The $109K Retirement Gap — State-By-State Breakdown
A few weeks ago, we looked at Fidelity’s latest retirement analysis that showed, despite all the market volatility, most retirement savers did exactly what advisors hope they would: they stayed the course, which led to savings rates reaching record levels.
But saving is only part of the equation. The next question advisors need to consider is whether those savings will actually be enough to carry clients through retirement, and new data suggests the answer may depend heavily on where they live.
The average 65-year-old is projected to face a $109,000 shortfall between what they’ll receive from Social Security, savings and investments, and what they’ll spend on necessities over a typical retirement. Even more striking, retirees in 41 states are projected to outlive their financial resources.
Location plays a surprisingly large role. Data from CareScout estimates that New York retirees face the largest projected gap, at $471,000, while Washington retirees have the biggest projected cushion, at $276,000. The difference reflects more than just income or savings, it’s the cumulative impact of housing, healthcare, groceries and other costs during retirement.
| Rank | State | Expected Shortfall |
|---|---|---|
| 1 | New York | -$471,000 |
| 2 | District of Columbia | -$432,000 |
| 3 | California | -$395,000 |
| 4 | Alaska | -$350,000 |
| 5 | New Mexico | -$277,000 |
| 6 | Louisiana | -$241,000 |
| 7 | Arkansas | -$237,000 |
| 8 | Vermont | -$232,000 |
| 9 | Kentucky | -$209,000 |
| 10 | Rhode Island | -$200,000 |
| 11 | Massachusetts | -$190,000 |
| 12 | Arizona | -$163,000 |
| 13 | Mississippi | -$160,000 |
| 14 | Oklahoma | -$147,000 |
| 15 | Alabama | -$136,000 |
| 16 | South Carolina | -$127,000 |
| 17 | Nevada | -$125,000 |
| 18 | Missouri | -$124,000 |
| 19 | West Virginia | -$114,000 |
| 20 | Ohio | -$113,000 |
| 21 | Oregon | -$111,000 |
| 22 (tie) | North Carolina | -$104,000 |
| 22 (tie) | Texas | -$104,000 |
| 24 | Connecticut | -$97,000 |
| 25 | Wisconsin | -$90,000 |
| 26 | Delaware | -$87,000 |
| 27 | Indiana | -$76,000 |
| 28 | Georgia | -$69,000 |
| 29 | Hawaii | -$58,000 |
| 30 | South Dakota | -$56,000 |
| 31 | Kansas | -$55,000 |
| 32 | North Dakota | -$50,000 |
| 33 (tie) | Michigan | -$48,000 |
| 33 (tie) | Virginia | -$48,000 |
| 35 | Maine | -$44,000 |
| 36 | Wyoming | -$38,000 |
| 37 | Iowa | -$32,000 |
| 38 | Pennsylvania | -$31,000 |
| 39 | Tennessee | -$23,000 |
| 40 | Florida | -$20,000 |
| 41 | Illinois | -$19,000 |
| 42 | New Jersey | -$398 |
The state-by-state breakdown is worth noting for several reasons. A portfolio that looks sufficient on paper can have a very different trajectory depending on where a client lives, particularly as expenses rise with age.
That could also make relocation a more important part of retirement planning. Clients may think about moving for weather, family or taxes, but the cost of living can change how long their assets last. The analysis even found that in just the past year, some states moved from projected shortfalls to surpluses, highlighting how quickly the retirement equation can change.
For advisors, the takeaway is to make retirement planning less about a single savings number and more about the variables surrounding it. Where will clients live? How might their spending change with age? What happens if healthcare or long-term care costs are higher than expected?
Retirement confidence often comes from seeing how the numbers hold up under different scenarios, not simply reaching a savings target.
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