Yahoo Finance $1 Million Will Only Last 16 Years If You Retire in Colorado
Retirement expenses don’t have to be as high as the Rocky Mountains, but if you are looking to spread out your savings, even substantial funds may not last forever in the Centennial State. If you want to retire in any Colorado city or small town, you might need to rely on more than just your Social Security benefits.
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Though filled with naturally beautiful scenery and outdoor recreation, Colorado might give your bank account more of a workout than you expect, even with $1 million saved up.
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Quick Take: Retiring in Colorado With $1 Million
GOBankingRates recently conducted an original study to determine how long $1 million would last you in retirement in each state. Having $1 million banked in your retirement savings may seem like you would be financially set indefinitely, but indefinitely doesn’t last as long as it used to.
Here are some key findings for retirement in Colorado:
How long $1 million will last in savings: 16 years, 2 months, 4 days
Annual groceries cost: $4,979
Annual housing cost: $13,691
Annual utilities cost: $3,944
Annual transportation cost: $5,254
Annual healthcare cost: $7,465
Total annual expenditures: $61,807
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Colorado Retirement: 6 Reasons Why $1 Million Lasts 16 Years
If you are age 65 or older, then 16 years of retirement only puts you at about age 81, which many people live longer than. Your cost of living will fluctuate depending on where you live and your lifestyle choices, but knowing how long $1 million is estimated to last you may only be the tip of the financial iceberg. Here are six reasons why.
What You Spend on Food and Groceries
Food costs seem to be increasing even faster than inflation, so accounting for what you’ll spend on either grocery shopping or eating out each month can quickly add up. Residents of Colorado are estimated to spend about $4,979 a year on groceries alone. Nearly $5,000 is a big chunk out of a fixed income, even when clipping coupons.
Housing Cost Effectiveness
Retirement real estate throughout Colorado can be one of your biggest expenses whether it’s some of the largest cities like Denver or Colorado Springs or even smaller ski resort towns. The average annual housing costs are just under $14,000, not to mention maintenance, upgrades or increasing property taxes.
Utility Bills vs. Your Monthly Expenses
Just because you no longer get a regular paycheck from work doesn’t keep the bill collectors from metaphorically knocking on your door each month. Electricity, heating, air conditioning, water and gas are all non-negotiables when it comes to allocating your retirement funds. In order to keep the lights on and more in Colorado, it is estimated to cost you about $3,944 a year in utilities.
Gas and Transportation Costs
If you are a nature lover who wants to jet off to Pike’s Peak or just need to commute about town to run errands, chances are you’ll need a car, and gas, to do so. Easy access to all of your favorite things to do inside and outside your Colorado city can come at a cost. GOBankingRates found the average annual transportation cost for those living or retired in Colorado to be roughly $5,254.
How Affordable Healthcare Treats Your Budget
As your age increases, unfortunately so often do your healthcare needs and costs. Budgeting for medical expenses can be unpredictable, but having an emergency fund couldn’t hurt. The estimated annual healthcare cost for Colorado retirees is about $7,465.
The Increasing Cost of Living
When you retire in Colorado, your estimated total annual expenditures are around $61,807 on average. With this cost of living, it’s calculated that you’ll burn through your $1 million retirement savings in just over 16 years. However, living within or beneath your means while saving for retirement, or while living in it, can potentially help stretch that further.
Final Take To GO
The bottom line is that though $1 million is a substantial sum, it’s not an infinite fortune when it comes to retiring in Colorado. Figuring out what you’ll need financially for bills, housing, healthcare and more can help you plan or even predict what you’ll need down the line. Every penny you spend or save now goes a long way toward your retirement goals, and there’s no accounting for waste.
Methodology: In order to find how long $1,000,000 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’ 2022 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 2023 from the Missouri Economic Research and Information Center. Finally, GOBankingRates found (3) how many years $1,000,000 will last in each state by dividing $1,000,000 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 $1,000,000 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 April 23, 2024.
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This article originally appeared on GOBankingRates.com: $1 Million Will Only Last 16 Years If You Retire in Colorado
