According to a recent survey conducted by Northwestern Mutual involving 4,588 participants, a retirement savings figure of approximately $1.5 million is widely viewed as the “magic number” for many Americans. However, the longevity of this amount can significantly vary based on geographic location.

When considering the costs of living, $1.5 million would be insufficient for a household to sustain itself for a complete retirement period in some states. For instance, in Hawaii, this amount would likely last only 17 years, potentially leaving retirees struggling as they approach the end of their savings at age 65. Conversely, in West Virginia, the same amount could last an impressive 54 years, showcasing the stark contrasts across the nation.

This analysis by GOBankingRates utilized data from the Bureau of Labor Statistics’ 2023 Consumer Expenditure Survey, assessing typical annual expenditures of retirees on essential items such as food, housing, utilities, transportation, and healthcare. The data was then adjusted to reflect the cost of living in each state, using insights from the Missouri Economic Research and Information Center.

Importantly, the study focused on average expenses rather than just the minimum survival costs, thereby presenting a more accurate representation of retirement finances across the United States.

It comes as no surprise that states with significantly high housing costs, such as California, New York, and Massachusetts, rank among the most challenging locations for retirees to manage their finances. The differences in average housing expenses alone can differ by as much as $30,000 between states, with similar variances seen in utility and healthcare costs, albeit these latter expenses might constitute a smaller segment of a typical retiree’s budget.

Below is a summary of how long $1.5 million, together with Social Security benefits, would sustain retirees in each state, ordered alphabetically:

The Longevity of $1.5 Million in Retirement Savings Across Every U.S. State

Breaking news