Retirement savings could go substantially further in some parts of the U.S. than others, according to a new analysis that found retirees in Alaska, Maryland, Virginia, and several other states are projected to retain the most wealth by the end of a typical retirement.
The new study conducted by IntegraCredit, which modeled retirement finances from age 67, found wide state-by-state differences in the amount households could have left by age 79. Alaska topped the ranking with $286,000 remaining, while Indiana was at the bottom with $84,747: a difference of more than $200,000.
The results were largely driven by differences in retirement income. Nationally, the average retiree household receives around $27,617 per year and begins retirement with a median net worth of $342,383, according to the research. Over 13 years, total spending was estimated at $524,682, leaving the typical household with $176,722 at age 79.
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Americans are living longer, meaning retirement savings increasingly need to cover more years of expenses. U.S. life expectancy reached a record 79 years in 2024, while someone who reaches 65 can now expect to live another 19.7 years on average, according to the Centers for Disease Control and Prevention (CDC).
That longevity can turn retirement into a two-decade, or longer, financial commitment, increasing the risk that savings are depleted by healthcare, housing and other ongoing costs, particularly for households whose retirement income already falls short of spending.
States Where Retirees Have the Most Left
Alaska ranked first in the state analysis, with average retirement income of $36,023 a year and a projected $286,000 remaining at age 79.
Maryland followed closely at $282,217, while retirees in Virginia were projected to retain $276,679. California ranked fourth with $269,282 remaining and Colorado fifth at $238,628.
Those states generally had some of the highest retirement incomes in the study. Annual retirement income ranged from $32,379 in Colorado to more than $36,000 in Alaska, giving households more money to offset their expenses over the 13-year period examined.
Matt Frankel, a certified financial planner and contributing analyst at The Motley Fool, said two factors help explain the state-level differences: income and taxes.
“The states at the top of the list tend to have higher average incomes, both for working people and retirees,” he told Newsweek. “They also tend to have favorable tax treatment, especially when it comes to retirement income.”
However, Frankel cautioned against interpreting the rankings simply as a measure of where it is cheapest to retire.
“There’s a big caveat though—many of the states with the highest retirement incomes also tend to be the most costly to live in. In other words, although incomes are lower, a dollar tends to go further in West Virginia than say, California.”
The study’s state calculations apply the same $524,682 total spending figure across the states, meaning the rankings primarily reflect differences in retirement income rather than state-specific living costs.
Where Retirement Wealth Is Lowest
At the opposite end of the ranking, Indiana had the lowest projected remaining wealth at age 79, at $84,747. Average retirement income there was $20,542 per year. West Virginia followed with $92,235 remaining, while Arkansas had $103,272. Iowa retirees were projected to have $107,705 left, Kansas $120,523 and Mississippi $121,212.
Annual retirement income in many of the lower-ranking states was below $23,500, leaving households with less incoming money to cover the spending assumed by the model.
That income-spending imbalance is also evident at the national level. At age 67, the study found a typical household has around $27,600 in annual retirement income but spends approximately $57,800, producing an initial yearly shortfall of $30,201. Even after major expenses such as mortgage payments end around age 68, annual spending remains close to $37,000, leaving a gap of nearly $9,500.
“It tells us that most retired households enter retirement with an income-stream problem, and the main reason is insufficient retirement savings,: Frankel said. “With the average retiree’s income about $27,600 and the average Social Security benefit accounting for the majority of that, it’s a savings problem.”
The Risk of Living Longer
Where a retiree lives is only one factor determining how long their money lasts. The study found that the average household would still have $176,722 at age 79, but that balance continues declining if retirement extends well beyond average life expectancy. Under the model, savings are exhausted by age 98, when the typical household moves into a $5,089 deficit. By age 100, that deficit reaches $24,227.
Brian Schmehil, a certified financial planner and managing director of wealth management at The Mather Group, said households should plan for a range of possible outcomes rather than relying on a single estimate of how long retirement will last.
“The level of concern is relative to each individual’s financial situation,” he said. “The first step is to build a comprehensive financial plan that accounts for a range of scenarios and potential outcomes, including the possibility of living longer than expected.”
He said retirees with greater flexibility may have options such as downsizing, relocating to a lower-cost area or selling a second home if their savings begin to run short.
Frankel likewise warned that average life expectancy is not necessarily a useful endpoint for retirement planning.
“The average life expectancy is a bad number to plan around. You don’t insure your home for the average number of catastrophic losses—you do it to plan for all possible scenarios. Approach retirement planning with that in mind.”
Contact Newsweek editor for this story: Ben Kelly and Robert Greenall