How Long Does $1 Million Last After Retirement? Research Finally Has the Answer
One million dollars is deemed a gold standard for the total sum one should have in a retirement fund. However, recent trends indicate that this amount may be insufficient. A new report reveals that $1 million nest egg may not last more than a decade depending on where you live.
As noted by a research and data analyst at GoBankingRates, Andrew DePietro, keeping rising inflation, real estate and living expenses into consideration, the lasting effect of $1 million is diminishing by the year.
GoBankingRates, a personal finance website, carried out a comparison of average expenses for people aged 65 and above including housing, utilities, healthcare, groceries and transportation in all states to determine how long a $1 million nest egg can last after retirement. It is worth noting that the report didn’t take investment income during the retirement period into consideration.
The results showed that almost all states experienced a decline the purchasing power of $1 million in comparison to last year. The decline was mostly as a result of nation-wide increase in living expenses.
Based on the report, the top states where a million dollars has the longest lasting effect are:
For Mississippi, a million dollars will last twenty five years, eleven months and thirty days. It is a state that allows you get a complete quarter century out of a $1 million retirement fund.
Oklahoma reportedly has a lot in store for retirees. There, groceries cost only $3,410 while transportation costs $6,078. The housing expenses come at $11,946 making it the nation’s fourth cheapest real-estate market. In Oklahoma, it will take twenty four years, eight months and twenty four days for a million dollars nest egg to get exhausted.
It will take twenty four years, seven months and fourteen days for $1 million nest egg to get used up in Michigan.
The average yearly transportation costs for the Great Lake State is $6,984. Michigan, however, provides an avenue for big savings in virtually all other categories with the inclusion of roughly 25% on the national average for yearly housing costs of $12,582.
The yearly cost of living in this state is $40,631 including $12,232 in annual housing costs and $3,275 in groceries, making it the fifth-cheapest state in the U.S. Healthcare costs in Arkansas is $5,281 and transportation can cost around $5,962 which is the lowest in the country.
It will take twenty four years, seven months and four days to use up the $1 million in Arkansas.
Utilities in Alabama can cost higher than the normal average at $3,867. Alabama, however, makes up for that in other ways. The state has the lowest healthcare cost in the country at $5,185 and the housing only costs $11,597. Here, it will also take twenty four years, seven months and four days to exhaust a million dollars nest egg.
On the other hand, there are some of the most expensive states in the U.S. where your million dollars would last for the shortest duration:
Your $1 million nest egg will last for eleven years, eight months and twenty days in Hawaii. The annual cost of groceries in the state is around $5,806 which is considered the highest in U.S. The annual housing comes pretty high at $47,928.
A million dollar nest egg could exhaust in fifteen years, five months and twenty seven days in California. This state requires a yearly expenditure of over $60,000 as retirees spend $64,516 annually on rent, utilities and other expenses. Housing in California can cost around $33,234.
Sixteen years, three months and twenty two days is the time it takes for a million-dollar nest egg to get used up in New York. The cost of utilities in New York is relatively low, but transportation and groceries cost in New York City rank as part of the highest in the nation. The annual housing cost comes at an average of $30,056.
The duration it takes to spend up your retirement savings in Alaska is sixteen years, eight months and six days. Living expenses in Alaska can cost around $59,895 per year whereas the grocery bills come at $4, 846. A decent family-sized home can set you back by $22,288 per year.
It will take sixteen years, eight months and twenty nine days to exhaust your $1 million nest egg in Maryland. The housing cost in Maryland is $28,087 annually. In addition, a retiree can spend $7,114 annually on transportation. The total living expenses in Maryland is $59,666 annually.
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