HR News: Retiring at 40? Here’s How Much You Need by State

A recent study by Falcon Funded analyzed how much money is needed to retire at age 40 in each U.S. state using the 4% rule, which assumes retirees can safely withdraw 4% of their savings annually. For each state, the annual cost of living was estimated by combining monthly living expenses, average rent for a one-bedroom, and healthcare costs. 
 

State	Monthly Cost of Living per Person (without rent)	Average Monthly Rent (one bedroom)	Annual Healthcare Cost	Annual Cost of Living without Rent	Annual Cost of Living with Rent	Average house price (per Square Meter)	Life Expectancy by State	Quality of Life Index	Average Monthly Salary	Money You Need to Have to Retire After 40	Money You Need to Have to Retire After 40   (without Rent)	4% Rule for Withdrawals
New York	$1,676	$3,886	$14,007	$34,119	$80,751	$12,887	79	58.2	$5,270	$3,149,289	$1,330,641	$2,018,775
Massachusetts	$1,466	$3,382	$13,319	$30,910	$71,490	$5,861	80	60.5	$5,621	$2,830,998	$1,224,028	$1,787,246
California	$1,314	$2,504	$10,299	$26,065	$56,113	$6,965	78	51.8	$4,647	$2,149,126	$998,274	$1,402,824
Hawaii	$1,585	$2,188	$10,291	$29,313	$55,563	$8,181	80	48.5	$4,188	$2,216,980	$1,169,605	$1,389,085
Washington	$1,492	$2,280	$9,265	$27,170	$54,530	$5,630	78	49.8	$4,110	$2,072,138	$1,032,468	$1,363,249
Illinois	$1,306	$2,361	$10,190	$25,858	$54,189	$3,359	77	55.6	$5,160	$2,010,424	$959,347	$1,354,733
New Jersey	$1,305	$2,048	$11,868	$27,532	$52,108	$5,606	79	59.6	$5,719	$2,032,206	$1,073,742	$1,302,696
Connecticut	$1,428	$1,829	$12,489	$29,625	$51,573	$2,666	79	53.4	$3,853	$2,021,662	$1,161,300	$1,289,325
Vermont	$1,344	$1,810	$12,756	$28,887	$50,607	$3,441	78	54.5	$4,472	$1,923,075	$1,097,715	$1,265,181
Pennsylvania	$1,382	$1,780	$11,603	$28,187	$49,546	$2,371	76	58.3	$4,151	$1,783,644	$1,014,732	$1,238,642

Retiring at 40 in New York calls for $2,018,775, the highest savings requirement of any state. Sky-high rent averaging $3,886/month and healthcare costs of $14,007/year push annual expenses above $80,000, making early retirement here the most expensive nationwide.

In Massachusetts, early retirement demands $1,787,246, placing it second overall. Rent and healthcare costs are both high – $3,382/month and $13,319/year respectively – but the state also has the highest quality-of-life index, making it a trade-off between cost and livability.

With a required savings of $1,402,824, California ranks third, thanks to a combination of high rent ($2,504/month) and solid but not extreme healthcare costs ($10,299/year). Its total annual living expenses come in at just over $56,000.

Hawaii takes the fourth spot, with $1,389,085 needed to stop working at 40. Despite perceptions of unaffordability, its lower rent ($2,188/month) helps offset other higher island-related costs, keeping it just below California in terms of savings needed.

Washington ranks fifth, with an early retirement target of $1,363,249. While not among the highest in any single category, its rent ($2,280/month) and living expenses add up to a steady pressure on savings.

Illinois comes in sixth, requiring $1,354,733, despite a lower monthly cost of living ($1,306) and comparable rent to Washington ($2,361/month). Healthcare costs of $10,190/year also play a role in pushing its total upward.

New Jersey’s early retirees need $1,302,696, ranking the state seventh. With $2,048/month in rent and healthcare costs nearing $12,000/year, it sits in the upper-middle tier for total savings required.

Connecticut lands in eighth place, requiring $1,289,325. Though rent is relatively modest at $1,829/month, the state’s $12,489/year in healthcare costs makes a notable impact on its retirement figure.

Ninth-ranked Vermont calls for $1,265,181 in savings, making it one of the more affordable states in the top ten. Rent averages $1,810/month, and while healthcare is on the higher end, lower day-to-day costs keep the total reasonable.

Pennsylvania rounds out the list with the lowest requirement: $1,238,642. With $1,780/month rent and overall annual living expenses under $50,000, it offers the most financially accessible path to retiring at 40 among the top states analyzed.

Nathan Nolan, a spokesperson from Falcon Funded, commented on the study: “A person aiming to retire at 40 needs to think far beyond lifestyle goals – they need to think geographically. Housing remains the biggest driver, but healthcare and quality of life metrics also shift the savings target dramatically from state to state. Even small differences in monthly expenses can add up to hundreds of thousands in retirement savings over time.” 

Access the full research findings here.
 

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