For Americans planning to retire soon, having $1 million in savings might seem like enough, but depending on where someone decides to spend their post-working years, that money may or may not go very far.
A new study from Go Banking Rates analyzed how long a $1 million retirement fund will last nationwide.
The study assumed a retirement age of 65 or older and examined the annual cost of living expenses, such as housing, utilities, and food, in all 50 states. Researchers used the latest data from the Bureau of Labor Statistics’ 2020 Consumer Expenditure Survey and the Missouri Economic Research and Information Center.
In some states, like Mississippi and Oklahoma, a $1 million retirement fund would last about 22 years.
In other states like New York and Hawaii, which already have high cost of living expenses, the $1 million retirement fund would last less than 15 years.
For retirees in California, the annual cost of living expenses would be $72,319.57, meaning a $1 million retirement fund would last for about 14 years.
Retirement can often last 25 years or more, according to Fidelity.
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.
It’s important to note that retirement funds will look different for everyone. Experts and financial institutions, like Fidelity, recommend that people put away about 15% of their annual income for retirement.
But it’s ok if that amount isn’t feasible for everyone to do. Fidelity still recommends people put away at least 1% of their annual income until they reach that 15% mark.
The full Go Banking Rates study can be viewed here.
FAQs
Researchers at GoBankingRates, a personal finance site, found that the average Californian would run out of $1 million in retirement savings in 12 years, eight months and five days, spending about $80,000 a year on items such as housing and healthcare.
How long will $1 million last in retirement in California? ›
A recent study by personal finance website GoBankingRates found that it would take California residents about 12 years, eight months and five days to spend $1 million in retirement savings.
How long will $10000000 last in retirement? ›
Even under very dire circ*mstances, there's almost no way that $10 million isn't enough for you to retire at 50. Even if you parked the money in a checking account and didn't use it to generate further returns, you could live on $200,000 a year for 50 years before you ran out.
How long will 1.5 m last in retirement? ›
The 4% rule suggests that a $1.5 million portfolio will provide for at least 30 years approximately $60,000 a year before taxes for you to live on in retirement. If you take more than this from your nest egg, it may run short; if you take less or your investments earn more, it may provide somewhat more income.
How long will $3 m last in retirement? ›
As mentioned above, $3 million can easily carry you through 40 years of retirement, making leaving the workforce at 50 a plausible option. Many dream of early retirement, but if you're lucky enough to already have $3 million set aside for this phase of your life, you could do more than dream.
What age can you retire with $1 million dollars? ›
Retiring at 65 with $1 million is entirely possible. Suppose you need your retirement savings to last for 15 years. Using this figure, your $1 million would provide you with just over $66,000 annually. Should you need it to last a bit longer, say 25 years, you will have $40,000 a year to play with.
What is the best state to retire in 2024? ›
The best state to retire in 2024 is also one of the smallest in the U.S. At around 96 miles long and 35 miles wide, Delaware ranks as the No. 1 state to retire this year, according to Bankrate's list of the best states to retire for 2024. Last year, it placed second behind Iowa on Bankrate's list.
Can you retire on $1 million here's how far it will go? ›
Around the U.S., a $1 million nest egg can cover an average of 18.9 years worth of living expenses, GoBankingRates found. But where you retire can have a profound impact on how far your money goes, ranging from as a little as 10 years in Hawaii to more than than 20 years in more than a dozen states.
How many Americans have $1000000 in retirement? ›
You're not alone if your retirement account balances are far from the $1 million mark. While many people may aim for that goal, most don't reach it. Employee Benefit Research Institute (EBRI) data estimates that just 3.2% of Americans have $1 million or more in their retirement accounts.
What does $1 m retirement look like? ›
For example, if you have retirement savings of $1 million, the 4% rule says that you can safely withdraw $40,000 per year during the first year — increasing this number for inflation each subsequent year — without running out of money within the next 30 years. Of course, the 4% rule isn't perfect.
Retiring at 60 can create some problems, as that's earlier than you can claim Social Security and utilize Medicare. With $1.5 million in your IRA, you'll want to carefully plan your withdrawals to account for the future, as well as any growth you may garner as you're withdrawing in retirement.
How long can I retire on $500k plus Social Security? ›
Yes, it is possible to retire comfortably on $500k. This amount allows for an annual withdrawal of $30,000 and below from the age of 60 to 85, covering 25 years. If $20,000 a year, or $1,667 a month, meets your lifestyle needs, then $500k is enough for your retirement.
How many people have $3000000 in savings? ›
There are estimated to be a little over 8 million households in the US with a net worth of $3 million or more.
What percentage of retirees have 3 million dollars? ›
The Employee Benefit Research Institute (EBRI) estimates that 3.2% of retirees have over $1 million, and a mere 0.1% have $5 million or more, based on data from the Federal Reserve Survey of Consumer Finances. 2. What is the estimated amount of money needed to retire at age 60?
What percentage of retirees have $4 million dollars? ›
As mentioned, $1 million in tax-advantaged retirement accounts will put you in the top 3% of retirement savers. As far as net worth is concerned, estimates that use the same data from the Federal Reserve survey have found that a net worth of $4.64 million would put you in the top 3% of American households.
How long should 2 million dollars last in retirement? ›
You retire at 40 – With an estimated life expectancy of 90, you need 50 years of income. Across those years, $2 million could equate to approximately $40,000 annually or $3,333 monthly. This should be enough to cover you, but things may be tight if your outgoings are high as a retiree.
How many years will $300 000 last in retirement? ›
$300,000 can last for roughly 26 years if your average monthly spend is around $1,600. Social Security benefits help bolster your retirement income and make retiring on $300k even more accessible. It's often recommended to have 10-12 times your current income in savings by the time you retire.
How long does it take to save a million dollars for retirement? ›
The results: If you started saving $100 a week at age 25, you'd have over $1 million by age 65. If you start at age 30, your retirement savings would have grown to around $726,000 by 65. And if you began contributing $100 a week when you turned 35, you'd have close to $500,000 by retirement.
