S. States

A new study conducted by Go Banking Rates has analyzed the longevity of a $1 million retirement fund across all 50 states in the United States. The study, which took into account factors such as the cost of living expenses, has shed light on the varying lengths of time that a $1 million retirement fund can sustain retirees in different states.

The study assumed a retirement age of 65 or older and used the latest data from the Bureau of Labor Statistics' 2020 Consumer Expenditure Survey and the Missouri Economic Research and Information Center. It considered essential expenses such as housing, utilities, and food to determine the annual cost of living in each state.

Results from the study revealed that in some states like Mississippi and Oklahoma, retirees could expect a $1 million retirement fund to last for approximately 22 years. These states, with relatively lower cost of living expenses, offer retirees a longer duration of financial sustainability.

However, in states such as New York and Hawaii, which already have high cost of living expenses, the $1 million retirement fund would last less than 15 years. New York and Hawaii are known for their expensive housing, utilities, and food costs, which significantly impact the longevity of retirement funds.

California, known for its high cost of living, presents a similar scenario. According to the study, retirees in California would face annual living expenses of approximately $72,319.57. Consequently, a $1 million retirement fund in the state would last for around 14 years.

Financial experts have pointed out that the longevity of $1 million retirement funds has diminished over time due to changing factors like inflation. While it is advised that people put away about 15% of their annual income for retirement, it may not be feasible for everyone. However, financial institutions like Fidelity recommend that individuals save at least 1% of their annual income until they reach the 15% mark.

Retirement can often last 25 years or more, according to Fidelity. Therefore, these findings highlight the importance for individuals to carefully consider their retirement savings and expenditure plans to ensure a comfortable and financially sustainable future.

The full Go Banking Rates study can be viewed here, offering comprehensive insights into the longevity of retirement funds across different states.