The Only 8 Western States Where Retirees Likely Won’t Run Out of Money

For most retirees, one of their biggest fears is running out of money. A new study ranked all 50 states by long-term financial security, comparing expected retirement income with lifetime expenses. Nationally, most states show a significant shortfall. But a handful leave the average 65-year-old with a surplus, and a number of others help you stretch your retirement dollars further.

This study shows clearly that where you live matters as much as your savings rate. If you're thinking about retiring in the West, then these are the states that could help you make your retirement savings last.

1. Washington

Washington leads the nation for retirement staying power with a projected $146,000 surplus. No state income tax helps, but so does a cost profile that's more manageable outside the priciest metros. Property tax is also pretty low, averaging around 0.76%.

Housing is a little pricier than in some states, with a typical home costing $595,271, so right-sizing is important. But for many households, that cushion means there's more room in the budget for health care, housing, and a rich, enjoyable lifestyle.

2. Utah

Utah lands near the top thanks to a combination of relatively strong retirement incomes and moderate statewide costs. The study estimated the average retirement surplus for Utah at $121,019, indicating that expected lifetime earnings versus expenditures leave a substantial cushion for emergencies and lifestyle choices.

Housing costs are generally more modest than in coastal areas, so each dollar stretches further. The typical home value is $529,260, and the property taxes are an incredibly low 0.47%. Plus, health care costs are reasonable. That's key in a state like Utah, with a high life expectancy, since a longer retirement magnifies the impact of small budget wins. Taxes can vary by income and situation, but many seniors still come out ahead after comparing total income and likely expenses.

3. Montana

Montana offers a smaller but still meaningful projected surplus for the typical retiree of $43,279. Although property taxes are higher than in some neighboring states, at around 0.83%, they're still significantly lower than in coastal states. Additionally, the moderate average home price of $459,819 provides retirees with ample room for right-sizing if they choose to relocate.

The state's everyday costs are more modest once you get away from the busier and costlier locations, and statewide, are well below the national average in every category, from health care to housing and utilities. The cost of living is relatively stable outside of these expensive zones. You'll still want to plan for medical needs and travel distances in such a rural state, but the baseline math works in your favor.

4. Colorado

Colorado is the final western state in the retirement surplus group, with a projected overage of around $38,000 per person. The property market can be costly, with a typical home value of $541,198 across the state. However, away from the pricier areas, homes are more affordable, and the below-average property taxes of just 0.45% make ongoing home costs more manageable compared to many other states.

There are also significant tax breaks for retirees in Colorado that help make your savings go further. Plus, while sales tax is comparatively high, medicines and groceries are exempt, reducing costs for residents of all ages.

5. Idaho

While Idaho doesn't technically have a typical retiree savings surplus, it remains a good choice for retirees seeking to make their money last. This is, in part, due to its moderate average property value of $467,605, which is significantly lower than many retiree-friendly towns. The low effective property tax rate of just 0.48% also helps to keep costs in check.

Plus, in Idaho, Social Security benefits aren't taxed at the state level. Day-to-day living is also more affordable than in many other states, with Idaho coming in significantly below the national average in key areas, including groceries, health care, insurance, and utilities.

6. Wyoming

Wyoming may not have a projected earnings versus lifetime expenditure surplus, but it does help retirees keep costs down as it has no state income tax on wages, Social Security, or retirement income. This makes it a popular retirement destination for individuals who plan to work at least part-time after retirement, as the absence of state tax on earnings provides their budget with more breathing room. Additionally, IRA/401(k) withdrawals are safe from state-level taxation.

Property taxes are modest at around 0.55%, and, if you pick a location outside of hot markets, home prices are modest, with an average across the state of $366,565, which is only slightly above the U.S. average of $363,505. Statewide, costs tend to be around 5% lower than the national average, so you'll make some savings there, too.

7. Nevada

Nevada is another state with no income tax and an effective property tax rate of just 0.49%. Although sales taxes tend to be on the higher side, retirees generally find the trade-off worthwhile once they compare their total bill to that of states that impose income tax. Especially as Social Security is also exempt from state-level tax.

One thing to note about Nevada is that property costs vary significantly between hotspots like Reno and Las Vegas, as well as their suburbs, and quieter small towns like Carlin or Tonopah.

8. Arizona

Arizona is a great retirement destination for sun-seekers who need to make their retirement budget stretch. This state doesn't tax Social Security benefits, so you keep more of your money. Additionally, this state has a low effective property tax rate of 0.44%.

Popular retiree suburbs typically offer lower home prices than the larger metropolitan areas. For example, the typical property price in Phoenix is $408,114, but in the retirement-friendly Safford, the average cost is $281,407. Statewide, the cost of living is slightly higher (6%) than the national average; however, the trade-off with tax breaks, low property taxes, and affordable property prices still makes Arizona a solid choice for retirement.

Bottom line

Only four Western states — Washington, Utah, Montana, and Colorado — show a projected surplus for the average retiree in terms of lifetime income versus expenditure. But there are also a handful of other states west of the Mississippi where you can afford a comfortable retirement without running out of money.

Plus, you can maximize your retirement savings by trimming unnecessary expenses and dialing in a cash buffer before you relocate. Also, be sure to research essentials such as the cost of living, available tax breaks for retirees, and Homeowners Association (HOA) fees.