How long will $1 million last you in retirement? Report says it depends on the state

When it comes to retirement savings, a cool $1 million is the gold standard.

However, these days, that may not be enough. Depending on where you live, a nest egg of that size will barely last a decade.

Considering rising inflation, cost of living and real estate, $1 million stretches a little less every year, according to Andrew DePietro, a research and data analyst at personal finance site GoBankingRates.

GoBankingRates compared average expenses for people age 65 and older, including groceries, housing, utilities, transportation and health care, in every state to come up with how long a nest egg of $1 million would really last during retirement. The report did not take into account investment income over that period.

The results found that almost every state saw a decrease in the amount of time $1 million will last from the previous year, mostly due to higher costs of living nationwide.

Top 5 states where your dollar will last the longest:

1. Mississippi: 25 years, 11 months, 30 days

2. Oklahoma: 24 years, 8 months, 24 days

3. Michigan: 24 years, 7 months, 14 days

4. Arkansas: 24 years, 7 months, 4 days

5. Alabama: 24 years, 7 months, 4 days

It’s no surprise that dollars stretched the furthest in states like Mississippi, Oklahoma and Arkansas and where retirees could live a life of leisure for a quarter of a century.

Top 5 states where your dollar will last the shortest:

1. Hawaii: 11 years, 8 months, 20 days

2. California: 15 years, 5 months, 27 days

3. New York: 16 years, 3 months, 22 days

4. Alaska: 16 years, 8 months, 6 days

5. Maryland: 16 years, 8 months, 29 days

However, in Hawaii, where residents pay roughly 30 percent more for household items across the board, that amount will only get you just shy of a dozen years largely because of the cost of living and pricey real estate.

Ohio, by the way, checked in 15th on the list as $1 million will last: 23 years, 6 months, 23 days, according to GoBankingRates.

The site says, “At just $12,200 a year, Ohio boasts the sixth-lowest annual housing costs in the entire country. The other categories hover near the median state or below it — with utilities and healthcare both being cheaper than the norm. Cheap housing, however, launches Ohio into the top 15, with total annual living expenses of $42,416.

And if you’re wondering where the best place to take advantage of Ohio’s low housing costs, you should consider Toledo, one of the cheapest places to retire in the U.S.”

© CNBC is a USA TODAY content partner offering financial news and commentary. Its content is produced independently of USA TODAY.

Copyright (c) 2018 NBC All Rights Reserved

Source link

You might like