, Washington, and Tennessee have no state income tax.
Q2: How can I reduce my retirement expenses?
Move to a low-cost state, use senior discounts, and opt for Medicare Advantage.
Q3: What is the biggest retirement expense?
Housing and healthcare make up over 50% of retirement spending.
Q4: What’s the best state for retirees who love warm weather?
1. Florida (no state income tax, warm winters).
2. Arizona (affordable housing, dry climate).
Q5: Should I retire in California or New York?
Both states have high taxes and living costs. If affordability is key, consider Florida or Texas instead.
