Saving enough money for retirement can be a challenging task, especially when considering the varying costs of living across different states, and even within them. For instance, in California, an average retiree requires approximately $100,965 to lead a comfortable life, whereas in Kansas, that figure is just above $63,000.
These figures come from Go Banking Rates, which calculated the annual income retirees would need to live a comfortable life. Using these numbers, we can calculate how many years a retirement savings of $1 million would last. By keeping funds in a private retirement account, the account’s value will continue to increase as long as the stocks in the portfolio see an increase. The states with the lowest cost of living where the $1 million savings would last the longest are:
Retirees in certain states can enjoy between 15 and 16 years of life if they save one million dollars. However, those who have not yet reached this goal should know there are still ways to save money after retiring. One million dollars will also last retirees around fifteen years in Tennessee, Nebraska, Ohio, Indiana, Illinois, Michigan, Wyoming, Louisiana, Texas, South Dakota, New Mexico, Kentucky, and Wisconsin.
The five states where one million dollars would last the shortest amount of time are:
State
Income
Years
Hawaii
$131,175
8
Washington DC
$108,192
9
Massachusetts
$103,422
10
California
$100,965
10
New York
$91,497
11
Where will one million dollars last fourteen years?
Retirees in Minnesota, North Carolina, North Dakota, South Carolina, Pennsylvania, Idaho, Nevada, and Florida can stretch one million around fourteen years.
Where will one million dollars last thirteen years?
Those in Virginia, Utah, Montana, Delaware, Colorado, and Arizona can expect to live comfortably for thirteen years.
Where will one million dollars last twelve or eleven years?
Retirees in New Jersey, Rhode Island, Maine, Connecticut, New Hampshire, Washington, Vermont, and Oregon can expect their one million dollars in savings to allow them to live comfortably for twelve years. Savings could be stretched over eleven years in Maryland and Alaska.
How long will $1 million in retirement savings last? In more than 20 U.S. states, a million-dollar nest egg can cover retirees' living expenses for at least 20 years, a new analysis shows. It's worth noting that most Americans are nowhere near having that much money socked away.
However, not a huge percentage of retirees end up having that much money. In fact, statistically, around 10% of retirees have $1 million or more in savings.
According to the findings, the total cost of living in Georgia amounts to approximately $46,000 annually. For Georgia residents, this means that $1 million dollars could sustain them for about 21 and a half years.
The 4% rule suggests that a $1.5 million portfolio will provide for at least 30 years approximately $60,000 a year before taxes for you to live on in retirement. If you take more than this from your nest egg, it may run short; if you take less or your investments earn more, it may provide somewhat more income.
According to EBRI estimates based on the latest Federal Reserve Survey of Consumer Finances, 3.2% of retirees have over $1 million in their retirement accounts, while just 0.1% have $5 million or more.
GoBankingRates used the latest available data from the Bureau of Labor Statistics' 2020 Consumer Expenditure Survey and the Missouri Economic Research and Information Center. In Florida, $1 million would last you about 18 years, per GoBankingRates' December study.
This number has been cited so often that investors may feel as if they're failing if they don't reach it. But that shouldn't be the case. In fact, statistically, just 10% of Americans have saved $1 million or more for retirement.
Once you have $1 million in assets, you can look seriously at living entirely off the returns of a portfolio. After all, the S&P 500 alone averages 10% returns per year. Setting aside taxes and down-year investment portfolio management, a $1 million index fund could provide $100,000 annually.
While having a net worth of about $2.2 million is seen as the benchmark for being rich in America, it's essential to remember that wealth is a subjective concept. Healthy financial habits and personal perspectives on money are crucial in defining and achieving wealth.
You retire at 40 – With an estimated life expectancy of 90, you need 50 years of income. Across those years, $2 million could equate to approximately $40,000 annually or $3,333 monthly. This should be enough to cover you, but things may be tight if your outgoings are high as a retiree.
In fact, statistically, around 10% of retirees have $1 million or more in savings. The majority of retirees, however, have far less saved. If you're looking to be in the minority but aren't sure how to get started on that savings goal, consider working with a financial advisor.
The results. The top two states to retire in according to our formula are — drumroll please — Alaska and New Hampshire! Alaska has the lowest tax burden of any state at 5.06%.
This effectively means the top 1% are those with more than $10 million (~25m) and the top 0.1% are those with roughly $1 billion. There are estimated to be a little over 8 million households in the US with a net worth of $3 million or more. I very much doubt that any of them have that amount in savings.
Social Security offers a monthly benefit check to many kinds of recipients. As of December 2023, the average check is $1,767.03, according to the Social Security Administration – but that amount can differ drastically depending on the type of recipient. In fact, retirees typically make more than the overall average.
Among the 47 million households headed by someone age 60 or older, 7% had household investable assets of at least $2 million, Drinkwater said. Only 6% of the 89 million households in the U.S. headed by someone 40 to 85 years old has that amount, Drinkwater said.
You retire at 40 – With an estimated life expectancy of 90, you need 50 years of income. Across those years, $2 million could equate to approximately $40,000 annually or $3,333 monthly. This should be enough to cover you, but things may be tight if your outgoings are high as a retiree.
For a 25-year retirement, you'd need just over $2 million in Hawaii — the most of all states by far. That's followed by Massachusetts, California and New York, along with 12 other states where you'd need at least $1 million saved up to retire.
Summary. $300,000 can last for roughly 26 years if your average monthly spend is around $1,600. Social Security benefits help bolster your retirement income and make retiring on $300k even more accessible. It's often recommended to have 10-12 times your current income in savings by the time you retire.
Introduction: My name is Gregorio Kreiger, I am a tender, brainy, enthusiastic, combative, agreeable, gentle, gentle person who loves writing and wants to share my knowledge and understanding with you.
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