12 States Where $500K Will Last Longest in Retirement
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Conventional wisdom says you need $1 million to retire comfortably, but recent research suggests that is not nearly enough. Whatever the case, $1 million is a pipe dream for many Americans.
GoBankingRates released a study this month that sought to come up with a more realistic figure for retirement finances by asking how long $500,000 will last in each state. The findings show that where retirees choose to live is crucial because of the difference in cost of living across the country.
Retirees in the most expensive states would see their $500,000 nest egg last between five and seven fewer years, on average, than it would in the least costly ones. Expenses between the two extremes differ by tens of thousands of dollars.
To determine how long $500,000 will last across the 50 states and the District of Columbia, researchers at GoBankingRates first tapped the Bureau of Labor Statistics’ 2020 Consumer Expenditure Survey data to find the national average annual expenditures for people 65 and older.
They then created state-level annual expenditure estimates by multiplying the national figure by each state’s overall cost-of-living index score for 2021 from the Missouri Economic Research and Information Center.
Finally, they divided $500,000 by each state’s average annual expenditures estimate to find how many years that amount will last in each state.
See the gallery for the 12 states where $500,000 in retirement savings will last the longest.
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