How Long a $1M Retirement Fund Lasts in Each State
Saving $1 million for retirement sounds like a lot, but how long will that amount really last? Thanks to inflation, increased housing costs, and costly medical needs, $1 million may not last as long as you think.
Along with considering your lifestyle needs and retirement dreams, you should take into account that where you choose to reside in retirement will affect the longevity of your money. As you can likely imagine, $1 million in New York City won’t get you as far as it would in Topeka, Kansas. The real question is, just how long will your retirement fund last based on where you live?
Thanks to an extensive report compiled by GOBankingRates, (1) we can get an idea of what to expect. By determining the average total expenditures for people ages 65 and older then multiplying them by the cost of living index in each state, the report found the average expenditure cost for each state to determine how many years $1 million will last the average retiree.
Here’s a comprehensive ranking from worst to best:
50. Hawaii
How long $1 million will last: 11 years, 11 months
Hawaii is the most expensive for several reasons. The cost of groceries, housing, and spending are higher than any other state.
49. California
How long $1 million will last: 16 years, 5 months
Real estate in California is not cheap. While some costs are lower than Hawaii, your retirement fund may not last as long as you’d think.
48. Alaska
How long $1 million will last: 17 years
What makes Alaska particularly expensive is its grocery costs, which is only second to Hawaii. While housing is lower than many states, other living expenses make up for it.
47. New York
How long $1 million will last: 17 years, 1 month
Utilities are lower in New York than other states, but groceries, housing, and transportation make this state one of the most expensive to live in.
46. Massachusetts
How long $1 million will last: 17 years, 4 months
Healthcare costs are higher in Massachusetts than all but two other states in the U.S., and only three states pay higher utility bills. As a result, Massachusetts comes with a high cost of living.
45. Connecticut
How long $1 million will last: 17 years, 4 months
Connecticut is almost identical to Massachusetts in terms of costs of living, especially when it comes to healthcare. Connecticut has the fifth highest healthcare costs in the country.
44. Maryland
How long $1 million will last: 17 years, 4 months
It’s housing that’s particularly costly in Maryland, with the fourth highest housing prices in the country. Transportation is also more expensive, contributing to high cost of living expenses.
43. Oregon
How long $1 million will last: 17 years, 7 months
Housing and grocery bills are higher in Oregon than many states, which contribute to the high costs. However, eastern Oregon is considerably less expensive than the west and Portland areas.
42. Rhode Island
How long $1 million will last: 18 years, 2 months
Most expenses in Rhode Island are comparable to the rest of the country, but its housing and utilities that put this state within the top 10 most expensive places to live.
41. New Jersey
How long $1 million will last: 18 years, 6 months
Housing in New Jersey, along with utilities, make this one of the more expensive states in which to retire.
40. Vermont
How long $1 million will last: 18 years, 7 months
While healthcare costs are only slightly above average compared to the rest of the country, housing, utilities, and many other costs of living are much higher here.
39. New Hampshire
How long $1 million will last: 19 years
New Hampshire retirees can expect utilities and grocery bills that are far beyond the national average.
38. Maine
How long $1 million will last: 19 years, 6 months
While groceries are slightly below the national average, many other expenses are above average, including housing and utilities.
37. Washington
How long $1 million will last: 21 years, 1 month
Utilities in Washington are significantly below the national average. However, housing and other costs will take a bite out of your retirement fund each year.
36. Delaware
How long $1 million will last: 21 years, 10 months
You can expect to find housing, healthcare, and transportation costs below the national average, but pricey groceries and utilities bring up annual costs of living.
35. Pennsylvania
How long $1 million will last: 21 years, 11 months
Healthcare costs are lower here than all but three states, but housing and utilities bring this state up to 16th place for the most expensive states for retirees.
34. Virginia
How long $1 million will last: 22 years
Virginia ranks well in transportation, with the eighth lowest expenses nationwide. And while utilities and healthcare rank average, housing is what can cost more than average.
33. Colorado
How long $1 million will last: 22 years
Housing and healthcare costs are above the national average, but utilities, transportation, and groceries, among other necessities, are cheaper than average.
32. Nevada
How long $1 million will last: 22 years
Nevada ranks similarly to Colorado, especially when it comes to low utilities. However, housing, healthcare, and transportation are far above average.
31. South Carolina
How long $1 million will last: 22 years, 3 months
South Carolina has some of the most expensive utilities nationwide, and while grocery bills and healthcare are also above average, housing and transportation fall below average.
30. Florida
How long $1 million will last: 22 years, 4 months
Along with expensive grocery costs, housing, transportation, and utilities are all above average. However, Floridians save in healthcare costs.
29. South Dakota
How long $1 million will last: 22 years, 4 months
The cost of living in South Dakota is just slightly above the national average. And while housing costs above the national average, residents pay less for transportation (the fifth cheapest of all states).
28. Minnesota
How long $1 million will last: 22 years, 6 months
Similar to South Dakota, Minnesota is just slightly above average for groceries, transportation, and healthcare costs. But residents can save when it comes to utilities and housing.
27. North Dakota
How long $1 million will last: 22 years, 7 months
Healthcare costs and groceries can be more expensive than the average state, but residents will save in utilities and housing.
26. Montana
How long $1 million will last: 22 years, 10 months
Utilities in Montana are the cheapest in the country, while groceries and healthcare costs are in line with the national average.
25. Illinois
How long $1 million will last: 23 years, 1 month
Coming in at the middle, Illinois retirees will save in terms of healthcare, housing, and groceries, but can expect to pay above the national average for transportation and utilities.
