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How Much Do You Need to Retire in Arizona?

Table of Contents
Calculating Arizona Retirement Housing Utilities Groceries Insurance Retiring in Arizona: Total Savings   How Much Do I Need to Save? TLDR

If you haven’t started thinking about your plans for retirement, you probably should. It’s never too early to start saving for retirement, and the sooner you start, the sooner you’ll be able to kick back and enjoy the fruits of your labor. 

One of the most important factors in determining how much money you’ll need in order to be able to retire comfortably is where you plan to live. Cost of living varies wildly from state to state, depending on such factors as housing expenses, tax laws, and how much day-to-day necessities will cost you to obtain.

For example, living expenses in New York (where you not only pay sales and income tax, but housing tends to be quite a lot more expensive on average) are much higher than those in Tennessee, where there is no state income tax and housing is fairly cheap (unless you want to live in Nashville). 

If you have your heart set on retiring in Arizona, you’re in luck: on average, it’s a relatively cheap place to retire. Keep reading for a breakdown of various living expenses in the Grand Canyon State as well as an estimate of what you’ll need monthly to live comfortably there. 

Calculating Arizona Retirement

How much it costs you to retire somewhere is going to depend on how much it costs to live in that area. So, to help you get a sense for how Arizona stacks up in terms of cost of living compared to the national average, we’ve broken it down in a few key categories.


If you dream of retiring in Arizona, get your party hat ready: housing costs in Arizona are considerably lower than the national average. The median home price in Arizona is $266,000, whereas the national average is right around $309,000. 

Renting is also an affordable option in Arizona — you can expect to pay about $1,250 per month in rent, compared to the national average of just over $1,400 (or nearly $1,800 in states like California and Hawaii). 

Let’s assume, however, in the name of optimism and smart financial planning, that you’ll be owning your home during retirement. What’s the significance of the $53,000 difference in the cost of your house moving to Arizona as opposed to National Average-ville? 

Well, you can expect to pay about $1,700 per month for your Arizona mortgage, whereas the average homeowner pays just over $2,000 (and about $10,000 more in downpayment, too).


More good news for folks hoping to retire in Arizona: you can expect to pay less per month in utility bills than the average American. According to the Energy Information Administration (EIA), the average monthly electricity bill in Arizona in 2021 was $121, compared to the national average of $147. 

Savings on natural gas bills were similar: Arizona residents paid on average $46 per month in 2021; the national average, on the other hand, was $61. 

Arizonians even save on water (which may seem odd considering the state is basically one huge desert). The average water bill in the Grand Canyon State was $64 per month, whereas the national average was about $73. 


Even eating is cheaper in Arizona. According to the Bureau of Economic Analysis, the annual grocery expenditure for Arizona residents averages out to around $3,600, or about $300 per month. 

On the other hand, the US Bureau of Labor Statistics reports the national average grocery bill to be $371 per month.


Insuring  your property will cost you slightly less than average in Arizona as well. The national average annual homeowners insurance policy cost $1,383, according to In Arizona, however, homeowners pay an average of $1,216 per year. 

Whether you pay more or less than average for car insurance in Arizona is going to depend on how much coverage you want. Minimum coverage in Arizona averages out to approximately $579 per year, which is more than the national average of $545. Full coverage, on the other hand, will cost you $1,743 per year, which is $28 less per year than the national average of $1,771.

Retiring in Arizona: Total Savings  

Here’s the breakdown of how much you can expect to save per month, compared to the national average, if you end up retiring in Arizona: 

Expense Arizona National Average
Housing $1,700 $2,000
Utilities $231 $281
Groceries $300 $371
Insurance $145 $148
Total $2,376 $2,800
Potential AZ Savings $424 per month


As you can see, retiring in Arizona could feasibly save you around $424 per month on cost of living, depending on where else you might have been considering moving. There are certainly cheaper places you could choose to spend your twilight years, but you could do a whole lot worse. 

