Is $500,000 enough for retirement? It depends on how much you spend, and that depends a lot on where you live.
Saving for retirement isn’t easy, and it’s tough to know how much you’ll need. The average American has a net worth of $79,952, according to a 2021 report by Credit Suisse.
Advisers often recommend that by age 65 you should have between eight times and 11 times your desired income in retirement savings. So, if you make $50,000 a year, you’ll need around $500,000. If that seems like a daunting task, you’re not alone. Some 75% of Americans fear they can not save enough money to retire.
What about Social Security? Will it be enough? Can you rely on it even being there when you retire? To add to the challenge, the money you withdraw from your retirement accounts is taxed, depending on the type of account. Inflation, too, can affect your retirement plans.
Is $500,000 enough? It depends on how much you spend, and that depends a lot on where you live. This list looks at how long a half million in savings will last in every state.
To determine how long $500,000 will last in each state, personal finance site GOBankingRates used Bureau of Labor Statistics’ 2020 Consumer Expenditure Survey data to find the national average annual expenditures for people 65 and older, then factored in each state’s cost of living index score for 2021 from the Missouri Economic Research and Information Center. Then they divided $500,000 by each state’s average annual expenditures estimate. They also factored in the average annual cost of groceries, housing, utilities, transportation, and healthcare for people 65 and older in each state using MERIC cost of living indexes.
The figures may seem depressing: $500,000 is a lot of money to most Americans and six or seven years isn’t very long to make it last. Financial planners often advise that you plan to live into your 90s—that’s easily 30 years if you retire at 65. That’s why they often recommend you invest the money, which will likely make it last longer. If you had a 4% annual investment return, you could withdraw $20,000 a year without much affecting your balance.
Here’s how long $500,000 will last in every state.
Hawaii
5 years, 5 months, 8 daysAnnual expenditure: $91,970
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New York
7 years, 1 month, 1 dayAnnual expenditure: $70,512
California
7 years, 4 months, 22 daysAnnual expenditure: $67,657
Massachusetts
7 years, 9 months, 11 daysAnnual expenditure: $64,232
Oregon
8 years, 0 months, 29 daysAnnual expenditure: $61,900
Alaska
8 years, 3 months, 7 daysAnnual expenditure: $60,473
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Maryland
8 years, 5 months, 19 daysAnnual expenditure: $58,998
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Connecticut
8 years, 7 months, 20 daysAnnual expenditure: $57,856
Rhode Island
8 years, 11 months, 19 daysAnnual expenditure: $55,763
Vermont
8 years, 11 months, and 4 daysAnnual expenditure: $55,667
>> Plus: How Long $1 Million in Retirement Savings Will Last in 50 U.S. Cities
New Jersey
9 years, 1 month, 12 daysAnnual expenditure: $54,811
Maine
9 years, 1 month, 19 daysAnnual expenditure: $54,716
Washington
9 years, 5 months, 1 dayAnnual expenditure: $53,098
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New Hampshire
9 years, 6 months, 22 daysAnnual expenditure: $52,289
Delaware
9 years, 8 months, 26 daysAnnual expenditure: $51,338
Nevada
9 years, 10 months, 20 daysAnnual expenditure: $50,576
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Colorado
9 years, 11 months, 23 daysAnnual expenditure: $50,101
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Arizona
10 years, 2 months, 6 daysAnnual expenditure: $49,102
Pennsylvania
10 years, 2 months, 31 daysAnnual expenditure: $48,768
Idaho
10 years, 3 months, 15 daysAnnual expenditure: $48,578
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Virginia
10 years, 3 months, 26 daysAnnual expenditure: $48,435
South Dakota
10 years, 4 months, 25 daysAnnual expenditure: $48,055
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Montana
10 years, 5 months, 9 daysAnnual expenditure: $47,912
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Florida
10 years, 5 months, 23 daysAnnual expenditure: $47,722
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Minnesota
10 years, 6 months, 4 daysAnnual expenditure: $47,579
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Utah
10 years, 7 months, 10 daysAnnual expenditure: $47,103
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North Dakota
10 years, 8 months, 12 daysAnnual expenditure: $46,723
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Wisconsin
10 years, 10 months, 24 daysAnnual expenditure: $45,866
North Carolina
10 years, 11 months, 23 daysAnnual expenditure: $45,533
Illinois
11 years, 1 month, 19 daysAnnual expenditure: $44,867
Wyoming
11 years, 1 month, 19 daysAnnual expenditure: $44,867
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Nebraska
11 years, 2 months, 21 daysAnnual expenditure: $44,582
South Carolina
11 years, 2 months, 24 daysAnnual expenditure: $44,534
Kentucky
11 years, 3 months, 15 daysAnnual expenditure: $44,296
Louisiana
11 years, 3 months, 19 daysAnnual expenditure: $44,248
Texas
11 years, 4 months, 29 daysAnnual expenditure: $43,820
Ohio
11 years, 6 months, 5 daysAnnual expenditure: $43,440
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Michigan
11 years, 6 months, 5 daysAnnual expenditure: $43,440
Arkansas
11 years, 6 months, 23 daysAnnual expenditure: $43,249
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Indiana
11 years, 7 months, 6 daysAnnual expenditure: $43,107
West Virginia
11 years, 7 months, 10 daysAnnual expenditure: $43,059
Iowa
11 years, 8 months, 8 daysAnnual expenditure: $42,774
Missouri
11 years, 8 months, 12 daysAnnual expenditure: $42,726
Tennessee
11 years, 9 months, 22 daysAnnual expenditure: $42,345
Georgia
11 years, 9 months, 29 daysAnnual expenditure: $42,250
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Alabama
11 years, 11 months, 16 daysAnnual expenditure: $41,822
Oklahoma
11 years, 11 months, 16 daysAnnual expenditure: $41,822
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Kansas
12 years, 1 month, 23 daysAnnual expenditure: $41,156
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Mississippi
12 years, 7 months, 13 daysAnnual expenditure: $39,633
See the detailed methodology for this list at GoBankingRates.com.
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