Most Expensive Cities to Retire: Where $1 Million Isn’t Enough (And Where it Is)

One state has 12 of the 20 most expensive metro areas for retirement, where a nest egg much larger than $1 million is needed for a comfortable retirement

“California Dreaming” of retirement? Hope you have well over a million dollars socked away, or that dream might be more of a nightmare.

A new study from Lending Tree found that it takes more than $1 million to retire with an average lifestyle in nearly 40% of the 384 U.S. metros studied—or in 147 of them. And 12 of the 20 metros that require the biggest nest eggs for retirees are in California.

According to LendingTree senior economist Jacob Channel, many factors contribute to how expensive a metro is. “Ultimately, each metro is unique and will have its own quirks that can make it more or less expensive,” Channel says.

“Simply put, California is a very attractive state for a lot of people,” Channel says. “The climate is generally agreeable, there is a lot of variety in terms of the geography that one can experience within the state (from beaches to mountain ranges), and there are a lot of stable (and often high-paying) jobs to go around. Owing to how appealing California is, many people want to live there. This means there is less housing supply and other resources, and the cost of living is higher. For many retirees, this higher cost of living can be well worth it, even if it requires more savings.”

The state is also highly regulated, which can drive up prices for certain factors that contribute to the cost of living. For example, California is second only to Hawaii among gas prices as of Jan. 18, according to AAA.

Nationally, the latest LendingTree study found retirees would need an average nest egg of $1,071,127, and the average annual spending for retirees came out to $54,979. And there is only one metro where you can retire with an average lifestyle for less than $800,000, which will be revealed later in this article.

To calculate the amount of retirement assets required to retire in each metropolitan statistical area (MSA), LendingTree analysts performed two separate calculations.

The first took the estimated annual expenditures of retirees in each MSA and calculated the pretax amount. Lending Tree then subtracted the average annualized Social Security retirement benefit for each state to determine the remaining income retirees would need, on average, to maintain that level of spending. Average Social Security benefits were calculated as the averages the Social Security Administration reported for 2021 (the latest available), plus the cost-of-living adjustments for 2022 and 2023. They then divided that amount by 4% to apply the “4% rule” to calculate the necessary assets required to meet the average spending level.

For the second, Lending Tree subtracted each state’s average Social Security benefit from the estimated median earnings for full-time workers ages 55 to 64 and then applied the 4% rule. For full methodology, see the full study findings.

What follows is a list of the 10 most and 10 least expensive metros to retire based on Lending Tree’s study.

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