Retire in Colorado: Cost, Taxes & FIRE Number for 2026
Retiring in Colorado costs about $61,000 a year on average, earning a B- retirement tax grade and a #7 healthcare ranking. Here's the full breakdown — cost, taxes, and how much you actually need saved.
What It Costs to Retire in Colorado
The average retiree in Colorado spends about $61,000 a year ($5,083/month), based on BLS spending data for households 65 and older, adjusted for Colorado's cost of living. That works out to a standard retirement number of $1,525,000 under the 4% rule, or $1.74M for early retirees using the more conservative 3.5% FIRE withdrawal rate.
How the numbers below are calculated:
Annual cost = BLS Consumer Expenditure Survey 2024 (65+ household spending) × Colorado's cost-of-living index (MERIC Q3 2025).
Standard Retirement Number = Annual Cost ÷ 0.04 (4% rule, ~30-year horizon)
FIRE Number = Annual Cost ÷ 0.035 (3.5% rule, 40–50+ year horizon for early retirees)
Colorado earns a B- retirement tax grade from Plootus Research and ranks #7 of 50 states for healthcare quality. Combined with an average annual salary of $76,540 for working residents (median $62,840), that gives a fuller picture of what building — and eventually spending down — a nest egg looks like here.
Colorado Retirement Snapshot
| Metric | Colorado |
|---|---|
| Average annual retirement cost | $61,000/yr |
| Average monthly retirement cost | $5,083/mo |
| Standard retirement number (4% rule) | $1,525,000 |
| FIRE number (3.5% rule) | $1.74M |
| Retirement tax grade | B- |
| State income tax | 4.4% flat |
| Social Security tax | ⚠️ Caution |
| Healthcare quality rank | #7 of 50 |
| FIRE-friendliness rating | ★★★☆☆ |
| Average annual salary (working residents) | $76,540 |
| Median annual salary (working residents) | $62,840 |
Sources: BLS CES 2024 (65+); MERIC Q3 2025; BLS OEWS May 2024; Plootus Research 2026.
Your Colorado-Adjusted Retirement Number
Pre-filled with Colorado's average retirement spending — adjust for your own situation.
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How Colorado Compares to Nearby States
| State | Annual Cost | Retirement Number | Tax Grade | HC Rank |
|---|---|---|---|---|
| Colorado (this page) | $61,000 | $1,525,000 | B- | #7 |
| Utah | $60,000 | $1,500,000 | C | #10 |
| Montana | $53,000 | $1,325,000 | C | #21 |
| Idaho | $52,500 | $1,312,500 | B | #18 |
→ Run a full side-by-side comparison in the State Comparison Tool
How Colorado Treats Retirees on Taxes and Healthcare
Colorado carries a B- retirement tax grade from Plootus Research — an above-average, generally tax-friendly state for retirees.
State Income Tax
Colorado's state income tax tops out at 4.4% flat. Check current brackets and any retirement-income deductions before you file.
Social Security Tax
Colorado is flagged for caution on Social Security and other retirement-income taxation — confirm current rules with a tax professional before relying on this state for planning.
Colorado ranks #7 nationally for healthcare quality — one of the stronger states for retirees who prioritize access to care.
Frequently Asked Questions
Colorado earns a B- retirement tax grade and ranks #7 of 50 for healthcare quality. Average annual retirement spending runs about $61,000, requiring roughly $1,525,000 in savings under the standard 4% withdrawal rule. Whether it's a good fit depends on your priorities — Colorado's state income tax is 4.4% flat, and it warrants caution on Social Security/retirement-income taxation.
Colorado is flagged for caution on Social Security and other retirement-income taxation — confirm current rules with a tax professional before relying on this state for planning. Check current thresholds directly with the state, since exemptions often apply below certain income levels.
Using the standard 4% rule, retiring in Colorado on its average annual cost of $61,000 requires approximately $1,525,000 in savings. That figure excludes Social Security, which most retirees layer on top to reduce the amount they need from their own portfolio.
At a 3.5% safe withdrawal rate — the more conservative rate recommended for early retirees facing a 40–50+ year horizon — Colorado's FIRE number is approximately $1.74M, based on its $61,000/year average cost. Early retirees should also budget separately for healthcare before Medicare eligibility at 65.
- Bureau of Labor Statistics, Consumer Expenditure Survey 2024 (65+ age group)
- Missouri Economic Research and Information Center (MERIC), Cost of Living Index Q3 2025
- Bureau of Labor Statistics, Occupational Employment and Wage Statistics (OEWS) May 2024
- Kiplinger, Retirement Taxes 2026; WalletHub Best States to Retire 2026
- Plootus Research 2026 (tax grades, healthcare rank, FIRE ratings)
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