Retirees in Honolulu might want to have a sizable nest egg. Hawaii finishes last among states in how long $1 million will last in retirement. Is having $1 million in savings enough to retire?
A lot depends on where you live, according to an analysis. By its reckoning, a stash of that size wouldn’t last very long in Hawaii, for example, but it would go a lot further in West Virginia. The best and worst states from the study—which assumes people also will have Social Security payments—are:
West Virginia: 88.70 years
Mississippi: 87.16 years
Arkansas: 76.93 years
Louisiana: 76.54 years
Oklahoma: 71.18 years
Kentucky: 69.17 years
Alabama: 67.23 years
Iowa: 65.97 years
Kansas: 65.29 years
Ohio: 62.12 years
Rhode Island: 27.09 years
Oregon: 26.78 years
Utah: 26.46 years
New Hampshire: 26.28 years
Colorado: 25.15 years
New Jersey: 24.20 years
Washington: 21.92 years
Massachusetts: 19.35 years
California: 16.29 years
Hawaii: 12.48 years
This study highlights the significant impact of geographic location on the longevity of retirement savings.
Looking to retire early? Some states will require more saving than others. Getting to retirement means you’ve worked hard, invested well, and earned yourself those golden years to come.
But just how much money do you need to have that comfortable retirement we all dream of? That largely depends on where you live. GoBankingRates released its latest data on how much money people need to save monthly for a comfortable retirement.
The study analyzed data from the U.S. Census American Community Survey, the Missouri Economic and Research Information Center, the Bureau of Labor Statistics Consumer Expenditure Survey, the Zillow Home Value Index, the Federal Reserve Economic Data, and the Social Security Administration. The analysis factored in a retirement age of 65 and a life expectancy of 85, including starting to save at ages 20 and 30. The calculations also factored in the average monthly Social Security benefits at $1,876 for one person.
After crunching the numbers, GoBankingRates found that you need to have more than $1 million in savings to retire comfortably in 23 states for 20 years. These states include California, Massachusetts, Washington, New Jersey, Colorado, New Hampshire, Utah, Oregon, Rhode Island, Alaska, New York, Connecticut, Montana, Idaho, Nevada, Maryland, Arizona, Maine, Vermont, Florida, Virginia, and Delaware. Hawaii stands out as the most expensive state, requiring more than $3 million in savings for a 20-year comfortable retirement.
Specifically, a comfortable retirement to age 85 in Hawaii requires $3,105,384. To achieve this, GoBankingRates explained you would need to save $5,751 a month starting at age 20, or $7,394 a month starting at age 30, along with Social Security benefits.
Hawaii: the least affordable retirement state
However, there are still plenty of places where $500,000 in savings offers a comfortable retirement. These include Louisiana ($499,020), Arkansas ($489,937), Mississippi ($442,620), and West Virginia, the cheapest state of all, at $434,501. For those finding U.S. costs too high, retiring abroad might be an attractive option.
Several countries, such as Mexico, Panama, and Portugal, offer more affordable monthly living expenses and welcome American retirees. A million dollars does not go as far as it used to — at least not if you live in Hawaii or California. GOBankingRates recently analyzed data to find out how long $1 million plus Social Security would last retirees across America.
If you live in Hawaii or California, it won’t even last you 20 years. In the West, the best states for stretching your retirement savings are New Mexico, Wyoming, and Arizona. In these states, the million bucks will keep you well for at least 25 years.
Seven other states also offer a comfortable retirement period with $1 million plus Social Security. For this study, GOBankingRates analyzed each state to determine how long $1 million in retirement savings plus Social Security benefits would last. The analysis considered cost-of-living indexes sourced from Missouri’s Economic and Research Information Center, which included costs for groceries, healthcare, housing, utilities, transportation, and miscellaneous expenses.
Using these indexes along with national average expenditure costs for retired residents from the Bureau of Labor Statistics Consumer Expenditure Survey, the average expenditure cost for each state was calculated. The average single-family home value from November 2024 was sourced from the Zillow Home Value Index for each state. Assuming a 10% down payment and the most recent national average 30-year fixed mortgage rate from Federal Reserve Economic Data, the average mortgage was calculated.
Combining the mortgage and expenditure costs, the overall cost of living was established. The average Social Security benefits for one person, sourced from the Social Security Administration’s Monthly Statistical Snapshot for November 2024, were subtracted from this to find the net monthly cost of living. Assuming a retirement savings of $1 million, the drawdown time was calculated for each state.
The data was collected and is up-to-date as of January 6, 2025. While places like Hawaii and California are known for their high cost of living, retirees looking to make their savings last should consider more affordable states like New Mexico, Wyoming, and Arizona. In these and several other states, $1 million plus Social Security offers a comfortable and lengthy retirement.
