State-by-State Comparison: How much money do I need to retire? How long will my retirement savings last?
LOS ANGELES, Aug. 21, 2017 /PRNewswire/ — Mississippi is the state where your dollar will last the longest amount of time in retirement, while Hawaii is the state where your dollar will last the shortest, a new study found.
It’s a common refrain that retirees should save at least $1 million for retirement, but how much does where they live affect their saving needs?
10,000 people turn 65 in the U.S. every single day. The average American retirement age is 63, and the life expectancy for retirees is about 85. That means Americans should plan to spend 22 years in retirement. The AARP suggests a retirement income nest egg of at least $1 million, but the buying power of $1 million varies wildly depending on where you live. So if you’re asking “how long will my money last in retirement,” the answer depends on your state.
In order to determine how long $1 million will last the average retiree in each state, GOBankingRates found the average total expenditures for people 65 and older, which includes groceries, housing, utilities, transportation and healthcare. Then, we multiplied that by the cost of living index in each state to find the average expenditure cost for each state.
Dividing a theoretical $1 million by the costs per state reveals the number of years $1 million will last retirees in every state. Click through to learn just how long that is, and see which states are best — and worst — if you want to retire rich.
Personal finance website GOBankingRates found the average total annual expenses for people 65 and older (adding up groceries, housing, utilities, transportation and healthcare costs), then determined the state-specific yearly cost by multiplying total expenses by each state’s cost of living index.
For full study results and more details on methodology, visit: How Long $1 Million Will Last in Retirement in Every State
Top 5 States Where Your Dollar Will Last the Longest
- 1. Mississippi
$1 million will last: 26 years, 4 months
- 2. Arkansas
$1 million will last: 25 years, 6 months
- 3. Oklahoma
$1 million will last: 25 years, 2 months
- 4. Michigan
$1 million will last: 25 years
- 5. Tennessee
$1 million will last: 25 years
Top 5 States Where Your Dollar Will Last the Shortest
- 1. Hawaii
$1 million will last: 11 years, 11 months
- 2. California
$1 million will last: 16 years, 5 months
- 3. Alaska
$1 million will last: 17 years, 0 months
- 4. New York
$1 million will last: 17 years, 1 month
- 5. Massachusetts
$1 million will last: 17 years, 4 months
Additional Study Insights
- Hawaii’s expenses top out at $83,834 annually, while Mississippi’s are a low of $37,964.
- Alaska’s healthcare costs the most annually, at $8,479.
- The largest expenditure discrepancy is in housing: Hawaii’s costs a whopping $15,964 more annually than the runner-up, California.
GOBankingRates.com is a personal finance news and features website dedicated to helping visitors live a richer life. From tips on saving money, to investing for retirement or finding a good interest rate, GOBankingRates helps turn financial goals into milestones and money dreams into realities. Its content is regularly featured on top-tier media outlets, including MSN, MONEY, AOL Finance, CBS MoneyWatch, Business Insider and dozens of others. GOBankingRates specializes in connecting consumers with the financial institutions and products that best match their needs. Start your journey toward a rich mind and full wallet with us here.