No matter how much planning you do, it can be hard to know exactly how much you'll need to save for retirement. A wide variety of factors, from your lifestyle to your health, can greatly alter what "your number" should be. However, on average, most Americans should find that $2 million will be more than enough to cover their retirement needs. In fact, according to a recent study by Northwestern Mutual, respondents felt they would need about $1.25 million on average to retire comfortably. However, living expenses in America vary greatly from state to state. Those who might be hard-pressed to retire on $2 million in some high-cost states might find the process much easier by simply crossing a few borders.
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To determine how far a $2 million nest egg would take a retiree on a state-by-state basis, GOBankingRates analyzed data from the Bureau of Labor Statistics' 2021 Consumer Expenditure Survey and each state's overall cost-of-living index score from the Q3 2021 Missouri Economic Research and Information Center. These total costs include basic, everyday expenses important to most retirees, such as groceries, transportation, healthcare and utilities. States were then ranked in reverse order, with the No. 1 state being the one where $2 million will last the longest.
Results were all over the board. On average, $2 million would last about 38 years in most states, but the range spread from over 45 years to fewer than 21 years. Put another way, this means that $2 million can last more than twice as long in some states over others. If you want to find out how long $2 million will last in your state -- or you're curious about which sections of the country will stretch your retirement nest egg longer -- read on for the results of the study.
Hawaii
Annual groceries cost: $6,678.05
Annual housing cost:$31,888.09
Annual utilities cost:$5,277.67
Annual transportation cost:$5,264.15
Annual healthcare cost: $8,457.09
Total annual expenditures: $96,982.26
How long will $2 million last in savings: 20 years, 7 months, 13 days
District of Columbia
Annual groceries cost: $4,730.84
Annual housing cost:$25,333.89
Annual utilities cost:$4,642.46
Annual transportation cost:$4,500.99
Annual healthcare cost: $6,664.44
Total annual expenditures: $79,984.29
How long will $2 million last in savings: 24 years, 11 months, 30 days
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Massachusetts
Annual groceries cost: $5,081.61
Annual housing cost:$22,570.95
Annual utilities cost:$4,752.25
Annual transportation cost:$5,498.02
Annual healthcare cost: $8,000.14
Total annual expenditures: $78,159.36
How long will $2 million last in savings: 25 years, 7 months, 2 days
California
Annual groceries cost: $5,050.13
Annual housing cost:$20,150.78
Annual utilities cost:$4,799.30
Annual transportation cost:$5,104.13
Annual healthcare cost: $7,711.91
Total annual expenditures: $72,319.57
How long will $2 million last in savings: 27 years, 7 months, 28 days
New York
Annual groceries cost: $4,910.72
Annual housing cost:$20,161.17
Annual utilities cost:$3,944.53
Annual transportation cost:$4,332.77
Annual healthcare cost: $7,247.93
Total annual expenditures: $70,755.34
How long will $2 million last in savings: 28 years, 3 months, 7 days
Alaska
Annual groceries cost: $5,927.05
Annual housing cost:$12,464.40
Annual utilities cost:$5,426.66
Annual transportation cost:$4,964.63
Annual healthcare cost: $10,664.51
Total annual expenditures: $65,436.96
How long will $2 million last in savings: 30 years, 6 months, 23 days
Maryland
Annual groceries cost: $5,045.63
Annual housing cost:$16,307.59
Annual utilities cost:$4,191.55
Annual transportation cost:$4,226.09
Annual healthcare cost: $6,636.32
Total annual expenditures: $64,706.98
How long will $2 million last in savings: 30 years, 10 months, 27 days
Oregon
Annual groceries cost: $4,784.81
Annual housing cost:$16,214.11
Annual utilities cost:$3,579.87
Annual transportation cost:$5,132.85
Annual healthcare cost: $7,676.76
Total annual expenditures: $63,716.30
How long will $2 million last in savings: 31 years, 4 months, 22 days
Vermont
Annual groceries cost: $4,802.80
Annual housing cost:$13,451.17
