Retirement Shortfall Hits Workforce: 41 States Face $109K Gap per Employee

Human resources teams are on the front lines of a silent crisis: nearly every state in America faces a situation where employees reaching 65 will run out of retirement money—a projected $109,000 shortfall according to a new CareScout Analytics study. As the workforce ages and lifespans lengthen, financially unprepared employees may stay on the job longer, blocking career paths for younger workers and driving up employer-sponsored benefit costs. Forward-thinking HR departments can no longer ignore retirement planning as a core component of employee financial wellness.

A sweeping new study by CareScout Analytics reveals that the average 65-year-old American retiree will burn through their retirement savings and income with $109,000 left unpaid—a gap that spans 41 states and the District of Columbia. The projection compares expected lifetime spending against what Social Security, pensions, and nest eggs can realistically deliver, and it lands at a moment when the oldest Baby Boomers are already deep into their 80s and Gen X approaches retirement with record levels of anxiety. Only nine states—Washington, New Hampshire, Colorado, Nebraska, Idaho, Minnesota, Utah, Maryland, and Montana—are expected to generate a surplus for retirees, while high-cost anchors like California and New York lead the list of shortfall states. Two converging forces drive the numbers: rising longevity, which stretches retirement years beyond what savings plans were built for, and the rapidly accelerating cost of long-term care, whether delivered in a nursing home, assisted living facility, or at home. The study is as much a geography lesson as a financial one, underscoring that where one retires can be the single largest lever in closing the gap.

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Only nine states—Washington, New Hampshire, Colorado, Nebraska, Idaho, Minnesota, Utah, Maryland, and Montana—are expected to generate a surplus for retirees, while high-cost anchors like California and New York lead the list of shortfall states.

The implications cascade beyond individual retirement accounts. When 8% of non-retired adults have already dipped into their retirement savings early, according to Federal Reserve data cited in the study, the shortfall is not just a future problem—it is a present drain on the financial system. Smaller balances today compound into larger deficits later, and the $109,000 figure represents the average; in high-cost metros the shortfall can easily double. CareScout’s recommendations—researching care costs before relocating, treating long-term care like a tax consideration in location decisions, and securing long-term care insurance during peak earning years—offer a practical playbook, but they also highlight a systemic failure: retirement planning remains an individual burden despite the enormity of the collective risk.