It’s also important to note that this table does not represent the full cost of living anywhere. We haven’t considered expenses which tend to be a bit more static, like phone and internet bills. 

According to the Council for Community and Economic Research, the average total monthly cost of living in Arizona in 2021 was $3,561 for a single person, whereas the national average was $3,758. These figures still point to Arizona being relatively inexpensive as a retirement destination, however the savings are smaller: $197 compared to $424. 

In terms of what the numbers look like for your specific retirement planning, you’re going to want to talk to a financial professional about that: which city in Arizona you choose to retire in and what kind of lifestyle you’re expecting to have are all going to have a major impact on your overall monthly expenses.

How Much Do I Need to Save?

So, how much money do you need to have saved in order to retire in Arizona? The general rule of thumb is to aim for having saved at least 8-12 times your current annual income by the time you retire. For example, if you are currently living on $60,000 per year, you should aim to have saved between $480,000 and $720,000 by the time you retire.

When trying to calculate how much money per month this type of savings will earn you, conservative estimates assume that properly invested money will grow at about 5% (historically, growth is closer to 10%). So, if you stash $600,000 before you plan to retire, that’s going to earn you about $30,000 per year, or $2,500 per month, conservatively. 

Obviously, the more you have saved, the more you’ll earn from your interest payments, and the more freedom you’ll have in your monthly budget for things like traveling abroad or dining out, regardless of where you choose to retire. 

There are, however, a few other considerations that might impact the amount of money you need to save up in order to retire other than where you’re living: 

Expected Retirement Income

Hopefully, you won’t have to rely solely on your savings in order to cover monthly expenses during retirement. If you’ve been working your whole life, you can — at the very least — expect social security payments. How much these payments amount to, however, will depend on your pre-retirement salary and how old you are when you choose to retire. 

The average social security payment is right around $1,500 per month. Certainly, this is not enough to live on alone, but it’s an important part of the puzzle. If you add that to the $2,500 from retirement investments, you’re at $4,000 per month — pretty close to the $5,000 you were bringing in monthly with your $60,000 salary and enough to cover the estimated average Arizona monthly cost of living. 

Depending on what line of work you were in, you may also receive a pension after you retire. Government jobs and those with strong union support often offer pensions. If you don’t know whether you have a pension or not, you probably don’t; but, it’s always worth checking with your employer to make sure you are accounting for everything.


How you plan to spend your retirement will also affect how much money you need to have saved. If you plan to travel or have other expensive hobbies, you’ll likely need to have saved more than someone who plans to live a more modest lifestyle.

Our estimate for monthly living expenses in Arizona does not account for flying to Ireland to visit your family, or buying seven grandkids PS 5s for the holidays. So, if you are expecting to have some abnormally large recurring expenses (like hospital bills, for example), you’re going to need a bit more room in your monthly budget. 

Speaking with a financial planner is the best way to ensure that you’re making plans that will allow you to maintain your lifestyle after retirement. 

Retirement Age

The earlier you retire, the more money you’ll need to have saved in order to sustain yourself throughout your retirement years (because you’ll be retired for longer). What’s more, certain retirement benefits, like social security payments, increase the longer you wait to take them out. 

Generally, the longer you wait to retire, the less money you’ll need to cover your retirement and the more you will have earned. So, if you can wait to retire, it may be a good idea to. You’ll not only have more money, but it will go farther. 


  • Retiring in Arizona is, generally speaking, less expensive than average. 
  • The Council for Community and Economic Research estimates the average total monthly cost of living in Arizona in 2021 at $3,561, which is lower than the national average of $3,758. 
  • In order to cover this monthly budget, you’ll want to have approximately $600,000 invested, plus around $1,500 per month from social security income. 
  • All of these figures are general and estimated; your specific situation is likely to be different. It’s always best practice to chat with a financial advisor when making plans for retirement to ensure you’re taking the right steps to plan for your future.


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