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January 16, 2024 at 11:04 AM
It used to be that a millionaire was considered wealthy. Not anymore.
With today’s cost of living, new research from GOBankingRates shows that in some parts of the United States, a person needs at least $1 million saved up just to live comfortably in retirement for 25 years.
How is that going? In August, Charles Schwab reported that American workers believe they will need $1.8 million for retirement. If that’s the case, the average worker appears to be on track for major retirement hardship.
In its study, GOBankingRates analyzed all 50 states to uncover where a retiree will need to have saved $1 million for 25 years and for 30 years. Sixteen states fell into this group. Other states are relatively much more affordable.
Researchers found the annual cost of expenditures for a retired person in each state by multiplying the 65-year-and-older expenditures from the Bureau of Labor Statistics’ 2022 Consumer Expenditure Survey by the cost-of-living index for each state from the Missouri Economic Research and Information Center’s Q3 2023 cost-of-living series.
To find how much money a retiree would need to save, they divided the annual expenditures in each state, minus the annual Social Security income — as sourced from the Social Security Administration’s Monthly Statistical Snapshot, March 2022 — by 0.0333%, 0.04% and 0.05%, assuming 20, 25 and 30 years of retirement respectively. They collected all data, and the figures are up to date as of Jan. 8.
See the accompanying gallery for 16 states where retirees will need more than $1 million for a comfortable retirement, according to GOBankingRates.
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