Retire in New Jersey: Cost, Taxes & FIRE Number for 2026
Retiring in New Jersey costs about $80,000 a year on average, earning a D retirement tax grade and a #9 healthcare ranking. Here's the full breakdown — cost, taxes, and how much you actually need saved.
What It Costs to Retire in New Jersey
The average retiree in New Jersey spends about $80,000 a year ($6,667/month), based on BLS spending data for households 65 and older, adjusted for New Jersey's cost of living. That works out to a standard retirement number of $2,000,000 under the 4% rule, or $2.29M 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) × New Jersey'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)
New Jersey earns a D retirement tax grade from Plootus Research and ranks #9 of 50 states for healthcare quality. Combined with an average annual salary of $80,660 for working residents (median $65,580), that gives a fuller picture of what building — and eventually spending down — a nest egg looks like here.
New Jersey Retirement at a Glance
| Average annual retirement cost | $80,000/yr ($6,667/mo) |
| Standard Retirement Number (4% rule) | $2,000,000 |
| FIRE Number (3.5% SWR) | $2.29M |
| Retirement Tax Grade | D |
| State Income Tax | 10.75% max |
| Social Security Tax | ✅ No tax |
| Healthcare Quality Rank | #9 of 50 |
| FIRE-Friendliness Rating | ★★☆☆☆ |
| Avg. Annual Salary (working residents) | $80,660 |
| Median Annual Salary (working residents) | $65,580 |
Sources: BLS CES 2024 (65+); MERIC Q3 2025; BLS OEWS May 2024; Plootus Research 2026.
Your New Jersey-Adjusted Retirement Number
Pre-filled with New Jersey's average retirement spending — adjust for your own situation.
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How New Jersey Compares to Nearby States
| State | Annual Cost | Retirement Number | Tax Grade | HC Rank |
|---|---|---|---|---|
| New Jersey | $80,000 | $2,000,000 | D | #9 |
| Maryland | $69,000 | $1,725,000 | C | #19 |
| Virginia | $58,500 | $1,462,500 | B | #13 |
| Delaware | $57,000 | $1,425,000 | A | #15 |
How New Jersey Treats Retirees on Taxes and Healthcare
New Jersey carries a D retirement tax grade from Plootus Research — one of the less tax-friendly states for retirees, largely driven by its high income tax rate.
State Income Tax
New Jersey's state income tax tops out at 10.75% — one of the highest in the country. Check current brackets and any retirement-income deductions before you file.
Social Security Tax
New Jersey does not tax Social Security benefits, one of the brighter spots for retirees in an otherwise high-tax state.
New Jersey ranks #9 nationally for healthcare quality — one of the stronger states for retirees who prioritize access to care.
Frequently Asked Questions: Retiring in New Jersey
New Jersey earns a D retirement tax grade and ranks #9 of 50 for healthcare quality. Average annual retirement spending runs about $80,000, requiring roughly $2,000,000 in savings under the standard 4% withdrawal rule. Whether it's a good fit depends on your priorities — New Jersey's state income tax is 10.75% max, and it does not tax Social Security.
New Jersey does not tax Social Security benefits, one of the factors behind its D tax grade. Confirm current thresholds and exemptions with a tax professional, since rules change year to year.
Using the standard 4% rule, retiring in New Jersey on its average annual cost of $80,000 requires approximately $2,000,000 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 — New Jersey's FIRE number is approximately $2.29M, based on its $80,000/year average cost. Early retirees should also budget separately for healthcare before Medicare eligibility at 65.
Sources
- 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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