In order to live comfortably in retirement, how much money do you intend to save? A million? More?
According to a recent survey of participants in retirement plans, Charles Schwab calculated the so-called “magic number” to be $1.8 million. $1.2 million was predicted by a Schroders poll. At $1.5 million, Northwestern Mutual divided the discrepancy.
An analysis by GOBankingRates looks at how long a retiree in each state would live on $1.5 million, which is the starting point for a retirement planning exercise.
Based on a 2024 cost-of-living index, the paper estimates how long $1.5 million in retirement savings would last by calculating the annual cost of living in each state after subtracting Social Security income.
It should come as no surprise that one of the most expensive places to spend your retirement years is New York.
How much does New York cost?
The analysis estimated that $1.5 million would endure for 29 years. After subtracting Social Security income, the cost of living in this case is $50,997 per year. Out of 50 states, the Empire State came in at number 47.
Which states are more expensive than New York for retirees?
How long will $1.5 million last in each of the three states where retirement costs are higher than in New York? Among them are:
- 17 years in Hawaii. After Social Security, the annual cost of living comes to $87,770.
- Massachusetts: 23 years. Living expenses per year: $65,117.
- California: 24 years. Living expenses per year: $63,795.
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Which five states have the lowest cost of living for retirees?
Kansas (52 years), Mississippi and Oklahoma (both 51 years), Alabama (50 years), and West Virginia (where $1.5 million will last 54 years) are the five states with the lowest retirement costs if you’re seeking for value.
For the typical retiree, those numbers are encouraging. According to longevity statistics, an American who retires at age 65 can anticipate living an additional 20 years.
According to the survey, the cost of living in the five states varies from $27,800 in West Virginia to $30,200 in Alabama per year.
You probably won’t need retirement funds for more than 40 years, even if you retire early and live to be 100. Additionally, in 32 states, $1.5 million will last you 40 years.
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This is how long $1.5 million lasts in states that are popular for retirement
The top five states for Americans who relocated specifically for retirement in 2024 are Massachusetts, Florida, Illinois, Kentucky, and North Carolina, citing a recent AARP analysis based on data from the moving-services marketplace Hire A Helper. Arizona, a well-known place to retire, didn’t make the top 10.
Retirees: Here’s how long your $1.5 million is expected to last in each of those five states if you choose to relocate there.
| State | Years $1.5M Lasts | Annual Cost of Living | Affordability Rank |
| Massachusetts | 23 years | $65,117 | 2nd most expensive |
| Florida | 39 years | $38,379 | 34th |
| Illinois | 44 years | $34,233 | 26th |
| Kentucky | 46 years | $32,670 | 17th |
| North Carolina | 42 years | $35,495 | 27th |
The average person does not have $1.5 million saved for retirement
But here is the truth. However, the majority of Americans do not have nearly $1.5 million saved for retirement.
For households in the 65–74 age range, the 2022 Survey of Consumer Finances found that the average senior with a retirement account has almost $200,000 saved. Of those households, only over half say they have retirement accounts.
Social Security is the primary source of income for many American retirees, and many of them appear to be doing well.
Because the federal benefit was never intended to pay the entire expense of retirement, the magic number notion suggests that you should save up to ten times your yearly wage for retirement in order to augment your Social Security income.