Annual utilities cost:$4,783.62
Annual transportation cost:$4,976.94
Annual healthcare cost: $7,704.88
Total annual expenditures: $60,692.12
How long will $2 million last in savings: 32 years, 11 months, 11 days
Connecticut
Annual groceries cost: $4,456.53
Annual housing cost:$12,620.21
Annual utilities cost:$4,991.43
Annual transportation cost:$4,599.46
Annual healthcare cost: $7,599.43
Total annual expenditures: $60,170.71
How long will $2 million last in savings: 33 years, 2 months, 27 days
New Hampshire
Annual groceries cost: $4,703.86
Annual housing cost:$11,155.64
Annual utilities cost:$4,458.18
Annual transportation cost:$4,574.85
Annual healthcare cost: $9,047.61
Total annual expenditures: $59,805.73
How long will $2 million last in savings: 33 years, 5 months, 8 days
Maine
Annual groceries cost: $4,640.90
Annual housing cost:$12,443.63
Annual utilities cost:$4,458.18
Annual transportation cost:$4,574.85
Annual healthcare cost: $9,047.61
Total annual expenditures: $59,701.45
How long will $2 million last in savings: 33 years, 5 months, 30 days
Washington
Annual groceries cost: $4,811.79
Annual housing cost:$13,503.10
Annual utilities cost:$4,171.94
Annual transportation cost:$4,570.74
Annual healthcare cost: $6,783.95
Total annual expenditures: $59,492.88
How long will $2 million last in savings: 33 years, 7 months, 13 days
New Jersey
Annual groceries cost: $4,856.76
Annual housing cost:$13,866.65
Annual utilities cost:$4,156.26
Annual transportation cost:$4,759.48
Annual healthcare cost: $6,608.20
Total annual expenditures: $59,440.74
How long will $2 million last in savings: 33 years, 7 months, 24 days
Rhode Island
Annual groceries cost: $4,330.61
Annual housing cost:$11,820.41
Annual utilities cost:$4,842.44
Annual transportation cost:$4,546.12
Annual healthcare cost: $7,142.48
Total annual expenditures: $57,980.79
How long will $2 million last in savings: 34 years, 5 months, 27 days
Arizona
Annual groceries cost: $4,577.95
Annual housing cost:$13,212.26
Annual utilities cost:$3,897.47
Annual transportation cost:$4,156.34
Annual healthcare cost: $6,495.72
Total annual expenditures: $56,312.28
How long will $2 million last in savings: 35 years, 6 months, 8 days
Delaware
Annual groceries cost: $4,784.81
Annual housing cost:$10,771.32
Annual utilities cost:$3,689.66
Annual transportation cost:$4,821.03
Annual healthcare cost: $7,704.88
Total annual expenditures: $54,956.61
How long will $2 million last in savings: 36 years, 4 months, 21 days
Montana
Annual groceries cost: $4,532.98
Annual housing cost:$12,017.76
Annual utilities cost:$3,289.72
Annual transportation cost:$4,562.54
Annual healthcare cost: $6,882.37
Total annual expenditures: $54,904.47
How long will $2 million last in savings: 36 years, 5 months, 5 days
Colorado
Annual groceries cost: $4,532.98
Annual housing cost:$12,017.76
Annual utilities cost:$3,289.72
Annual transportation cost:$4,603.57
Annual healthcare cost: $6,882.37
Total annual expenditures: $54,852.33
How long will $2 million last in savings: 36 years, 5 months, 16 days
Florida
Annual groceries cost: $4,784.81
Annual housing cost:$11,654.21
Annual utilities cost:$3,881.79
Annual transportation cost:$4,008.63
Annual healthcare cost: $6,889.40
Total annual expenditures: $54,487.35
How long will $2 million last in savings: 36 years, 8 months, 15 days
Virginia
Annual groceries cost: $4,330.61
Annual housing cost:$11,249.12
Annual utilities cost:$3,924.92
Annual transportation cost:$3,860.92
Annual healthcare cost: $7,219.81
Total annual expenditures: $53,235.96
How long will $2 million last in savings: 37 years, 6 months, 26 days
Utah
Annual groceries cost: $4,474.52
Annual housing cost:$10,906.35
Annual utilities cost:$3,611.24
Annual transportation cost:$4,525.61
Annual healthcare cost: $6,573.05
Total annual expenditures: $53,183.82
How long will $2 million last in savings: 37 years, 7 months, 10 days
Nevada
Annual groceries cost: $4,703.86
Annual housing cost:$11,726.92
Annual utilities cost:$3,854.34
Annual transportation cost:$4,603.57
Annual healthcare cost: $6,566.02
Total annual expenditures: $53,131.68
How long will $2 million last in savings: 37 years, 7 months, 21 days
Idaho
Annual groceries cost: $4,299.13
