When you reach retirement age in California, whether you plan to live in a major city like San Francisco or Los Angeles or in a smaller coastal town, your retirement planning needs to include a significant savings cushion. The more you save, the better, even if you expect to retire a significant portion of your retirement income. Any financial advisor will tell you that California is one of the noble destinations when saving for retirement.

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Your retirement savings plan is critical to your financial future, so knowing how much you need to set aside will help when planning your salary budget. GOBankingRates recently conducted a study to determine the minimum savings you need in each state to retire, plus Social Security retirement benefits.

The overall cost of living statistics were based on factors ranging from utilities to healthcare. Here are some key findings:

• The national average Social Security income is $21,567. It’s always good to compare how far your benefits will get you in California, as this state can come with inflated property tax rates, health insurance, cost of living, and more.

• The minimum savings required for a 20-year California retirement: $1,145,940

• The minimum savings required for a 25-year California retirement: $1,432,425

• The minimum savings required for a 30-year California retirement: $1,720,630

Here are four reasons why you must have at least $1.1 million saved, plus your Social Security benefits, if you plan to retire in the state of California.

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4 Reasons Social Security and $1.1 Million Can Only Get You 20 Years of California Retirement

Whether you’re reaching full retirement age of 65 or hoping to retire early, living in California after your working life is over will require you to start saving seriously. Let’s take a closer look at some of the reasons why.

1. Affordable housing is simply a Californian dream

Housing costs in California are astronomical. Whether you’re looking to rent or buy, real estate comes at a price. GOBankingRates found that you’ll have to pay nearly $22,530 per year for it.

Current trend: If you have $1 million in retirement savings, you can withdraw this much per year

2. The prognosis for healthcare, food and electricity bills is not rosy

• Average annual health care costs: $8,226.14

• Average annual additional costs: 5,201.81 USD

• Average annual food costs: 5,387.03 USD

The story continues

Food costs are high, air conditioning is necessary, and without health, you are nothing. Therefore, when calculating your monthly budget, it is essential to pay for your healthcare, utilities, and grocery bills. Even if you are eligible for Medicare, expect to pay about $8,226 per year for healthcare. Utilities also max out at $5,202 per year, and your grocery bills total about $5,387 per year on average.

3. Car costs can hurt your automated savings

You may imagine your retirement in California as a scene from a movie where you drive down Route 66 with the top down. But even short commutes can add up when you factor in rising gas prices and unexpected car maintenance costs. GOBankingRates estimates that the average annual transportation cost in California is about $6,283.

4. Life here costs a lot – before and after social security

• Average annual cost of living: $78,863.75

• Average annual cost of living after deduction of social security: 57,296.99 €

• Minimum amount for 20 years of retirement: 1,145,940 USD

• Minimum amount for 25 years of retirement: $1,432,425

• Minimum amount for 30 years of retirement: $1,720,630

There are so many higher-than-average costs in California that Social Security generally doesn’t provide as much money for retirement as you might hope. Even without the income tax, Social Security only reduces the average cost of living of $78,684 per year to about $57,297, which for many people can be more than they earn on their salary.

The bottom line is that retiring there isn’t exactly a California dream, but it does require significant financial investment, planning and savings. If you retire at 65, $1.1 million will only last until you’re 85 and $1.7 million until you’re 95. Since you want to live a long and stress-free life in retirement, the more you save now, the less you’ll have to do later.

Methodology: To find out exactly how much you’ll need to retire in your state, GOBankingRates determined annual expenses for a retiree in each state by multiplying expenses for those 65 and older from the 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 cost of living series for Q3 2023. To find out how much money a retiree would need to save, we divided each state’s annual expenses minus annual Social Security revenue from the Social Security Administration’s March 2022 Monthly Statistical Snapshot 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.

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This article originally appeared on GOBankingRates.com: Retiring in California: Why It Costs $1.1 Million (Plus Social Security)