Sure, it sounds like a lot of money, but $1 million just won’t buy what it used to. In fact, that cool million won’t even sustain you for the duration of your retirement.
Unless your retirement is unusually short, that is. And most people hope that won’t be the case.
Statistically, it won’t—which means those bucks have to last for a long, long time. In fact, the average American retirement age, according to GoBankingRates.com, is 63, and retirees’ life expectancy is 85—which means that the average American will spend 22 years retired.
And with 10,000 people turning 65 every day here in the U.S., that’s a lot of people who have to figure out how to get by for the longest time possible on considerably less than a cool million.
Of course, how long that money lasts you depends in large part on where you retire. In some places across the country, you’ll be lucky if it lasts you barely more than a decade—while other places will stretch it for you so that you can get by for more than double that.
It determined that there is a 14-year, five-month difference in the length of time $1 million saved for retirement will last the shortest and the longest. In some states, the cost of living makes it tough to stretch a buck, while in others one—or more than one—factor can contribute notable savings to a retiree’s budget.
Among the considerations in toting up the average expenses for people age 65 and older, GoBankingRates took into account such essentials as groceries, housing, utilities, transportation and health care to come up with average total expenditures from the Bureau of Labor Statistics.
Next, those averages were multiplied by the cost of living index in each state, from the Missouri Economic Research and Information Center, to find the average expenditure cost for each state.
Dividing a theoretical $1 million by the costs per state, it adds, reveals the number of years $1 million will last retirees in every state.
Of course, there are other considerations than money to determine where you might be best off once you retire, but here are the 5 states where $1 million will last the longest and the shortest amount of time. Don’t say we didn’t warn you.
5 states where $1 million for retirement lasts longer
5. Tennessee: 25 years
4. Michigan: 25 years
3. Oklahoma: 25 years, 2 months
2. Arkansas: 25 years, 6 months
1. Mississippi: 26 years, 4 months
5 states where $1 million won't last long in retirement
5. Massachusetts: 17 years, 4 months
4. New York: 17 years, 1 month
3. Alaska: 17 years
2. California: 16 years, 5 months
1. Hawaii: 11 years, 11 months
Call our team today and make sure your plan for retirement will last as long as you live, and where you want to live, 616-233-9050.