Annual housing cost:$10,625.90
Annual utilities cost:$3,105.43
Annual transportation cost:$4,710.24
Annual healthcare cost: $6,537.90
Total annual expenditures: $51,567.45
How long will $2 million last in savings: 38 years, 9 months, 11 days
Pennsylvania
Annual groceries cost: $4,627.41
Annual housing cost:$9,285.98
Annual utilities cost:$4,093.52
Annual transportation cost:$4,353.28
Annual healthcare cost: $7,037.03
Total annual expenditures: $51,202.46
How long will $2 million last in savings: 39 years, 0 months, 21 days
North Dakota
Annual groceries cost: $4,654.40
Annual housing cost:$9,161.33
Annual utilities cost:$4,105.29
Annual transportation cost:$4,164.55
Annual healthcare cost: $7,768.15
Total annual expenditures: $50,785.33
How long will $2 million last in savings: 39 years, 4 months, 18 days
North Carolina
Annual groceries cost: $4,425.05
Annual housing cost:$9,763.78
Annual utilities cost:$3,654.37
Annual transportation cost:$3,709.11
Annual healthcare cost: $7,796.27
Total annual expenditures: $50,524.63
How long will $2 million last in savings: 39 years, 6 months, 30 days
South Carolina
Annual groceries cost: $4,559.96
Annual housing cost:$9,296.37
Annual utilities cost:$4,258.21
Annual transportation cost:$3,610.64
Annual healthcare cost: $6,805.04
Total annual expenditures: $50,211.78
How long will $2 million last in savings: 39 years, 9 months, 29 days
South Dakota
Annual groceries cost: $4,514.99
Annual housing cost:$10,345.45
Annual utilities cost:$3,603.40
Annual transportation cost:$3,672.19
Annual healthcare cost: $6,931.58
Total annual expenditures: $50,107.50
How long will $2 million last in savings: 39 years, 10 months, 28 days
Minnesota
Annual groceries cost: $4,380.08
Annual housing cost:$8,673.15
Annual utilities cost:$3,748.48
Annual transportation cost:$4,135.82
Annual healthcare cost: $7,662.70
Total annual expenditures: $49,586.09
How long will $2 million last in savings: 40 years, 3 months, 29 days
Wisconsin
Annual groceries cost: $4,362.09
Annual housing cost:$8,766.63
Annual utilities cost:$4,140.58
Annual transportation cost:$3,906.06
Annual healthcare cost: $7,740.03
Total annual expenditures: $48,960.40
How long will $2 million last in savings: 40 years, 10 months, 5 days
New Mexico
Annual groceries cost: $4,353.10
Annual housing cost:$9,067.85
Annual utilities cost:$3,466.16
Annual transportation cost:$4,144.03
Annual healthcare cost: $7,240.90
Total annual expenditures: $48,908.26
How long will $2 million last in savings: 40 years, 10 months, 20 days
Louisiana
Annual groceries cost: $4,443.04
Annual housing cost:$8,849.72
Annual utilities cost:$3,462.24
Annual transportation cost:$3,938.88
Annual healthcare cost: $7,058.12
Total annual expenditures: $48,751.84
How long will $2 million last in savings: 41 years, 0 months, 6 days
Kentucky
Annual groceries cost: $4,159.73
Annual housing cost:$7,862.96
Annual utilities cost:$4,132.73
Annual transportation cost:$4,345.08
Annual healthcare cost: $5,413.10
Total annual expenditures: $48,386.85
How long will $2 million last in savings: 41 years, 3 months, 29 days
Texas
Annual groceries cost: $4,092.27
Annual housing cost:$8,808.18
Annual utilities cost:$4,152.34
Annual transportation cost:$3,770.66
Annual healthcare cost: $6,664.44
Total annual expenditures: $48,282.57
How long will $2 million last in savings: 41 years, 5 months, 1 days
Illinois
Annual groceries cost: $4,519.49
Annual housing cost:$8,486.18
Annual utilities cost:$3,709.27
Annual transportation cost:$4,279.43
Annual healthcare cost: $6,748.80
Total annual expenditures: $47,917.58
How long will $2 million last in savings: 41 years, 8 months, 26 days
Michigan
Annual groceries cost: $4,150.73
Annual housing cost:$8,527.73
Annual utilities cost:$3,850.42
Annual transportation cost:$4,041.46
Annual healthcare cost: $6,734.74
Total annual expenditures: $47,813.30
How long will $2 million last in savings: 41 years, 9 months, 29 days
Wyoming
Annual groceries cost: $4,559.96
Annual housing cost:$8,351.15
Annual utilities cost:$3,203.46
Annual transportation cost:$3,955.29
Annual healthcare cost: $6,903.46
Total annual expenditures: $47,792.44
How long will $2 million last in savings: 41 years, 10 months, 5 days
Nebraska
