Connect with us

Personal Finance

Is $1 Million Enough for Retirement in America?

Published

on

Retirement Savings in America

Can I share this graphic?
Yes. Visualizations are free to share and post in their original form across the web—even for publishers. Please link back to this page and attribute Visual Capitalist.
When do I need a license?
Licenses are required for some commercial uses, translations, or layout modifications. You can even whitelabel our visualizations. Explore your options.
Interested in this piece?
Click here to license this visualization.

Is $1 Million Enough for Retirement in America?

The average American needs their retirement savings to last them 14 to 17 years. With this in mind, is $1 million in savings enough for the average retiree?

Ultimately, it depends on where you live, since the average cost of living varies across the country. This graphic, using data compiled by GOBankingRates.com shows how many years $1 million in retirement savings lasts in the top 50 most populated U.S. cities.

Editor’s note: As one user rightly pointed out, this analysis doesn’t take into account interest earned on the $1 million. With that in consideration, the above calculations could be seen as very conservative figures.

How Long $1 Million Would Last in 50 Cities

To compile this data, GOBankingRates calculated the average expenditures of people aged 65 or older in each city, using data from the Bureau of Labor Statistics and cost-of-living indices from Sperling’s Best Places.

That figure was then reduced to account for average Social Security income. Then, GOBankingRates divided the one million by each city’s final figure to calculate how many years $1 million would last in each place.

Perhaps unsurprisingly, San Francisco, California came in as the most expensive city on the list. $1 million in retirement savings lasts approximately eight years in San Francisco, which is about half the time that the typical American needs their retirement funds to last.

CityHow long $1 would last (years)Cost-of-living IndexAnnual expenditures
(after using annual Social Security)
Memphis, TN45.376$22,043
El Paso, TX40.381.4$24,789
Wichita, KS39.782.1$25,145
Tulsa, OK38.883.2$25,705
Indianapolis, IN38.683.5$25,857
Milwaukee, WI37.684.9$26,569
Oklahoma City, OK37.385.4$26,824
Columbus, OH37.285.5$26,875
Kansas City, MO36.786.2$27,231
Detroit, MI35.887.6$27,943
Baltimore, MD35.388.2$28,248
Louisville, KY35.388.4$28,349
San Antonio, TX34.489.7$29,011
Omaha, NE34.389.8$29,062
Albuquerque, NM33.691.1$29,723
Tucson, AZ33.391.6$29,977
Jacksonville, FL32.393.5$30,943
New Orleans, LA30.896.3$32,367
Houston, TX30.896.5$32,469
Charlotte, NC29.698.9$33,690
Forth Worth, TX29.399.8$34,148
Arlington, TX28.8100.6$34,554
Philadelphia, PA28.6101.2$34,860
Nashville, TN28.5101.4$34,961
Dallas, TX28.4101.6$35,063
Raleigh, NC28.2102.3$35,419
Fresno, CA28.1102.6$35,572
Phoenix, AZ27.6103.7$36,131
Mesa, AZ27.4104.2$36,385
Colorado Springs, CO27.3104.5$36,538
Virginia Beach, VA26.9105.6$37,097
Minneapolis, MN26.6106.5$37,555
Chicago, IL26.4106.9$37,759
Atlanta, GA26.3107.5$38,064
Las Vegas, NV24.8111.6$40,149
Sacramento, CA22.9118.2$43,506
Austin, TX22.7119.3$44,065
Miami, FL21.7123.1$45,998
Denver, CO20.4128.7$48,846
Portland, OR20.0130.8$49,914
Washington, D.C.16.4152.1$60,747
San Diego, CA15.4160.1$64,816
Long Beach, CA15.3160.4$64,969
Boston, MA15.1162.4$65,986
Seattle. WA14.0172.3$71,021
Los Angeles, CA13.9173.3$71,530
Oakland, CA13.8174.4$72,089
New York, NY12.7187.2$78,599
San Jose, CA10.8214.5$92,484
San Francisco, CA8.3269.3$120,355

A big factor in San Francisco’s high cost of living is its housing costs. According to Sperlings Best Places, housing in San Francisco is almost 6x more expensive than the national average and 3.6x more expensive than in the overall state of California.

Four of the top five most expensive cities on the list are in California, with New York City being the only outlier. NYC is the third most expensive city on the ranking, with $1 million expected to last a retiree about 12.7 years.

