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How much do you need to retire in Massachusetts?
Experts say it depends on lifestyle and location — but for most people, it will take millions.
Figuring out how much money you’ll need to retire is anything but simple. It depends on your lifestyle, your salary, and even your health — factors that can shift dramatically over time. Add in rising costs for medical care, energy, food, and everyday expenses, and the math gets even murkier.
Tack on Massachusetts’ notoriously high price tag as ranking as the second most expensive place to live in the country, and it’s no wonder many residents feel daunted by the idea of saving enough to stop working.
To help make sense of it all, Boston.com spoke with Mark Williams, a finance professor at Boston University Questrom School of Business, about what it really takes to retire in Massachusetts — and why, for most people, the number likely starts in the millions.
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“A million sounds like a lot,” said Williams. “‘I’m a millionaire!’ Divide by 30 years, that’s $33,000 a year. Divided by 12, that means you’re only getting $2,700 a month. Divide that by four, that means you’re only getting $600 a week … So are you a millionaire?”
Questions to ask yourself:
To help estimate what you need to retire, Williams suggests asking yourself these five questions:
- What will be your anticipated annual expenses at retirement?
- In what state do you want to retire?
- At what age do you want to retire?
- How long do you expect to live?
- Is your goal to have your retirement funds fully depleted or outlive you?
Rules to follow:
To forecast what you need to retire, Williams says, take your last pre-retirement year’s salary and times it by 10.
If you are 30, it can be hard to predict what your final-year salary will be. But there are online calculators to help you figure it out.
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For example, if you are currently earning the median salary in the state, $81,170, and assuming a 3% raise each year, your future salary at 65 (again, if you’re 30 now) would equal $228,401. Using this rule, this person would need $2.28 million at retirement.
For the median household income in the state of $104,828, assuming a 3% raise each year, with a future income at 65 equaling $294,971, that family would need close to $3 million at retirement.
As a guide, here is the size of retirement funds one should aim to save in terms of their annual salary:
Age = the size of the annual salary
25 = .5x
30 = 1x
35 = 1.5x
40 = 3x
45 = 4.5x
50 = 6x
55 = 7.5x
60 = 9x
65 = 10.5x
(When you are 40, you should have about three times your salary saved in retirement funds.)
Forecasting expenses:
As a rule of thumb, Williams says, you need 25 times your annual out-of-pocket expenses to meet your retirement needs. To maintain your standard of living, you need at least 80% of your pre-retirement income per year.
For example, if your pre-retirement annual expenses are $80,000, you will need $64,000 to meet annual expenses. Using this expense number and applying it to the rule, you would need $1.66 million to cover your retirement expenses.
If your average expenses were higher —let’s say $120,000 per year —you would need to save $3 million to cover your costs in retirement.
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So, even planning for a modest retirement in Massachusetts, one still needs to save millions, which many may not be able to achieve. (A 2025 Boston Indicators report found that 80% of low-income older adults in the state do not have enough assets to meet their basic needs and age in place.)
What state do you want to retire in?
If you are planning to stay put in Massachusetts, it might cost you.
According to Salary.com, the cost of living here in 2025 is 49% higher than the national average. Housing costs alone are 109% higher, equating to about $2,508 per month on average here for a single person or $4,598 per month for a family of four.
Food expenses run 15% above the national average here, at $460 per month for an individual, while utilities, transportation, and health care costs are 16.1% higher, or about $1,016 per month combined for one person.
Maybe consider moving to Arkansas, Mississippi, or South Dakota, which have the lowest cost of living in the country, according to U.S. News. In an outmigration report, Williams found that those aged 55 to 64 are the third largest group in the population leaving the state, but the largest by adjusted gross income.
However, if you work in Massachusetts before retirement, it ranks second highest in per capita income.
At what age do you want to retire?
There are many factors to consider, Williams said, including financial savings, health condition, family obligations, and level of work satisfaction.
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Other things to consider include the start dates of Social Security and Medicare eligibility. Social Security offers minimum benefits at 62, with the full benefit age not until 67. Some people also defer receiving monthly Social Security benefits to maximize their benefit at 70.
The average Social Security benefit is $23,000 annually, or about $2,000 per month. Social Security determines retirement benefits based on work and earnings history, according to the Center on Budget and Policy Priorities. Which, for many, is not enough to live off alone.
To estimate your take-home pay, you can visit the government’s Social Security website.
In addition, Medicare eligibility doesn’t start until age 65, which can help plan for health insurance costs.
How long do you expect to live?
How does one know? But living 15 years past retirement vs. 35 years significantly impacts the level of savings required.
Massachusetts longevity data shows that men who retire at age 65 can expect to live 18 more years to 83, while women can expect to live 21 more years to 86.
Longevity rates are also influenced by socioeconomic factors, with a UMass study showing that lower earners tend to die nine years sooner than those with higher incomes. Family history, using the ages of deceased relatives such as grandparents and parents, can also serve as a baseline measurement.
Do you want to leave anything behind?
If you plan to set aside an inheritance for family members or make a contribution to nonprofits, you will need to set aside more funds.
Williams noted the “time value of money,” emphasizing that you should start saving young to build up funds.
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As Williams said, “The more you save today, the better your retirement future will be.”
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