Home Personal Finance A $1M nest egg may not provide a comfortable retirement in America — and won’t even last you 15 years in some ultra-expensive states. Here are 5 of the priciest places your money won’t go far

A $1M nest egg may not provide a comfortable retirement in America — and won’t even last you 15 years in some ultra-expensive states. Here are 5 of the priciest places your money won’t go far

by admin

A $1M nest egg may not provide a comfortable retirement in America — and won’t even last you 15 years in some ultra-expensive states. Here are 5 of the priciest places your money won’t go far

Saving for retirement can be a stressful process, especially if the dream destination for your golden years comes with sky-high costs.

Even $1 million in the bank may no longer be enough to ensure a comfortable retirement. That amount of money can run out fast, according to a recent study conducted by GoBankingRates. In some U.S. states, it might not even last 15 years.

Don’t miss

The personal finance publication analyzed data from the Bureau of Labor Statistics’ 2020 Consumer Expenditure Survey and 2021 data from the Missouri Economic Research and Information Center to assess costs for groceries, utilities, transportation and health care.

States were then ranked by how long $1 million in savings could last for residents. The results showed that this kind of safety net could last for decades in some states — and far fewer years in others.

Here are the top five states with super high costs you should probably avoid when seeking a retirement destination.

Alaska

How long $1 million will last: 15 years 3 months 12 days

Alaska is not the most popular state to retire in — it’s frigid, snowy and also located on the other side of Canada. This isolated lifestyle is precisely what makes The Last Frontier so costly.

Groceries, which are mostly transported into the state over long distances, will cost you a pretty penny, at $5,927 a year. Although house prices hover around the national average, with the average value in the state at roughly $346,800, according to Zillow, you’ll cough up significantly more for utilities at around $5,425 anually.

To make matters worse, Alaska comes with some of the highest health-care costs in the country due to a limited number of physicians and health-care providers.

New York

How long $1 million will last: 14 years 1 month 15 days

You’ll uncover some pretty towering expenses if you decide to retire in the Empire State, even if you’re not opting for New York City’s cramped and costly apartments.

Housing costs stretch over $20,000 a year, with the average home value across the state at just over $450,000, according to Zillow — and it’s even leading the super wealthy to flee to cheaper states in droves.

New York also comes with a hefty tax burden. Income taxes range from 4% to 10.9% depending on income, but you’ll also have to pay additional local taxes if you reside in the Big Apple or Yonkers.

Read more: This Pennsylvania trio bought a $100K abandoned school and turned it into a 31-unit apartment building — how to invest in real estate without all the heavy lifting

California

How long $1 million will last: 13 years 9 months 29 days

California is the most populated state in the U.S. and it’s easy to see why — gloriously sunny weather and excellent proximity to beaches. It’s home to plenty of active retirement communities as well.

But like New York, the Golden State comes with incredibly expensive housing costs. California boasts some of the highest income tax rates in the country, pushing some of the ultra-wealthy to cheaper states as well.

In total, a retiree would spend about $72,300 a year on basic living expenses, according to GoBankingRates — which means $1 million in savings wouldn’t stretch very far at all.

Massachusetts

How long $1 million will last: 12 years 9 months 14 days

This New England state is the seventh-smallest state in the country, but includes massive costs for retirees.

In Massachusetts, housing costs add up to over $22,500 each year, with the average price of a home in the state being over $585,000, according to Zillow.

You’ll also shell out around $8,000 annually for health care expenses, per GoBankingRates.

Hawaii

How long $1 million will last: 10 years 3 months 22 days

In Hawaii, a $1 million nest egg will last you little more than a decade due to its exorbitant cost-of-living expenses — adding up to a whopping $96,982 a year.

Obtaining groceries in the faraway island state may cost even more than they would in Alaska at $6,678 a year, since many resources come from the mainland. Housing costs come close to $32,000 annually, while the average home is valued at nearly $832,000, according to Zillow.

What to read next

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

You may also like

Leave a Comment