How Much a Single Retiree With an Annuity Needs by State

How much a single retiree needs for a comfortable retirement depends partly on where they live and how much income arrives from Social Security or an annuity. In a national estimate based on 2024 federal data, a typical retiree living alone needs about $898,000 invested after Social Security to support average annual spending of roughly $59,600.

What the estimate says about how much a single retiree needs

The national estimate starts with annual spending of about $59,600 for a single retiree age 65 or older. That figure includes discretionary costs such as travel, meals out, and entertainment, not just housing and other essentials. Actual spending differs by household and location, so the estimate is a benchmark rather than a personal budget.

Average annual Social Security benefits for a single person claiming at 65 are about $23,700 in this analysis. That covers roughly 45% of the modeled spending, leaving about $35,900 a year to come from savings, annuity income, or other sources.

The calculation uses the 4% rule, a retirement planning guideline that begins with withdrawals equal to 4% of the portfolio and adjusts the withdrawal each year for inflation. Dividing the $35,900 annual gap by 0.04 produces an estimated nest egg of about $897,500, rounded to roughly $898,000. A separate table in the underlying model lists $897,800 as the no annuity figure, reflecting a more precise calculation.

This is not a required account balance for every retiree. Someone with lower expenses, additional income, or a different withdrawal approach will have a different target. The estimate also does not guarantee that a portfolio will last for a particular number of years. It applies one spending estimate, one Social Security assumption, and one withdrawal guideline to compare scenarios.

Location changes the numbers substantially. The modeled annual spending for a single retiree ranges from about $49,000 in the least expensive states to more than $64,000 in the most expensive. Before deciding whether a national figure is useful, compare it with your own housing, health care, transportation, and discretionary spending.

$500 to $2,500 a month in annuity income changes the savings target

A $500 monthly annuity payment supplies $6,000 over a year. Under the 4% rule, that income replaces the amount a $150,000 portfolio would otherwise need to provide annually. The modeled amount that must remain invested therefore falls by $150,000 for each $500 of monthly annuity income.

The table shows the estimated invested balance remaining after an annuity has been purchased. These figures assume about $23,700 in annual Social Security benefits and do not include the lump sum spent to buy the annuity.

The pattern is straightforward: more monthly income reduces the modeled amount that needs to stay invested. A $1,000 payment lowers that balance by $300,000, from $897,800 to $597,800. A $2,000 payment lowers it by $600,000, to $297,800. These are arithmetic comparisons, not promises about a particular annuity contract or its cost.

The distinction between the remaining portfolio and total savings is central. Imagine starting with $700,000 and using $150,000 to purchase an annuity. The remaining investment balance would be $550,000, alongside the annuity payments. The analysis compares the $550,000 with its estimated remaining nest egg target; it does not treat the $150,000 purchase payment as money still available to invest or spend.

Nor does the table show that buying an annuity makes retirement cheaper overall. It shows how guaranteed or contracted monthly income, depending on the specific product, can change the amount that must be drawn from investments under this model. The purchase uses savings upfront. A retiree considering one needs to compare the income it would provide with the money no longer available for other expenses or investments.

There are no annuity quotes, interest rates, or fee figures in this analysis. The cost of a contract and its payment terms can vary with age, interest rates, payout duration, survivor coverage, inflation protection, guarantees, and other features. A monthly amount in the table is an assumed income level, not a quoted price or an offer available to every buyer.

Contracts can differ in when payments begin, how long they continue, what happens to a surviving spouse or beneficiary, and whether inflation protection or other guarantees are included. Fees, restrictions, and optional riders also vary. Those details affect the contract and its trade offs, so a headline monthly payment is not enough to compare two products. Review the actual terms and costs before deciding whether a quote fits your needs.

State costs alter the target even with the same annuity payment

In the state estimates, the no annuity savings target runs from about $643,600 in North Dakota to nearly $1.02 million in New Jersey, a difference of almost $375,000. The national estimate of roughly $898,000 sits between those endpoints, but it does not describe every local cost profile.

Because the model applies the same 4% calculation, each annuity income level lowers the invested target by the same dollar amount in every state. A $500 monthly payment cuts the target by $150,000; $1,000 cuts it by $300,000; and $2,000 cuts it by $600,000. Those reductions do not erase the gap between states because each starts with a different spending estimate.

With $1,000 a month in annuity income, the modeled balance still needed is about $718,000 in New Jersey and nearly as much in Hawaii. By comparison, the estimate is about $344,000 in North Dakota and $348,000 in Arkansas. The same monthly payment can therefore leave very different savings targets depending on where retirement spending is expected to occur.

At $2,000 a month, the remaining target ranges from about $44,000 in North Dakota to roughly $418,000 in New Jersey. Arkansas also falls below $50,000, while Hawaii, California, and Washington, D.C., remain above $400,000. The low end of this modeled range should not be read as a suggested amount to keep in reserve: it is the result of the model's assumptions, not a complete personal spending plan.

For a practical comparison, start with your own expected annual spending and subtract income you expect to receive, including Social Security. If you want to test an annuity scenario, subtract the assumed annual payment as well, then divide the remaining annual gap by 0.04 to reproduce the model's estimate. For example, $500 a month equals $6,000 a year; under this rule, it reduces the modeled savings target by $150,000.

Use that calculation as a way to compare scenarios, not as a quote or guarantee. Check that the budget includes the expenses likely to matter in your household, and distinguish the money needed to buy an annuity from the balance that remains afterward. If a proposed purchase would leave too little accessible savings for costs the contract does not cover, the table alone cannot resolve that risk.

How to use the figures before comparing annuity contracts

The estimates were built from 2024 federal data on housing, consumer spending, and regional price differences. For each state, the model estimated annual spending for a single retiree, subtracted about $23,700 in Social Security benefits and any modeled annuity income, then divided the remaining gap by 4%. The result excludes the lump sum used to purchase an annuity.

That method makes the assumptions visible, but it leaves important personal details out. It does not identify an annuity product, set a fee, or establish what a buyer would pay for a specific monthly benefit. It also does not tell an individual how much cash to keep available or whether the modeled spending level matches their plans.

• Build an annual spending estimate for your own household and location, separating essential costs from discretionary expenses.
• Check the Social Security income figure that applies to you rather than assuming the modeled average of about $23,700.
• Compare several monthly annuity income assumptions with the table, while keeping the upfront purchase amount separate from the remaining portfolio.
• Ask for contract details on payment timing, duration, survivor provisions, inflation protection, guarantees, fees, restrictions, and optional riders.
• Consider whether the money left outside the contract can cover expenses that are not included in its payments.

Because contracts vary and can involve committing a significant portion of savings, the modeled reduction in an investment target should not be treated as a recommendation to buy. A qualified financial professional can help review how a specific contract compares with a household's income needs and other retirement assets.