24. Arizona
How long $1 million will last: 23 years, 2 months
While groceries are more expensive than the national average, housing, utilities, transportation, and healthcare are all below average.
23. Wisconsin
How long $1 million will last: 23 years, 3 months
Healthcare, utilities, and transportation costs are all higher than the national average, but residents will save considerably when it comes to housing.
22. New Mexico
How long $1 million will last: 23 years, 3 months
New Mexico is almost identical to Wisconsin in terms of annual costs. Utilities, housing, and groceries are all below average, but healthcare and transportation are slightly above the national average.
21. West Virginia
How long $1 million will last: 23 years, 6 months
Only groceries are slightly above average. Housing, healthcare, and utilities are all below average.
20. Wyoming
How long $1 million will last: 23 years, 8 months
We’ve officially reached the top 20 least expensive states for living in retirement! Groceries and utilities are slightly above the national average, but housing is far below average, as are the other categories.
19. Kentucky
How long $1 million will last: 23 years, 8 months
Housing is particularly inexpensive in Kentucky, as are groceries and healthcare costs.
18. North Carolina
How long $1 million will last: 23 years, 8 months
North Carolina is cheaper than average for housing, transportation, utilities, and groceries. The only category where it ranks slightly above average is healthcare.
17. Utah
How long $1 million will last: 23 years, 10 months
Along with the third-lowest utility rates in the country, Utah is also known for inexpensive housing. Groceries is the only category where Utah ranks slightly higher than the national average.
16. Nebraska
How long $1 million will last: 23 years, 10 months
Other than transportation, Nebraska living costs are all below average, including housing, utilities, groceries, and healthcare.
15. Louisiana
How long $1 million will last: 23 years, 10 months
Louisiana ranks slightly below the national average for all categories, with housing ranking significantly below the national average.
14. Ohio
How long $1 million will last: 24 years, 2 months
Ohio has the second-lowest annual housing costs across the nation. While transportation is slightly above average, utilities, healthcare, and groceries are all below average in expenses.
13. Iowa
How long $1 million will last: 24 years, 3 months
Healthcare and transportation costs hover around the national average, but inexpensive housing and groceries make this an affordable state for retirees.
12. Kansas
How long $1 million will last: 24 years, 7 months
Other than housing, which is the ninth-lowest cost in the nation, transportation, healthcare, groceries, and utilities are in line with the national average cost.
11. Idaho
How long $1 million will last: 24 years, 8 months
While transportation costs are slightly above average, all other categories rank below the national average, especially when it comes to housing.
10. Alabama
How long $1 million will last: 24 years, 9 months
Alabama makes it into the top 10 with lower than average healthcare costs and housing.
9. Indiana
How long $1 million will last: 24 years, 9 months
In Indiana, all living expenses fall below the national average, especially when it comes to housing costs.
8. Texas
How long $1 million will last: 24 years, 9 months
One of the largest states in the country comes with some of the lowest living expenses. Groceries and housing are fairly inexpensive, and utilities, healthcare, and transportation all cost less than the national average.
7. Missouri
How long $1 million will last: 24 years, 10 months
Utilities may cost slightly more than the national average, but housing is the fourth cheapest in the country.
6. Georgia
How long $1 million will last: 24 years, 11 months
Living expenses in Georgia all fall below the national average, especially when it comes to housing.
These final five states make it possible for retirees to potentially enjoy 25 years in retirement with a $1 million fund.
5. Tennessee
How long $1 million will last: 25 years
The standout category for Tennessee is housing, which is lower than most states.
4. Michigan
How long $1 million will last: 25 years
While healthcare and utilities fall below the national average cost, the greatest advantage is housing.
3. Oklahoma
How long $1 million will last: 25 years, 2 months
All major living costs fall below the national average in Oklahoma, making it easier for retirees to stretch their dollar.
2. Arkansas
How long $1 million will last: 25 years, 6 months
As the second cheapest state in terms of cost of living, healthcare costs are the second lowest in the country and groceries are the fourth lowest.
1. Mississippi
How long $1 million will last: 26 years, 4 months
Mississippi ranks as the least expensive state to live in, requiring only an average of $37,964 per year for living expenses (compared to $83,000 for Hawaii, the most expensive state).
Between Hawaii and Mississippi, there is more than a 14-year difference in the length of time that your $1 million retirement fund will last. This significant difference means your retirement account could last more than twice as long in some states than others! These figures go to show just how important it is to address average housing costs in your state when calculating how much you’ll need in retirement.
Do you have questions on your retirement savings and how long $1 million could last for you based on your lifestyle needs? Give me a call at (717) 283-4186 or email me at dniggel@keywealthpartners.com. We’d be happy to review your current strategies and help you plan for your Golden Years.
About David
David Niggel, CFP®, ChFC®, AIF® is the founder and president of Key Wealth Partners, LLC, an independent wealth management firm serving individuals, families, and business owners. Along with over a decade of financial services experience, he has advanced knowledge and training in providing holistic financial planning with fiduciary and ethical care, holding the CERTIFIED FINANCIAL PLANNER™, Chartered Financial Consultant®, and Accredited Investment Fiduciary® certifications. With hands-on entrepreneurial experience, he has the unique ability to help clients meet both their individual and business goals. Based in Lancaster, he serves clients through the York, Harrisburg, Hershey, and Central, Pennsylvania areas. Learn more by visiting www.keywealthpartners.com or connecting with David on LinkedIn.
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(1) https://www.gobankingrates.com/investing/how-long-million-last-retirement-state/2/