Seniors may outlive their retirement funds in these 41 states

August 29, 2025

Retirement Shortfalls for Older Americans

A recent analysis reveals that older adults in 41 states could outlive their retirement savings.

Many Americans express concern about their financial future after retirement, with worries about running out of money outweighing fears of health issues, according to a report from the Transamerica Center for Retirement Studies.

The Average Retiree Faces a Significant Shortfall

A new report predicts that retirees could accumulate about $762,000 from Social Security and other income sources, yet face expenses totaling around $877,000. This results in an average shortfall of about $115,000.

Christine Healy, Senior Chief Growth Officer at a Senior Living Platform, emphasizes that where you retire can be just as crucial as how much you save for retirement.

The report examines state-specific data on retirement benefits, net worth, and life expectancy to estimate expected retirement costs. It’s apparent that many retirees rely on Social Security to cover their basics, but many believe they need to save over $1 million to ensure a comfortable retirement.

In states with lower living costs, savings are easier to grow. However, in places with high living expenses—like New York and California—those savings can dwindle quickly. Interestingly, Washington, Utah, Montana, and Colorado appear to provide some financial relief, balancing retirement income with manageable expenses.

States Where Seniors Are Likely to Fall Short

Ten states, including Washington, D.C., show particularly stark shortfalls:

New York: Expected income of $670,000 with expenses around $1.1 million, a shortfall of $448,000.
Hawaii: Income projected at $1.3 million, but expenses could reach $1.7 million, leading to a deficit of $417,000.
District of Columbia: With an average income of $736,000 and expenses of $1.1 million, the shortfall is approximately $407,000.
Alaska: Expected income of $712,000 against expenses of $1.1 million, falling short by around $342,000.
California: Projected income of $926,000 versus costs of $1.3 million, resulting in a shortfall of $337,000.
Massachusetts: Income expected at $1 million, with expenses at $1.3 million, a difference of $294,000.
Rhode Island: Income around $676,000 against expenses of $960,000, a predicted difference of $284,000.
Vermont: Incoming funds of $771,000 versus costs of $1 million, leaving a gap of $248,000.
Louisiana: Expected income of $479,000 with expenses of $724,000, creating a shortfall of $244,000.
Connecticut: Projected income of $851,000 against expenditures of $1 million, leading to a shortfall of $193,000.

States Where Retirees Might Find Surplus

On a brighter note, there are nine states where retirees can expect a surplus:

Washington: Income of $1.1 million, costs $989,000, surplus of $146,000.
Utah: Income around $944,000 with expenses at $873,000, creating a surplus of $121,000.
Montana: Average income at $863,000 against costs of $820,000, leaving a surplus of $43,000.
Colorado: Income expected to average $956,000, costs of $918,000, for a surplus of $38,000.
Iowa: Income estimated at $802,000 with expenses at $770,000, yielding a surplus of $32,000.
Minnesota: Expected income of $863,000 against expenses of $840,000, leading to a surplus of $23,000.
Maryland: Projected costs of $1 million against income of $993,000, a surplus of $13,000.
Kansas: Income of $755,000 and expenses of $746,000, resulting in a surplus of $8,000.
South Carolina: Expected income of $763,000 with expenses at $761,000, for a small surplus of $2,000.

Strategies for a Secure Retirement

Planning for a successful retirement involves careful consideration of how long you might live. The average life expectancy in America hovers around 78, but this varies. Many people reaching retirement age might expect even longer lives, which complicates budgeting.

To bolster savings, contributing actively to a workplace retirement program is crucial. Starting early and consistently saving a portion of income—ideally, at least 10%—is a strong strategy. It’s also wise not to dip into retirement savings for everyday expenses. Rather, setting up an emergency savings fund can help keep those funds intact.

When it comes to Social Security, delaying your claim can pay off. The longer you wait—up to age 70—the bigger your monthly check will be, which can significantly benefit your financial security in later years.