Insights

X
Posted on October 1, 2019

How Long Will Your Retirement Savings Last In Each Of The 50 States?

Blog

Published by Ryan Cooley

Times are a-changin’. And they’re changing quickly. $1 million has generally been seen as the gold standard for financial security, but thanks to inflation, a $1 million retirement fund might not get you as far as you think. According to Schwab’s 2019 Modern Wealth Survey,  most Americans believe you need about $2.3 million to make it into the “wealthy” category. (1)

But that’s just the average. The truth is, when it comes to your retirement, where you live plays a significant role in how far your money will stretch. For example, the Schwab survey found that San Francisco residents felt that they needed $4.2 million to be wealthy, compared to $1.8 million in Charlotte, North Carolina. (2)

Even if you don’t aspire to be in the top 5%, you do want your retirement nest egg to last as long as you need it to. Thanks to an extensive report compiled by GOBankingRates, (3) we can get an idea of how the cost of living in your state of residence impacts your retirement planning. 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:

  1. Hawaii

How long $1 million will last: 10 years, 3 months, 27 days

Hawaii is the most expensive for several reasons. The cost of groceries, housing, and spending are higher than in any other state.

  1. California

How long $1 million will last: 13 years, 1 month, 15 days

Real estate in California is expensive. While some costs are lower than Hawaii, your retirement fund may not last as long as you’d think.

  1. New York

How long $1 million will last: 14 years, 3 months, 25 days

Utilities are lower in New York than other states, but groceries, housing, and transportation make this state one of the most expensive in which to live.

  1. Oregon

How long $1 million will last: 14 years, 10 months, 2 days

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 western and Portland areas.

  1. Massachusetts

How long $1 million will last: 15 years, 1 month, 17 days

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.

  1. Alaska

How long $1 million will last: 15 years, 3 months, 30 days

What makes Alaska particularly expensive is its grocery bill, which is only second to Hawaii. While housing costs are lower than many states, other costs of living make up for it.

  1. Maryland

How long $1 million will last: 15 years, 4 months, 9 days

It’s housing that’s particularly expensive in Maryland, with the fourth highest housing costs in the country. Transportation is also more expensive, contributing to high cost-of-living expenses.

  1. Connecticut

How long $1 million will last: 15 years, 7 months, 5 days

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.

  1. New Jersey

How long $1 million will last: 15 years, 11 months, 1 day

Housing in New Jersey, along with utilities, makes this one of the more expensive states in which to retire.

  1. Rhode Island

How long $1 million will last: 16 years, 8 months, 4 days

Most expenses in Rhode Island are comparable to the rest of the country, but its housing and utilities put this state within the top 10 most expensive places to live. 

  1. Maine

How long $1 million will last: 16 years, 11 months, 11 days

Maine has expensive housing costs, as well as higher-than-average expenses in every other category. 

  1. Vermont

How long $1 million will last: 17 years, 4 months, 22 days

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.

  1. Washington

How long $1 million will last: 17 years, 11 months, 27 days

Utility costs in Washington are significantly below the national average. However, housing and other costs will take a bite out of your retirement fund each year.

  1. New Hampshire

How long $1 million will last: 18 years, 1 month, 24 days

New Hampshire retirees can expect utilities and grocery bills that are much higher than the national average. 

  1. Nevada

How long $1 million will last: 18 years, 4 months, 9 days

Nevada residents enjoy lower-than-average utility bills, but they don’t get a break when it comes to housing, healthcare, or transportation.

  1. Delaware

How long $1 million will last: 18 years, 5 months, 3 days

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.

  1. Montana

How long $1 million will last: 18 years, 7 months, 17 days

Utilities in Montana are the cheapest in the country, while groceries and healthcare cost around the average. 

  1. Colorado

How long $1 million will last: 18 years, 10 months, 9 days

Housing and healthcare costs are above the national average, but utilities, transportation, and groceries, among other necessities, are cheaper than average.

  1. Pennsylvania

How long $1 million will last: 19 years, 7 months

Healthcare costs are lower here than all but three states, but housing and utilities bring this state up to 18th place for the most expensive states for retirees.

  1. Minnesota

How long $1 million will last: 19 years, 7 months, 7 days

Minnesota is just slightly above average for groceries, transportation, and healthcare costs. But residents can save when it comes to utilities and housing.

  1. Virginia

How long $1 million will last: 19 years, 9 months, 10 days

Virginia ranks well in transportation, with the fourth lowest expenses nationwide. And while utility and healthcare costs are below average, housing will hurt your pocketbook.

  1. South Dakota

How long $1 million will last: 19 years, 11 months, 14 days

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.

  1. North Dakota

How long $1 million will last: 20 years, 1 month, 26 days

Healthcare costs and groceries can be more expensive than the average state, but residents will save in utilities and housing.

  1. Utah

How long $1 million will last: 20 years, 2 months, 27 days

Utah is also known for inexpensive housing. Transportation is the only category where Utah ranks slightly higher than the national average.

  1. Florida

How long $1 million will last: 20 years, 4 months, 4 days

Your grocery bill will be high in Florida, but the cost of housing, transportation, and healthcare are all below average. 

  1. Wisconsin

How long $1 million will last: 20 years, 5 months, 18 days

Healthcare and transportation costs are higher than the national average, but residents will save considerably when it comes to utilities.

  1. Arizona

How long $1 million will last: 20 years, 6 months, 12 days

While transportation costs are more expensive than the national average, housing and healthcare costs are below average.

