After years of hard work, people hope to settle down and enjoy their retirement life leisurely. But one major driving force behind a peaceful and leisurely retirement life is money. On average, women will retire at 62 and men at 65. With the US average life expectancy of 79 years, retirement savings should last at least 14 to 17 years. Then, how many years will a million dollars last? In this article we shall talk about One Million Dollars In Retirement.
According to GoBankingRates, the annual expenditure of people 65 and older, Social Security benefits, and the cost of living index should tell how long your retirement savings will last. Using this information, they concluded that $1 million could last between 8-45 years, depending on the state you live in.
Memphis, Tennessee
In 2020, about 650,910 people resided in Memphis, Tennessee. Memphis’s cost of living index is lesser than average by more than 20%. The cost of living index is 76.0. Annual expenditure with and without Social Security benefits is $22,043.32 and $38,653.60, respectively. A retirement savings of $1 million will last for 45 years and 4 months.
El Paso, Texas
According to the US Census Bureau, El Paso had a population of 678,815 in 2020. Its cost of living index is among the lowest at 81.4. Annual expenditure after considering Social Security income is $24,789.76. Without Social Security benefits, the annual cost of living for people 65 and older is $41,400.04. In El Paso, Texas, a retirement savings of $1 million will last for 40 years, 3 months, and 3 weeks.
Wichita, Kansas
As of 2020, 390,566 people lived in Wichita, Kansas. This city enjoys a cost of living index of 82.1, which is lower than the average by 17.9. The annual cost of living is $$41,756.06. But Social Security benefits beat it down to $25,145.78. A person can live on $1 million retirement savings for 39 years, 8 months, and close to 4 weeks.
Tulsa, Oklahoma
Tulsa is a very large city in Oklahoma, with a population of 402,441 in 2020. The cost of living index in Tulsa is lower than that of Indianapolis by 0.3 (83.2). After factoring in Social Security income, the annual expenditure for people 65 and older is $25,705.24. Without Social Security benefits, it is $42,315.52. After dividing $1 million by annual expenditure after Social Security, $1 million will last for 38 years, 10 months, and 2 weeks.
Indianapolis
An estimated population of 896,962 live under a cost of living index of 83.5 in Indianapolis in 2022. Without Social Security benefits, annual expenditure will be $42,468.10. Social Security benefits will reduce annual expenditure to $25,857.82. With these figures, $1 million will last for about 38 years, 7 months.
What You Should Consider When Retiring
Retirement is an important decision. You should consider some vital factors to ensure that your retirement life is satisfactory.
- When you intend to retire
- What lifestyle will you have after retirement?
- How will you spend your time after retirement?
- How much is enough for retirement, and are you financially ready?
- How long will your retirement savings last after considering the cost of living, inflation, rate of return, Social Security benefits, and more?
Which States Will One Million Dollars Retirement Savings Last The Shortest?
The cost of living index in New York, San Jose, California, and San Francisco is very high. The lowest among them is about 87% more than the average cost of living index. In New York, $1 million in retirement savings will only last 12 years and 8 months. In San Jose, California, it’ll last 10 years and 9 months, and it’ll last for 8 years and 3 months in San Francisco.
How Can You Make One Million Dollars Last For A Lifetime In Retirement?
According to The Annual Expert, the only way $1 million can last for a lifetime in retirement is to buy an annuity with a lifetime income rider. Taking this action will ensure that regardless of how long you live, you will receive a set amount of money every month for the rest of your life.
Conclusion
$1 million is a great deal of money. But its usefulness towards your retirement life is dependent on many factors, such as where and how you intend to live. For a good retirement life, it is advisable to consult a professional when planning your retirement. It’ll save you a lot of trouble and reassure you.
Frequently Asked Questions
- How many people will retire with $1 million in their retirement savings?
According to Zippia, 10% of Americans have $1 million or more in their retirement savings.
- Is $1 million enough for retirement at age 50?
Yes, it is. If you purchased an annuity with a lifetime income rider, you can get $49,375 annually for as long as you live.
- How much can I get with a lifetime annuity of $1 million?
The earlier you purchase the annuity, the better. If you buy it at age 65 and start receiving payments immediately, you can get $56,400 annually. If you buy it at 35, you can get $276,000 annually after retirement.
