Plootus Reveals $38,000 Salary Gap Across U.S. States

Plootus, a free AI-powered retirement planning platform, has released its 2026 Average Salary by State Report, revealing a significant $38,000 gap in U.S. earnings. The analysis, based on Bureau of Labor Statistics Occupational Employment and Wage Statistics (OEWS) May 2024 data, finds that average annual salaries range from $50,540 in West Virginia to $88,820 in Massachusetts. The national average salary in Plootus's analysis is $65,470.

The research goes beyond comparing salaries, connecting state-level earnings with retirement planning. Plootus examines how income, taxes, retirement costs, and Social Security can affect the amount Americans may need to save for retirement. The analysis provides a complete 50-state table featuring average annual salary, median salary, retirement tax grade, and estimated minimum retirement savings for each state.

Massachusetts recorded the highest average salary at $88,820, followed by New York at $84,180, California at $82,760, New Jersey at $80,660, Connecticut at $80,610, Washington at $80,400, and Maryland at $79,920. At the other end of the table, West Virginia recorded the lowest average salary at $50,540, followed by Arkansas at $51,030, Mississippi at $53,940, Montana at $54,060, and Kentucky at $54,380.

Plootus's research incorporates these factors into its retirement analysis by estimating the minimum savings required based on annual retirement costs, an assumed average Social Security benefit of $24,894, and a 4% withdrawal-rate assumption. Under this methodology, the estimated minimum retirement savings requirement varies significantly across states. For example, Massachusetts has an estimated minimum retirement savings figure of approximately $1.61 million, while West Virginia's estimate is approximately $558,000. Hawaii stands out with an estimated requirement of approximately $2.61 million, despite an average annual salary of $65,700.

These figures illustrate why retirement planning cannot be based on salary alone. The amount an individual ultimately needs depends on a combination of income, spending, taxes, Social Security, investment savings, and the cost of living in retirement. The approximately $38,280 difference between Massachusetts and West Virginia's average annual salaries represents one of the most visible disparities in the Plootus analysis.

Over a career, differences in annual income can influence how much a worker is able to contribute to retirement accounts and the amount of retirement income they may ultimately need to replace. Plootus also examined how commonly cited retirement benchmarks translate across states. Using Fidelity's benchmark of accumulating approximately 10 times final salary by age 67, a worker earning the Massachusetts average salary of $88,820 would have a benchmark target of approximately $888,200. For a worker earning West Virginia's average salary of $50,540, the same benchmark would translate to approximately $505,400.

These calculations are benchmarks rather than individualized financial recommendations, and actual retirement needs vary based on factors including age, spending, savings rate, investment performance, Social Security benefits, taxes, housing, and healthcare costs. State-level salary differences can also intersect with Social Security retirement benefits. Social Security retirement benefits are based in part on a worker's earnings history, meaning an individual's lifetime income, not simply their current salary, plays an important role in determining future benefits.

For workers planning for retirement, this creates two connected considerations: how much they can potentially save during their working years and how much retirement income they may ultimately need to replace. Plootus's research is designed to help consumers see these connections in the context of where they live and work.