How Long Will $1 Million in California Retirement Savings Last You? take a look
How long could you enjoy a comfortable retirement in California with $1 million?A new study by personal finance service GoBankingRates assessed how long $1 million in retirement savings would last for people in the Golden State.
A million bucks may sound like a big “chunk of change” but “it doesn’t last quite as long as you might think it would,” GoBankingRates writer J. Arky wrote in a May 31 article titled “How Long Will $1 Million in Retirement Savings Last in Every State.”
The average American needs about $1.9 million to retire comfortably, a recent survey conducted by Schwab Retirement Plan Services found.
“This number is way out of reach for many Americans,” Arky wrote, “considering the average amount Americans have saved between the ages of 55 and 65 is $197,322, a far cry from what you’ll need in retirement.”
Ho long does $1 million in retirement savings last in California?
According to GoBankingRates, $1 million in savings would last about 12 years, eight months and five days.
Here’s how that breaks down in the Golden State:
- Annual groceries cost: $5,387
- Annual housing cost: $22,530
- Annual utilities cost: $5,202
- Annual transportation cost: $6,283
- Annual healthcare cost: $8,226
- Total annual expenditures: $78,864
That makes California one of the top five most expensive places to retire based on total annual spending costs, GoBankingRates found.
How does California compare to other US states?
Want to make your retirement savings last longer? You might want to look outside of California, according to GoBankingRates.
West Virginia was the best state in the nation for stretching for your retirement dollars, the site’s study found.
It would take 20 years, three months and 19 days to spend $1 million in West Virginia, GoBanking Rates said, noting that total annual spending rounds off to about $49,000 in the Appalachian state.
Mississippi, Oklahoma, Kansas and Alabama also fall on the cheaper end of the spectrum of places were you can retire, according to the study.
In contrast, Hawaii is the most expensive place to spend your retirement, GoBankingRates said.
On average, yearly spending in the state totals about $104,000. That means $1 million in retirement savings would last about nine years, seven months and 25 days.
Other pricey places to retire include Massachusetts, New York, Alaska and the District of Columbia, according to the study.
How did GoBankingRates come up with findings?
To find how long $1 million would last across the country, GoBankingRates looked at the national average annual expenditures for people 65 and older, based on U.S. Bureau of Labor Statistics’ 2022 Consumer Expenditure Survey data.
The site then multiplied the national figure by the overall cost of living index score for all 50 states and the District of Columbia for the third quarter of 2023 from the Missouri Economic Research and Information Center.
Finally, GoBankingRates divided $1 million by each state’s average annual expenditures estimate.
The site provided supplemental information on the average annual cost of groceries, housing, utilities, transportation,and healthcare for people 65 and older by using MERIC’s cost of living indices for each category.