Retirement Retired Life

7 States Where Retirees Say They're Running Out of Money Faster Than Expected

Even with strong savings, you may be falling short in high-cost states.

By Chris Lewis, CEPF , Edited by Laura Hohenstein

Updated May 14, 2026

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A 2025 analysis from Seniorly uncovered a troubling reality for older Americans. Retirees in 41 states and Washington, D.C., are projected to outlive their savings.

The numbers don't lie. The average 65-year-old can expect roughly $762,000 in total lifetime retirement income from Social Security, savings, and investments. However, total retirement expenses average $877,000, resulting in a national shortfall of roughly $115,000.

You may think this is only a problem in traditionally expensive places, but the data reveals a more nuanced situation. Even high-income states are seeing massive gaps. Higher earnings during working years often lead to higher fixed costs (from housing to health care) that don't magically shrink in retirement.

Here are the seven states where that gap is hitting senior benefits and savings the hardest.

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New York

Projected shortfall: $448,000

New York tops the list with the largest retirement gap in the country. Retirees are expected to bring in about $670,000 in lifetime income, but need closer to $1.12 million to cover expenses.

The main issue is housing. Even outside New York City, property taxes, rent, and the general cost of living remain high. Since retirement is now expected to last over 20 years, New York's above-average health care costs also compound the gap over time.

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Hawaii

Projected shortfall: $417,000

Hawaii is the best example of why income alone doesn't cut it. Retirees actually have the highest projected lifetime income in the U.S. ($1.32 million), yet still fall dramatically short because total costs are $1.74 million.

The reasons for this situation are two-fold. Hawaii has extremely high daily living costs, and also the longest average retirement at 20.6 years. Seniors fund up to four more years of expenses than those in lower-cost states.

Washington, D.C.

Projected shortfall: $407,000

In the nation's capital, the shortfall is caused by a combination of the high cost of living and longer life expectancy. While seniors bring $736,000 in income, they're expected to spend $1.14 million.

Even well-prepared retirees struggle to keep up with housing, health care, and everyday expenses, which consistently rank among the highest in the nation. The result is a sizable gap that continues to widen throughout retirement.

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Alaska

Projected shortfall: $342,000

Its geography heavily influences Alaska's retirement math and cost of living. Seniors' projected income is $712,000, but their expenses top $1 million.

In Alaska, everyday essentials, such as utilities and groceries, are significantly more expensive than in the lower 48 states. Health care access can also be limited and costly, particularly in more remote areas, adding another layer of financial strain.

California

Projected shortfall: $337,000

With $926,000 in projected income vs. $1.26 million in costs, California's shortfall comes as no surprise. The state's biggest pressure point is housing, regardless of whether retirees own or rent. Property values, maintenance costs, and insurance all remain high. Add in above-average health care expenses and taxes, and even seniors with strong savings find their money depleting faster than expected.

Massachusetts

Projected shortfall: $294,000

Massachusetts is a good example of a high-income state where savings don't go far. Retirees bring in over $1 million in projected retirement income, which sounds comfortable until you factor in total costs exceeding $1.31 million.

The gap is largely driven by health care and housing, both of which rank among the highest in the country. Longevity also plays a role, as New England residents tend to live longer than average.

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New Jersey

Projected shortfall: $61,000

New Jersey frequently ranks among the worst states for retirement affordability, and this analysis shows why. Retirees have $968,000 to budget for retirement, but their costs are expected to reach $1.03 million.

The state combines high living costs with a steep tax burden, including one of the highest personal income tax rates in the U.S. Even retirees with solid savings can struggle to offset the ongoing drain of housing costs, property taxes, and health care.

States where the shortfall is still severe (but not the highest)

Not every state with a major retirement gap cracks the top tier. In several other high-cost states, retirees are still projected to fall significantly short, despite less extreme gaps than the worst offenders.

In Connecticut, high property taxes and the overall cost of living continue to erode retirement budgets. Even well-prepared retirees face ongoing pressure from housing expenses.

Maryland faces a similar challenge, particularly in areas near Washington, D.C., where health care costs and general living expenses are high. Longer life expectancies in the region also mean retirees need to stretch their savings over more years.

Meanwhile, Oregon has emerged as a newer affordability concern. Rapidly rising housing costs and health care expenses, especially in urban areas, are pushing retirement spending higher and shrinking the margin for error.

Bottom line

The growing retirement shortfall is more about where you choose to live than how much you save. As more retirees run into this gap, migration patterns are already shifting. Many are relocating to the Midwest and Southeast, where lower housing costs, taxes, and everyday expenses make it easier to stretch retirement dollars.

Analysts expect that trend to accelerate as more baby boomers retire and confront the same circumstances. In high-cost states, even large budgets may not be enough for a stress-free retirement, so picking the right destination is more important than ever.

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