How much do you need to retire?
The conventional wisdom, as delivered by the media and many financial experts, seems to have settled on $1 million. Even AARP recently weighed in on the debate, claiming that everyone needs between $1.0 million and $1.5 million saved before they step away from the office. Their logic is that we can expect to live for 22 years after we call it a career, and around one million bucks is the golden number for comfortable living during that time. But is it really that simple? Is a one-size-fits-all approach to retirement realistic?
My answer is no. Every retiree’s budget and financial needs are different. I’ve written a lot about how you can retire comfortably with just half a million dollars stashed away.
Geography plays a huge role in determining how much you need to retire. America is a big country. And where you choose to live during retirement can make or break almost any budget.
Sure, if you’re independently wealthy and don’t have a care in the world, you can afford live in a sprawling, posh New York apartment. But what about the rest of us? Real estate is the great equalizer when it comes to planning for a comfortable, happy retirement, so it pays to choose your retirement home state carefully.
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For instance, the average cost of housing in California is $700,000. Compare that to a state like, say, Ohio, where the average cost of a house is only $190,000, and you see what I mean.
So where should you settle down as you move into the post-career portion of your life? Well, that all depends on your geographic preferences and, of course, your budget.
Clark.com recently reported on research done by Gobankingrates.com. The site released a state-by-state analysis that shows just how far your cool million will stretch in each state in the US for 22 years. According to Gobankingrates.com, researchers used a methodology that took into account average spending of folks age 65 and older once they retire. These expenditures included groceries, utilities, transportation, healthcare, and housing.
Take a look at this list of how long $1 million will last you in all 50 states to see where you may like to call home.
50. Hawaii
$1 million will last: 11 years, 11 months
49. California
$1 million will last: 16 years, 5 months
48. Alaska
$1 million will last: 17 years, 0 months
47. New York
$1 million will last: 17 years, 1 month
46. Massachusetts
$1 million will last: 17 years, 4 months
45. Connecticut
$1 million will last: 17 years, 4 months
44. Maryland
$1 million will last: 17 years, 4 months
43. Oregon
$1 million will last: 17 years, 7 months
42. Rhode Island
$1 million will last: 18 years, 2 months
41. New Jersey
$1 million will last: 18 years, 6 months
40. Vermont
$1 million will last: 18 years, 7 months
39. New Hampshire
$1 million will last: 19 years
38. Maine
$1 million will last: 19 years, 6 months
37. Washington
$1 million will last 21 years, 1 month
36. Delaware
$1 million will last: 21 years, 10 months
35. Pennsylvania
$1 million will last: 21 years, 11 months
34. Virginia
$1 million will last: 22 years
33. Colorado
$1 million will last: 22 years
32. Nevada
$1 million will last: 22 years
31. South Carolina
$1 million will last: 22 years, 3 months
30. Florida
$1 million will last: 22 years, 4 months
29. South Dakota
$1 million will last: 22 years, 4 months
28. Minnesota
$1 million will last: 22 years, 6 months
27. North Dakota
$22 million will last: 22 years, 7 months
26. Montana
$1 million will last: 22 years, 10 months
25. Illinois
$1 million will last: 23 years, 1 month
24. Arizona
$1 million will last: 23 years, 2 months
23. Wisconsin
$1 million will last: 23 years, 3 months
22. New Mexico
$1 million will last: 23 years, 3 months
21. West Virginia
$1 million will last: 23 years, 6 months
20. Wyoming
$1 million will last: 23 years, 8 months
19. Kentucky
$1 million will last: 23 years, 8 months
18. North Carolina
$1 million will last: 23 years, 8 months
17. Utah
$1 million will last: 23 years, 10 months
16. Nebraska
$1 million will last: 23 years, 10 months
15. Louisiana
$1 million will last: 23 years, 10 months
14. Ohio
$1 million will last: 24 years, 2 months
13. Iowa
$1 million will last: 24 years, 3 months
12. Kansas
$1 million will last: 24 years, 7 months
11. Idaho
$1 million will last: 24 years, 8 months
10. Alabama
$1 million will last: 24 years, 9 months
9. Indiana
$1 million will last: 24 years, 9 months
8. Texas
$1 million will last: 24 years, 9 months
7. Missouri
$1 million will last: 24 years, 10 months
6. Georgia
$1 million will last: 24 years, 11 months
5. Tennessee
$1 million will last: 25 years
4. Michigan
$1 million will last: 25 years
3. Oklahoma
$1 million will last: 25 years, 2 months
2. Arkansas
$1 million will last: 25 years, 6 months
1. Mississippi
$1 million will last: 26 years, 4 months
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