How to Retire Comfortably with $1 Million: A State-by-State Guide
Americans are used to the idea of needing to save a minimum of $1 million to retire comfortably, but depending on where they choose to retire, that could be an overestimation or a huge underestimation. In order to get an idea of how far $1 million will go in retirement from state to state, GoBankingRates looked into living costs by state and how long $1 million would last. Read on to find out what GoBankingRates determined about how stretching retirement funds in every state.
Housing and Utilities
GoBankingRates used 2020 data from the Bureau of Labor Statistics for their research, which included housing costs, utility bills, groceries, health care, and transportation. The analysis assumed a retiree would be 65 or older.
The Least and the Most Durable Funds
Out of the fifty states included in the analysis, no location would see $1 million last an entire 25-year retirement. The least durable funds are in Hawaii where a million dollars would run out after 10 years, and 18 years in Florida. Comparatively, the funds will last the longest of all states at 22 years in Mississippi.
Mississippi scored fifth in Bankrate’s state rankings for best states to retire in due to its affordability and weather, though it didn’t make the cut in the health care or overall well-being categories.
Retirement Funds and Inflation
Retirement funds can decrease in value due to inflation, so it’s important to consider that when planning for retirement. GoBankingRates conducted similar research in 2022 and found that $1 million would last around 20 years in Florida and just over 25 years in Mississippi.
Personalizing Retirement Savings Goals
Retirement goals are, of course, very personal and shouldn’t be measured solely in dollar signs. Whether someone desires to save $1 million or not, it’s important to have a clear savings goal in mind. An article from CNBC recommends using a retirement calculator to determine how much you’ll need to save to maintain a desired lifestyle.
Fidelity recommends saving 15% of your income towards retirement, including your employer’s 401k match. They suggest starting small and increasing your savings rate by 1% annually until you reach the 15% goal.
By taking retirement planning step by step, you can get closer to achieving your retirement goals. Whether you decide you want to retire with $5 million, or $1 million, or something even more modest, you’ll have a better chance of reaching your goal when you have a plan in place.