5 States to Stretch Your Retirement Money (and the 5 Hottest)

Where you live plays a big role in how well your retirement savings will fare. Between varying tax rates, housing markets and cost of living differences, your property can be a powerful wealth-building tool or a drain on your nest egg.

A recent analysis by GOBankingRates analyzed retirement readiness across the country to see which states are giving residents the best chance for success and which are failing.

To determine the rankings, the researchers analyzed the average retirement savings balance in each state, which was given the most weight in scoring. They also included the total annual cost of living, state and local tax rates and whether the state pays Social Security benefits.

Here’s how the top states stack up, followed by the worst-ranking states.

Top 5 States for Retirement Readiness

If you’re looking for a place where your savings can last longer, you might want to check out these states, according to the analysis:

• New Hampshire: The Granite State ranks high thanks to a combination of high savings and low taxes. The average retirement savings balance here is an impressive $512,000.
• Alaska: Although the weather here can be cold, the financial climate is warm for retirees. Alaska ranked second with an average savings balance of $503,000 and the lowest state and local tax rate.
• Delaware: Known for not paying taxes, Delaware sits in third place. It has an average savings balance of about $454,000 and favorable tax conditions for retirees.
• Oregon: This Pacific Northwest state is ranked fourth. Residents here managed to stash away an average of $452,000 in their most recent years.
• Virginia: In the top five, Virginia residents have a solid average savings of nearly $493,000, which helps reduce the average cost of living.

5 lower regions

On the other end of the spectrum, some states present a serious financial challenge to retirees. High costs of living and low savings rates have pushed these states down the rankings.

Here are five below:

• Rhode Island: This small state has big expenses. With Social Security taxes and a high cost of living, Rhode Island comes in fifth at No. 46. The average retirement savings balance in the Ocean State is $393,000.
• North Dakota: Despite the low cost of living, North Dakota ranks low for the smallest average savings balance of about $319,000.
• New York: High taxes and the cost of living pushed New York to No. 48. The average retirement savings of $382,000 struggles to keep up with annual expenses.
• In Hawaii: It may be paradise, but it comes with a high price. Hawaii has a high cost of living — more than $104,000 a year for homeowners — which puts a strain on the average savings of $366,000.
• Utah: The Beehive State ranked last in retirement readiness. It has the lowest average retirement savings balance in the nation at just over $315,000 and is one of the states that pays the Social Security tax.

Check Your Readiness

Whether you live in a high-end area or need a little more budget, the most important thing is your plan. Knowing the average cost and savings in your area can help you adjust your strategy to ensure you have the comfortable retirement you deserve.