  1. South Carolina

How long $1 million will last: 20 years, 9 months, 6 days

South Carolina has some of the most expensive utilities nationwide, and while groceries are also above average, housing and transportation costs fall below average.

  1. North Carolina

How long $1 million will last: 20 years, 11 months, 25 days

North Carolina is cheaper than average for housing, transportation, utilities, and groceries. The only category where it ranks slightly above average is the cost of healthcare.

  1. Illinois

How long $1 million will last: 21 years, 26 days

Coming in near 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.

  1. Louisiana

How long $1 million will last: 21 years, 2 months, 16 days

Louisiana ranks slightly below the national average for all categories, with the cost of housing ranking significantly below the national average.

  1. Idaho

How long $1 million will last: 21 years, 6 months, 28 days

While transportation costs are slightly above average, all other categories rank below the national average, especially when it comes to housing.

  1. Texas

How long $1 million will last: 21 years, 9 months, 5 days

One of the largest states in the country comes with some lower expenses. Groceries and housing are fairly inexpensive, and utilities, healthcare, and transportation all cost less than the national average.

  1. West Virginia

How long $1 million will last: 21 years, 10 months, 9 days

The cost of housing, healthcare, groceries, and utilities all fall below average.

  1. Kentucky

How long $1 million will last: 21 years, 10 months, 27 days

Housing is particularly inexpensive in Kentucky, as are groceries and healthcare costs.

  1. Ohio

How long $1 million will last: 21 years, 11 months, 6 days

Ohio has the sixth lowest annual housing costs across the nation. Additionally,  the cost of utilities, healthcare, and groceries is below average.

  1. Nebraska

How long $1 million will last: 21 years, 11 months, 6 days

Other than transportation, Nebraska living costs are all below average, including housing, utilities, groceries, and healthcare.

  1. Iowa

How long $1 million will last: 22 years, 1 month, 6 days

Healthcare and transportation costs hover around the national average, but inexpensive housing and groceries make this an affordable state for retirees.

  1. Indiana

How long $1 million will last: 22 years, 1 month, 15 days

In Indiana, all living expenses fall below the national average, especially when it comes to housing costs.

  1. Alabama

How long $1 million will last: 22 years, 3 months, 19 days

Other than high utility costs, Alabamans will save money in every other category, especially housing. 

  1. Wyoming

How long $1 million will last: 22 years, 3 months, 19 days

We’ve officially reached the top 10 least expensive states for living in retirement! The cost of living hovers around average for most categories, but housing is quite a bit cheaper than other states. 

  1. Georgia

How long $1 million will last: 22 years, 3 months, 28 days

Living expenses in Georgia all fall below the national average, especially when it comes to housing.

  1. Kansas

How long $1 million will last: 22 years, 4 months, 17 days

Kansas residents spend the same low amount on housing as Georgians, but utilities are a bit higher than average. 

  1. Michigan

How long $1 million will last: 22 years, 4 months, 26 days

While healthcare and utilities fall below the national average cost, the greatest advantage is housing.

  1. Tennessee

How long $1 million will last: 22 years, 5 months, 13 days

The standout category for Tennessee is housing, which is 20% lower than in most states.

These final five states make it possible for retirees to potentially enjoy almost 23 years in retirement with a savings of $1 million.

  1. New Mexico

How long $1 million will last: 22 years, 9 months, 4 days 

New Mexico boasts utility bills that are among the lowest in the country. 

  1. Missouri

How long $1 million will last: 22 years, 10 months, 11 days

Missouri has the second lowest housing costs in the country. 

  1. Oklahoma

How long $1 million will last: 22 years, 10 months, 21 days

All major living costs fall below the national average in Oklahoma, making it easier for retirees to stretch their dollars.

  1. Arkansas

How long $1 million will last: 22 years, 10 months, 30 days

As the second cheapest state in terms of cost of living, healthcare costs are among the lowest in the country, and healthcare and transportation are 15% below the national average. 

  1. Mississippi

How long $1 million will last: 23 years, 1 month, 16 days

The only state to break the 23-year mark, Mississippi ranks as the least expensive state to live in with the lowest cost for housing. 

What Does This Mean For My Retirement?

Between Hawaii and Mississippi, there is almost a 13-year difference in the length of time that your $1 million retirement fund will last. This substantial difference means your retirement account could last almost 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 about your retirement savings and how long your money will last for you based on your lifestyle needs? Contact our office to set up an appointment by calling 410-821-6724 or emailing info@jacobwilliam.com and be sure to take our retirement readiness quiz.

About Ryan

Ryan Cooley is an associate Wealth Advisor at Jacob William Advisory, a wealth management firm whose sole mission is to serve their clients’ needs beyond their expectations. Ryan has a military background as a U.S. Army Infantryman, and he applies the values and character traits he learned through his experience to his role as a financial advisor. To this day, Ryan is passionate about veterans’ issues and holds a seat on the Advisory Board for Operation Second Chance and is a lifetime member of the Disabled American Veterans organization. Ryan obtained his bachelor’s degree in economics and his MBA from the University of Maryland. Outside of the office, Ryan enjoys spending time with his wife, Germaine, and their two wonderful children. He currently resides in Urbana, Maryland, and loves to fish, hunt, cook, watch Maryland Terrapin sports, and cheer his son and daughter on in all of their activities. To learn more about Ryan, connect with him on LinkedIn.

_________

(1) https://www.aboutschwab.com/modernwealth2019?cid=22138465|5629992|121553033|254418711

(2) https://www.supermoney.com/much-money-take-considered-rich-us/

(3) https://www.gobankingrates.com/investing/how-long-million-last-retirement-state/2/