A new study from GoBankingRates has identified the states where $1 million in retirement savings, combined with Social Security benefits, would last the longest. It also revealed where funds run out the fastest due to high living costs and average monthly expenditures. According to a Northwestern Mutual study, the amount U.S. adults believe they need to save to retire comfortably surged to $1.46 million in 2024, up from $951,000 in 2019.
However, Americans had only saved, on average, $88,400 for retirement by 2024, leaving a significant gap between expectations and reality. GoBankingRates examined how far a hypothetical $1 million in retirement savings will stretch in each state using data from the U.S. Census American Community Survey, the U.S. Bureau of Labor Statistics Consumer Expenditure Survey, and Missouri’s Economic and Research Information Center. The study considered the costs of necessities like housing, food, transportation, and utilities in each state but did not factor in federal and state income taxes.
The states where retirement funds deplete the fastest generally have the highest living costs. Hawaii tops the list—$1 million in retirement savings plus Social Security benefits would last less than 13 years, primarily due to high housing costs. Only 4% of the state’s land is allocated for residential purposes, leading to high home prices.
Benefits of retiring in affordable states
The median home price in Hawaii is $850,000. California and Massachusetts also have high living costs, with average monthly expenses exceeding $2,200.
In these states, $1 million in retirement savings runs out in less than 20 years. Conversely, a $1 million retirement nest egg could last for more than 70 years in states with lower living costs. These states include West Virginia, where the average monthly expenditure is $1,833. This allows $1 million to last nearly 89 years due to a cost of living 9% lower than the national average and housing costs 21% lower than average.
With an average monthly expense of $1,784, Mississippi allows $1 million to last over 87 years. The state has the lowest housing prices in the U.S. In Arkansas, an average monthly expenditure of $1,725 allows $1 million to last nearly 77 years, while in Louisiana, monthly expenses of $1,785 result in $1 million lasting about 76.5 years. The states where $1 million in retirement savings will run out more quickly include Hawaii (12.48 years), California (16.29 years), Massachusetts (19.35 years), Washington (21.92 years), and New Jersey (24.20 years).
On the other hand, the states where $1 million in retirement savings lasts the longest are West Virginia (88.79 years), Mississippi (87.16 years), Arkansas (76.93 years), Louisiana (76.54 years), and Oklahoma (71.18 years). For the full report, visit GoBankingRates.
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