On the other end of the spectrum, $1 million in retirement would last 45.3 years in Memphis, Tennessee. That’s about 37 years longer than it would last in San Francisco. In Memphis, housing costs are about 2.7x lower than the national average, with other expenses like groceries, health, and utilities well below the national average as well.

Retirement, Who?

Regardless of where you live, it’s helpful to start planning for retirement sooner rather than later. But according to a recent survey, only 41% of women and 58% of men are actively saving for retirement.

However, for some, COVID-19 has been the financial wake-up call they needed to start planning for the future. In fact, in the same survey, 70% of respondents claimed the pandemic has “caused them to pay more attention to their long-term finances.”

This is good news, considering that people are living longer than they used to, meaning their funds need to last longer in general (or people need to retire later in life). Although, as the data in this graphic suggests, where you live will greatly influence how much you actually need.

Subscribe to Visual Capitalist
Click for Comments

Personal Finance

Ranked: The Best U.S. States for Retirement

Getting ready for retirement? See which states score the highest in terms of affordability, quality of life, and health care.

Published

on

Ranked: The Best U.S. States for Retirement

What is the most important aspect of retirement planning?

If you said finances, you’re probably right. But have you ever thought about where the best place is to retire? Being strategic about location can make a big impact on your quality of life, and perhaps help your savings go just a bit further.

To help break it down, we’ve visualized data from personal finance platform, WalletHub, which ranked the best U.S. states for retirement as of 2023.

Data and Methodology

WalletHub ranked each state using 47 metrics across three dimensions.

  • Affordability (7 metrics worth 40 points)
  • Quality of Life (22 metrics worth 30 points)
  • Health Care (18 metrics worth 30 points)

Here are some examples of what each dimension measures:

  • Affordability: Cost of living and taxation
  • Quality of Life: Quality of elder-abuse protections and crime rates
  • Health Care: Number of health professionals per capita and life expectancy

Visit the source for the full list of metrics.

The final scores (visualized as the bars in the infographic above) represent each state’s weighted average across all metrics. See below for more comprehensive results.

RankStateScoreAffordability
(rank)
Quality of Life
(rank)
Health Care
(rank)
1Virginia57.6161111
2TFlorida57.49428
2TColorado57.414275
4Wyoming55.65938
5Delaware55.563318
6New Hampshire55.03157
7South Dakota53.625309
8Minnesota53.54021
9Idaho53.2151731
10North Dakota53.0222520
11Utah52.7202426
12North Carolina52.6122335
13Missouri52.4172832
14Pennsylvania52.336312
15TMontana52.1241529
15TSouth Carolina52.143839
17Massachusetts51.94712
18California51.6321910
19Alaska51.326368
20Arizona51.1183525
21Wisconsin50.9341417
22Alabama50.714450
23Ohio49.827837
24Hawaii49.738294
25Nebraska49.3371615
26Iowa48.9351224
27Georgia48.674042
28Michigan48.0291836
29TMaine47.543613
29TNew Mexico47.5214630
31Indiana47.3233140
32TNevada47.2114241
32TTennessee47.224845
34TVermont47.14876
34TConnecticut47.144263
36Kansas46.8303233
37West Virginia46.434349
38Oregon46.1412121
39Texas45.9283734
40Rhode Island45.0393914
41Arkansas44.784944
42Maryland44.6462019
43Washington44.5451323
44Illinois44.3422227
45Louisiana43.9134547
46New York43.7501016
47Oklahoma43.6194743
48Mississippi40.8105048
49New Jersey40.2493422
50Kentucky38.8334146

According to this methodology, Virginia is currently the best state for retirement. Although the Southeastern state does not excel in any one dimension, it scores consistently well across all three to create a very balanced retirement profile.

This gives it a slight advantage over second place Florida, which excels in quality of life and affordability, but falls further behind in terms of health care. Third-placed Colorado is a mirror of Florida, offering excellent health care but a lower quality of life in comparison.

How to Interpret These Results

It’s important to remember that this ranking is purely based on data and the methodology above, and may not be tailored to your individual preferences.

For example, if you believe that health services will be very important during retirement, you may rank Minnesota (#1 in terms of health care) much higher than eighth place.

You may notice that prioritizing one dimension will often come at a trade-off in others. Looking at Minnesota once more, we can see that the state is also one of America’s most expensive.

Looking to retire outside of the U.S.? Check out this graphic on the top 25 countries to retire in.

Continue Reading

Subscribe

Popular