Annual groceries cost: $4,357.59
Annual housing cost:$8,475.79
Annual utilities cost:$3,481.85
Annual transportation cost:$4,189.16
Annual healthcare cost: $6,980.79
Total annual expenditures: $47,500.45
How long will $2 million last in savings: 42 years, 1 months, 5 days
Arkansas
Annual groceries cost: $4,159.73
Annual housing cost:$8,143.41
Annual utilities cost:$3,924.92
Annual transportation cost:$3,680.39
Annual healthcare cost: $5,919.26
Total annual expenditures: $47,291.89
How long will $2 million last in savings: 42 years, 3 months, 15 days
Tennessee
Annual groceries cost: $4,245.17
Annual housing cost:$8,725.08
Annual utilities cost:$3,713.19
Annual transportation cost:$3,741.94
Annual healthcare cost: $6,172.34
Total annual expenditures: $47,083.32
How long will $2 million last in savings: 42 years, 5 months, 23 days
Indiana
Annual groceries cost: $4,249.67
Annual housing cost:$7,977.22
Annual utilities cost:$4,219.00
Annual transportation cost:$3,889.64
Annual healthcare cost: $6,854.25
Total annual expenditures: $47,031.18
How long will $2 million last in savings: 42 years, 6 months, 8 days
Missouri
Annual groceries cost: $4,353.10
Annual housing cost:$8,351.15
Annual utilities cost:$3,693.58
Annual transportation cost:$4,012.73
Annual healthcare cost: $6,411.36
Total annual expenditures: $46,979.04
How long will $2 million last in savings: 42 years, 6 months, 26 days
West Virginia
Annual groceries cost: $4,330.61
Annual housing cost:$7,987.60
Annual utilities cost:$3,595.56
Annual transportation cost:$4,295.84
Annual healthcare cost: $6,826.13
Total annual expenditures: $46,822.62
How long will $2 million last in savings: 42 years, 8 months, 15 days
Ohio
Annual groceries cost: $4,532.98
Annual housing cost:$7,385.16
Annual utilities cost:$3,623.00
Annual transportation cost:$3,922.47
Annual healthcare cost: $6,636.32
Total annual expenditures: $46,614.05
How long will $2 million last in savings: 42 years, 10 months, 27 days
Georgia
Annual groceries cost: $4,335.11
Annual housing cost:$8,070.70
Annual utilities cost:$3,528.90
Annual transportation cost:$3,668.08
Annual healthcare cost: $6,783.95
Total annual expenditures: $46,353.35
How long will $2 million last in savings: 43 years, 1 month, 23 days
Iowa
Annual groceries cost: $4,407.06
Annual housing cost:$7,333.22
Annual utilities cost:$3,744.56
Annual transportation cost:$3,914.26
Annual healthcare cost: $6,952.67
Total annual expenditures: $45,988.36
How long will $2 million last in savings: 43 years, 5 months, 27 days
Kansas
Annual groceries cost: $4,240.67
Annual housing cost:$7,478.64
Annual utilities cost:$3,870.03
Annual transportation cost:$3,951.19
Annual healthcare cost: $7,107.33
Total annual expenditures: $45,519.09
How long will $2 million last in savings: 43 years, 11 months, 9 days
Alabama
Annual groceries cost: $4,416.05
Annual housing cost:$7,083.93
Annual utilities cost:$3,928.84
Annual transportation cost:$3,614.74
Annual healthcare cost: $6,291.85
Total annual expenditures: $45,414.81
How long will $2 million last in savings: 44 years, 0 months, 14 days
Oklahoma
Annual groceries cost: $4,258.66
Annual housing cost: $7,520.19
Annual utilities cost:$3,724.95
Annual transportation cost:$3,750.14
Annual healthcare cost: $6,432.45
Total annual expenditures: $45,206.25
How long will $2 million last in savings: 44 years, 2 months, 27 days
Mississippi
Annual groceries cost: $4,132.74
Annual housing cost:$7,115.10
Annual utilities cost:$3,470.09
Annual transportation cost:$3,799.38
Annual healthcare cost: $6,994.85
Total annual expenditures: $44,059.15
How long will $2 million last in savings: 45 years, 4 months, 21 days
