This Is How Much It Costs for a Senior to Live Independently in Every U.S. State | The Motley Fool

Most retirees live on Social Security and money from investments, so making sure retirement account balances don't run out is essential. That's why it's so important to assess the cost of living when deciding where to retire or whether your savings will last in a current location.

The price of the basics can vary dramatically from one state to another, so whether you're currently retired or are thinking about leaving the workforce soon, it's a good idea to know how much necessities will cost in your preferred location. The chart below, based on research from University of Massachusetts Boston, will help you figure that out.

Here's what seniors need to cover the basics throughout the U.S.

University of Massachusetts researchers estimated the cost for senior renters to cover the basics in every state. Essential expenses included in the calculation include housing; food; transportation; healthcare; and some miscellaneous spending. Here's how much they found a single senior would need in every state in the U.S.

Will you have enough to live where you'd like?

First and foremost, it's important to realize the average Social Security benefit won't give you enough to cover the basics in any U.S. state. The average benefit in 2020 is just $1,503 per month or $18,036 per year; even in the cheapest state, a single senior renter would need $21,504. So there would be a shortfall.

That means no matter where you'll spend your senior years, you need some savings to provide income outside of what your retirement benefits provide. You can figure out how much by finding out your projected Social Security income (which can be found on your online account) and subtracting it from the elder index in your area.

So if you lived in Montana and expected to receive Social Security benefits of $1,300 a month or $15,600 annually, you'd subtract that amount from $23,040. Your savings would need to produce $7,440 in income. If you plan to follow the 4% rule, multiply that number by 25 to see you'd need a nest egg of at least $186,000. And that's just to cover the barest of necessities. If you want to travel or enjoy life, you'd likely need much more.

Investing for your future ensures you can cover your costs

When your retirement nest egg is small, you may need to relocate to a lower cost-of-living area in retirement. But if you make sure to save and invest throughout your career, hopefully you'll have enough to cover the basics -- and then some -- in whatever area you want to call home.