One million dollars has long been considered the ideal retirement savings goal. But in many states, that amount won’t be enough for most people to last through retirement, as the cost of living is rising.
People are living longer in retirement, often multiple decades. So that $1 million nest egg may run out quicker than you think. Researchers calculated the average annual expenditures for retirees to determine how long $1 million in savings would last in every state.
In the most expensive state, Hawaii, $1 million would last less than ten years. On the flip side, in the states where $1 million lasts the longest, it will stretch over 19 years. And many of those states happen to be in the South.
Here’s a look at the top 5 Southern states where $1 million in retirement savings lasts the longest:
In West Virginia, $1 million will last 20 years, three months, and 19 days. The total annual expenditures for retirees in West Virginia are the lowest in the South. Mississippi comes in second.
There, $1 million will last 19 years, 11 months, and 12 days. Mississippi retirees have the second lowest annual expenses in the Southern states.
Top Southern states for retirees
Oklahoma takes the third spot. A $1 million nest egg in Oklahoma will last 19 years, 11 months, and 5 days. Annual retiree costs in Oklahoma are the third lowest among Southern states.
In Alabama, $1 million in savings will last 19 years, seven months, and 11 days. Alabama has the fourth lowest annual expenditures for retirees in the South. Arkansas rounds out the top five.
Retirees with $1 million saved can expect it to last 19 years, six months, and 15 days in Arkansas. The state has the fifth lowest annual retiree expenses in the Southern region. To find these figures, researchers first sourced the national average annual expenditures for Americans 65 and older from 2022 Bureau of Labor Statistics data.
They then estimated state-level annual expenses by multiplying the national numbers by each state’s cost of living index score for the third quarter of 2023. Finally, they calculated how long $1 million would last in each state by dividing $1 million by the state’s estimated annual retiree expenses. The analysis ranked all 50 states plus D.C. based on the longevity of a $1 million retirement fund.
All data is current as of April 23, 2024. The key takeaway: Location makes a big difference in how far your retirement savings will stretch. A $1 million nest egg lasts years longer in states with lower costs of living, many of which are in the South.
Cameron is a highly regarded contributor in the rapidly evolving fields of artificial intelligence (AI) and machine learning. His articles delve into the theoretical underpinnings of AI, the practical applications of machine learning across industries, ethical considerations of autonomous systems, and the societal impacts of these disruptive technologies.