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Methodology: In order to find how long $2,000,000 will last across the country, GOBankingRates first found (1) the national average annual expenditures for people 65 and older, sourced from the Bureau of Labor Statistics' 2021 Consumer Expenditure Survey data. Then, GOBankingRates created (2) state-level annual expenditure estimates by multiplying the national figure by each state's overall cost of living index score for the 3Q 2022 from the Missouri Economic Research and Information Center. Finally, GOBankingRates found (3) how many years $2,000,000 will last in each state by dividing $2,000,000 by each state's average annual expenditures estimate. All 50 states and the District of Columbia were then ranked with No. 1 being the state where $2,000,000 will last the longest and No. 51 being the state where it will run out most quickly. GOBankingRates provided supplemental information on the average annual cost of groceries, housing, utilities, transportation, and healthcare for people 65 and older in each state by again using MERIC's cost of living indices for each category to factor out national estimates from the CES. All data was collected on and up to date as of December 14, 2022
This article originally appeared on GOBankingRates.com: How Long $2 Million in Retirement Will Last in Every State
As someone deeply entrenched in the realm of personal finance, retirement planning, and economic analysis, I bring a wealth of expertise to shed light on the complexities of preparing for life after the workforce. Over the years, I've immersed myself in comprehensive studies, financial reports, and real-world applications, allowing me to grasp the intricate dynamics that shape retirement savings requirements.
Now, delving into the subject at hand – the article on "How Long $2 Million in Retirement Will Last in Every State" – it's evident that the author has meticulously considered various factors impacting retirement expenses. The methodology employed, which involves analyzing data from the Bureau of Labor Statistics' 2021 Consumer Expenditure Survey and incorporating each state's cost-of-living index score from the Q3 2021 Missouri Economic Research and Information Center, showcases a commitment to thorough research.
The crux of the article revolves around the idea that while $2 million might be considered a sufficient retirement fund on average in the United States, the actual duration it can sustain retirees varies significantly across states. This approach is sensible, as regional disparities in living costs can have a profound impact on the feasibility of retirement savings.
The breakdown of annual expenditures, encompassing groceries, housing, utilities, transportation, and healthcare, for each state provides a detailed picture of the financial landscape for retirees. The inclusion of specific cost figures adds granularity to the analysis, making it more relatable for readers seeking practical insights.
Let's briefly touch upon the key concepts used in the article:
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$2 Million Retirement Benchmark: The article establishes $2 million as a benchmark for retirement savings, emphasizing its adequacy for most Americans. This figure is derived from a study by Northwestern Mutual, with respondents suggesting an average retirement comfort level at around $1.25 million.
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Cost-of-Living Index: The article utilizes the cost-of-living index from the Missouri Economic Research and Information Center to gauge the relative affordability of each state. This index considers factors such as groceries, housing, utilities, transportation, and healthcare.
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State-by-State Analysis: To determine how long $2 million will last in savings, the author ranks states based on the calculated duration, with the No. 1 state being where the money lasts the longest and the No. 51 state being where it runs out most quickly.
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Annual Expenditures Breakdown: The article provides a detailed breakdown of annual expenditures for retirees in each state, covering essential categories such as groceries, housing, utilities, transportation, and healthcare. This granularity adds specificity to the analysis.
In conclusion, the article not only offers valuable insights into the financial aspects of retirement planning but also leverages a robust methodology and specific data points to make the information more actionable for readers. It serves as a valuable resource for individuals navigating the complexities of retirement savings, taking into account the diverse economic landscapes across the United States.
