A new study shows that retirees in 41 U.S. states and Washington, D.C. are likely to outlive their savings, with California ranking fifth worst nationwide. According to a report released by the Seniorly Resource Center on July 18, the average retirement savings shortfall in California is $337,000—well above the national average.
The report warns that even the commonly cited “magic number” of $1.26 million for retirement may no longer offer financial security. Rising costs for housing, healthcare, and basic living expenses are rapidly eroding retirement funds. On average, there is a $115,000 gap between what retirees expect to spend and their combined income from Social Security, savings, and investments.
Only nine states showed a surplus in projected retirement funds. Washington led with a $146,000 surplus, followed by Utah ($121,000), Montana ($43,000), and Colorado ($38,000). Iowa, Minnesota, Maryland, Kansas, and South Carolina also made the list, though with smaller margins. In contrast, New York ranked worst, with an average deficit of $448,000. Other high-gap states included Hawaii ($417,000), Washington, D.C. ($407,000), Alaska ($342,000), and California ($337,000).
Concerns about retirement funding aren’t limited to current retirees. The study found that 40% of baby boomers believe they may outlive their savings. That concern rises sharply among younger generations, with 57% of millennials, 56% of Gen X, and 51% of Gen Z saying they expect to face retirement shortfalls.
The cost of living plays a major role in these disparities. Hawaii is the most expensive state to retire in, requiring an estimated $1.74 million over a typical retirement span of 20 to 30 years. Massachusetts ($1.31 million) and California ($1.26 million) follow. By contrast, retirees in Oklahoma and Mississippi may need less than $650,000—making them among the most affordable retirement states.
“Today’s retirement often spans two to three decades,” the report notes. “Even well-planned savings can run dry quickly due to rising housing, healthcare, and food costs. Just one unexpected expense—like a medical bill or home repair—can shake an entire financial plan.”
To address these risks, the Seniorly Resource Center recommends five key planning strategies. First, individuals should use retirement budget tools to estimate how long their savings will last based on location, lifestyle, and personal spending. Second, retirees should avoid relying on averages and instead customize their plans—potentially even relocating to a lower-cost area. Third, maximizing Social Security and managing taxes and Required Minimum Distributions (RMDs) can stretch resources further. Fourth, preparing for the unexpected through long-term care insurance and maintaining emergency funds is essential. Lastly, the report encourages open dialogue with financial advisors or family members to ensure that savings align with long-term goals.
“Whether you’re planning your own future or helping a loved one make retirement decisions, understanding the cost of living and financial readiness can make a major difference in achieving an independent and dignified life,” the report states. “Choosing where to retire matters now more than ever.”
