The Only 9 States Where Retirees Likely Won’t Run Out of Money

It's something many people wonder: "Will I have enough savings to last through retirement?" Where you live could have a big impact on the answer to that question and on how solid your overall retirement plan really is.

According to a recent study by Seniorly.com, the state in which you live plays a part in how long your retirement dollars can last. Using government data, the study compared projected retirement income, living costs, and life expectancy to determine whether the typical 65-year-old will retire with a financial cushion or a shortfall.

Surprisingly, Seniorly found that retirees in only nine states are more likely than not to outlive their savings. Is yours on your list?

To determine where retirees are most and least likely to outlive their savings, Seniorly focused on key economic and demographic factors, such as life expectancy, retirement income, and living expenses.

Their researchers used data from the Centers for Disease Control and Prevention (CDC), the Social Security Administration (SSA), and the U.S. Census Bureau to project the number of years a 65-year-old can expect to live in retirement, as well as their likely income from all sources.

The Pacific Northwest, Mountain West, and parts of the Midwest and East Coast made the "safe" list. In Washington, for instance, seniors can expect to finish retirement with about $146,000 in their pockets. Over nearly a 20-year retirement, they'll likely need around $985,000 to cover living expenses but are projected to bring in $1.13 million in income.

Here's where retirees are projected to end up with a surplus:

1. Washington: $146,000
   
2. Utah: $121,000
   
3. Montana: $43,000
   
4. Colorado: $38,000
   
5. Iowa: $32,000
   
6. Minnesota: $23,000
   
7. Maryland: $13,000
   
8. Kansas: $8,000
   
9. South Carolina: $2,000
   

And some states pose especially tough challenges for retirees. New York ranks last in the nation, with seniors facing the biggest financial gap. Over the course of a 20-year retirement, New York seniors will need about $1.12 million to cover living expenses. However, they're only expected to bring in around $670,000 from Social Security, savings, and other income sources. That leaves a shortfall of $448,000, the largest in the country.

Here are the nine states where seniors are most likely to outlive their savings, ranked by the estimated deficit:

1. New York: $448,000
   
2. Hawaii: $417,000
   
3. District of Columbia: $407,000
   
4. Alaska: $342,000
   
5. California: $337,000
   
6. Massachusetts: $294,000
   
7. Rhode Island: $284,000
   
8. Vermont: $248,000
   
9. Louisiana: $244,000

The key data points in Seniorly's study are income, expenses, and projected lifespan beyond age 65. Therefore, states with a favorable combination of high retirement income, low cost of living, and a moderate life expectancy tend to offer the best prospects for a financially secure retirement.

For example, Washington tops the list because retirees there often have above-average incomes paired with manageable living costs. On the flip side, New York's high cost of living erases the benefits of relatively high retirement income.

To determine if you will have enough savings to last during your retirement years, start by estimating your expected income from all sources. This includes Social Security, pensions, savings accounts, and other assets.

Next, create a detailed budget of your anticipated expenses in retirement. You'll also have to factor in the cost of living in your area. Finally, consider your life expectancy and plan for a retirement that could last 20, 30, or even longer years.

Seniorly.com's study of retirement savings and surpluses in each state highlights the importance of where you decide to spend your golden years, a factor often overlooked. While it makes sense that states with a lower cost of living tend to see savings last longer, the cushion can be surprisingly small. For example, South Carolina is in the top nine, but with a razor-thin surplus of $2,000.

Taking the time to review your finances and look for ways to maximize your senior benefits can help stretch your dollars further and give you more confidence that your savings will support you throughout retirement.