7 Reasons You Need at Least $805K (Plus Social Security) To Retire in Colorado

Do you live in Colorado and plan to stay there when you retire? As the prices of homes and essentials continue to rise, Social Security benefits will not be enough for someone to be able to afford an average retirement in the state. Recent GOBankingRates data shows that you will need to have at least $804,814 in savings to cover a 20-year retirement in Colorado — here’s why.

Also here are nine places to retire that are like Colorado but way cheaper .

Find Out: 8 States To Move to If You Don’t Want To Pay Taxes on Social Security

Learn More: 7 Reasons You Shouldn’t Retire Before Speaking To a Financial Advisor

Money mistakes the super wealthy never make - that you might be doing now.

The Average Social Security Benefit Is Only $21,567 a Year

The median annual Social Security payout is $21,567 a year. Meanwhile, the national average cost of living in the U.S. is $57,818. This means that your average Social Security benefit will only cover around 37% of your annual expenses in the U.S., though some states are more or less expensive than average. You will need to have savings or some other form of income to cover the rest.

Try This: What a Middle-Class Social Security Check Could Look Like in 2025

Living in Colorado Is 7% More Expensive Than the National Average

The annual cost of living in the state of Colorado is $61,807, which is about 6.9% more expensive than the national average of $57,818. Once you subtract the average Social Security benefit, you get $40,240, which is how much you will need for each year of retirement in Colorado. This means that you will need to have at least $804,814 saved for a 20-year retirement. If you are planning for a 25- or 30-year retirement, then you will need to have $1,006,017 or $1,208,429 saved, respectively.

Groceries Are 3.8% More Expensive Here

Grocery prices are a bit higher in Colorado — an average of $4,979 per year, which is 3.8% more than the national average of $4,797. Groceries can be a good chunk of retirement expenses, but making sure you eat a good diet is an important part of staying healthy, so this might not be the best place to cost-cut aggressively. A good way to keep your grocery bills down is to look for sales, use coupons and buy commonly used items in bulk.

Housing Costs 17.1% More Than the National Average

Housing is the largest expense for most retirees and unfortunately, it is also the area where Colorado’s prices can be felt most. Housing in the state is 17.1% higher than what most people pay across the country. The yearly cost for a place to live averages $13,691, while the national average is $11,692.

If you’re looking to make the most of your retirement savings, you might want to think about moving to a less expensive area of Colorado or downsizing to a smaller house or apartment. Sometimes, smaller homes can also save you money on things like heating, cooling and maintenance.

Utilities Are 6.9% Below National Average

Good news here — utility costs in Colorado are lower than the national average by about 6.9%. The average yearly bill is $3,944, which is a bit easier on the wallet compared to the national average of $4,236. To save even more, you could look into energy-efficient appliances and make sure to turn off electronics when they’re not in use.

Transportation Costs 6.3% More

Getting around Colorado can be a bit more costly. Average transportation expenses for adults over 65 come out to $5,254, which is 6.3% higher than the national average of $4,943. Keeping your car in good shape with regular maintenance can prevent bigger repairs later on and help save money on gas too. If you’re in an area with good public transportation or community shuttle services, using these can be a great way to cut down on how much you spend on driving.

Healthcare Costs Almost the Same as the National Average

Healthcare here is almost in line with the national average of $7,540. It costs around 1% less, which comes out to an average of $7,465 a year. Healthcare is so important as you get older and it’s wise to make sure you have good insurance that covers what you need. Taking advantage of all the preventive care services your insurance offers can also help keep you healthy and avoid bigger bills down the road. Always compare prices for any new medications — sometimes, different pharmacies offer the same medicine at very different prices. This may be especially true if the pharmacy has a generic substitute for your medication.

^{Methodology: In order to find out exactly how much you need to retire in your state, GOBankingRates found the annual cost of expenditures for a retired person in each state by multiplying the 65-year and older expenditures from the U.S. Bureau of Labor Statistics 2022 Consumer Expenditure Survey by the cost-of-living index for each state from the Missouri Economic Research and Information Center’s Q3 2023 cost of living series. To find how much money a retired person would need to save, we divided each state’s annual expenditures, minus the annual Social Security income as sourced from the Social Security Administration’s Monthly Statistical Snapshot, March 2022, by 0.0333%, 0.04% and 0.05% assuming 20, 25 and 30 years of retirement, respectively. All data was collected and is current as of January 8, 2024.}

This article originally appeared on GOBankingRates.com : 7 Reasons You Need at Least $805K (Plus Social Security) To Retire in Colorado