Planning for retirement with a $1 million savings might not be enough, as a new study from Go Banking Rates has shown that the longevity of that amount depends on where retirees choose to live. The study assumed a retirement age of 65 or older and looked at the annual cost of living in all 50 states. In states like Mississippi and Oklahoma, a $1 million retirement fund would last about 22 years, while in New York and Hawaii, with high cost of living expenses, the same fund would last less than 15 years. Specifically, in California, where the annual cost of living expenses would be $72,319.57, a $1 million retirement fund would last for about 14 years.
Retirement can often last 25 years or more, according to Fidelity, and it’s important to note that retirement funds will look different for everyone. Financial experts shared that $1 million may not have the same longevity as it once did in certain states due to changing factors like inflation. However, Fidelity recommends that people put away about 15% of their annual income for retirement, but advises that if that amount isn’t feasible, individuals can start by saving at least 1% of their annual income until they reach that 15% mark.
Overall, the study highlights the importance of considering location and cost of living when planning for retirement, as $1 million may not stretch as far in some states compared to others. Varying factors such as inflation can also impact the longevity of retirement funds, making it crucial for individuals to carefully assess their financial situation and plan accordingly. The full Go Banking Rates study provides a detailed breakdown of how long a $1 million retirement fund would last in each state, offering valuable insights for those preparing for this significant life milestone.
