Yahoo Finance New Retirement Savings Target Is $1.8M: How Long Will That Last in These Major Cities?
According to the Social Security Administration, the normal retirement age is between 65 and 67 years old. If, like most people, you retire in your mid-60s, you will likely need enough money to last you at least another 15 years, if not more as many people are living well into their 90s or even longer. A recent Charles Schwab study reported on by CBS News found that people believe that they will need a whopping $1.8 million in retirement savings to live comfortably during their golden years.
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We looked at just how long $1.8 million in retirement savings would last in major cities across the country. Without a doubt, places across the Midwest allowed retirees to stretch their money the furthest. The top 10 cities where $1.8 million in retirement savings would last the longest gave retirees nearly 40 years of comfortable living, while the shortest gave retirees far fewer years.
10 Major Cities Where $1.8 Million in Retirement Savings Will Last the Longest
If you want to make sure that you will not outlast your retirement savings, you need to be moving away from the coast. Cities with the lowest cost of living tend to be found in the Midwest, where housing, groceries and utilities are most affordable. Each of these cities has annual expenditures less than the national average of $52,141. Most of them also have housing costs that are nearly half the average in the U.S., which currently sits at $10,387 per year.
Before you call it quits, consider these 10 major cities where $1.8 million in retirement savings will last you 38 years or longer.
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10. Detroit
Annual expenditures: $46,249.07
# of years, months, days that $1.8 million will last: 38 years, 11 months, 1 day
Your retirement savings will stretch for nearly four decades in The Motor City, with an annual grocery expenditure of around $4,000 per year and only $2,440 in housing costs.
9. Kansas City, Missouri
Annual expenditures: $45,831.94
# of years, months, days that $1.8 million will last: 39 years, 3 months, 8 days
If you have always loved the Midwest, then Kansas City might be calling your name. A retirement savings of $1.8 million will last 39 years due to a low cost of living and annual transportation expenditures of $3,639.36.
8. Columbus, Ohio
Annual expenditures: $45,049.82
# of years, months, days that $1.8 million will last: 39 years, 11 months, 16 days
Retiring in Columbus will help you stretch your $1.8 million retirement savings for almost 40 years due to a low annual healthcare expenditure of $6,291.85.
7. Indianapolis
Annual expenditures: $44,267.71
# of years, months, days that $1.8 million will last: 40 years, 7 months, 28 days
You can’t go wrong spending your golden years in Indianapolis. Groceries will only cost you around $4,209.19, and utilities cost $3,536.74 each year, well under the national average.
6. Milwaukee
Annual expenditures: $44,163.43
# of years, months, days that $1.8 million will last: 40 years, 9 months, 3 days
If you are willing to withstand winter temperatures well below freezing, then Milwaukee is a great place to save money during retirement. You’ll only spend around $4,177.71 on groceries each year and less than $5,800 on housing expenditures.
5. Oklahoma City
Annual expenditures: $44,007.00
# of years, months, days that $1.8 million will last: 40 years, 10 months, 23 days
With serene natural beauty and a low cost of living, Oklahoma is a top choice for retirees hoping to stretch their budgets. Annual transportation costs of $3,918.37 help to add to your savings.
4. Tulsa, Oklahoma
Annual expenditures: $42,964.18
# of years, months, days that $1.8 million will last: 41 years, 10 months, 23 days
With annual housing expenditures of under $5,360, Tulsa is a great place to settle down once you quit your 9-to-5. The vibrant city has a little bit of everything for a retiree hoping to immerse themselves in unique art and cowboy culture.
3. El Paso, Texas
Annual expenditures: $42,755.62
# of years, months, days that $1.8 million will last: 42 years, 1 month, 5 days
Located at the westernmost point of Texas, El Paso is a thriving city with centuries-old Spanish missions and can’t-be-beat cuisine. Retiring here will save you big since groceries will only cost you around $4,137.24 per year, and housing is thousands of dollars less than the national average.
2. Wichita, Kansas
Annual expenditures: $42,547.06
# of years, months, days that $1.8 million will last: 42 years, 3 months, 22 days
If you retire in Wichita, you can expect your $1.8 million in retirement savings to last you over 40 years, largely in part due to a low cost of living, including annual transportation costs of only $3,298.81.
1. Memphis, Tennessee
Annual expenditures: $40,409.28
# of years, months, days that $1.8 million will last: 44 years, 6 months, 15 days
The place to retire that will stretch your retirement savings the longest is Memphis, Tennessee. The “Home of the Blues” is extremely affordable for retirees, with annual grocery costs of under $4,200 and housing expenditures of $4,404.09 per year.
10 Major Cities Where $1.8 Million in Retirement Savings Will Last the Shortest
While $1.8 million in retirement savings may seem like plenty of money, it may not get you very far in certain parts of the country. Cities with high housing costs or exorbitant food costs will eat into your savings quickly, causing you to run out of money well before you are done enjoying your retirement.
Few people will be surprised that many of the major cities with the highest cost of living are located on the West Coast. Over half of the places where $1.8 million in retirement savings will last the shortest are located in the Golden State. Most of these places are hurt by housing costs that are nearly triple the national average.
10. Washington, D.C.
Annual expenditures: $78,524.35
# of years, months, days that $1.8 million will last: 22 years, 11 months, 1 day
You might be hard-pressed to get your retirement savings to last long enough in a city like Washington, D.C. With annual housing expenditures of $24,045.91, you’re spending well over double the national average.
9. Boston
Annual expenditures: $79,984.29
# of years, months, days that $1.8 million will last: 22 years, 6 months, 1 day
While Boston may have some of the best lobster rolls in the country, it is also an expensive place to retire. Annual grocery expenditures will run you $5,009.66, and housing costs approximately $23,755.07 each year.
8. Long Beach, California
Annual expenditures: $82,956.33
# of years, months, days that $1.8 million will last: 21 years, 8 months, 11 days
While California is a great place to visit, it may not be the most affordable to retire. Your $1.8 million will only last you around 20 years due to a high cost of living and transportation costs of $6,478.64 each year.
7. San Diego
Annual expenditures: $83,634.16
# of years, months, days that $1.8 million will last: 21 years, 6 months, 8 days
Another pricey place to settle down is in San Diego. While the weather is near perfect year-round, it can be nearly impossible to find affordable housing. Annual housing expenditures in the area are $28,917.41.
6. Seattle
Annual expenditures: $87,492.60
# of years, months, days that $1.8 million will last: 20 years, 6 months, 26 days
Retirees may struggle to stretch their dollars in Seattle due to annual grocery expenditures of $4,888.24 and an extraordinarily pricey housing market.
5. New York
Annual expenditures: $87,909.73
# of years, months, days that $1.8 million will last: 20 years, 5 months, 23 days
You may be dreaming of the Big Apple, but retiring in the city can be costly. Annual transportation costs exceed $7,400, and utilities will run you over $5,900 per year.
4. Los Angeles
Annual expenditures: $91,872.44
# of years, months, days that $1.8 million will last: 19 years, 7 months, 3 days
At three times the national average, your annual housing expenditures will make it nearly impossible to retire comfortably for more than 20 years in Los Angeles.
3. Oakland, California
Annual expenditures: $92,028.87
# of years, months, days that $1.8 million will last: 19 years, 6 months, 23 days
As with other California cities, it is the cost of housing that will dip significantly into your retirement savings. Annual housing expenditures near Oakland are approximately $32,885.24.
2. San Jose, California
Annual expenditures: $112,103.15
# of years, months, days that $1.8 million will last: 16 years, 0 months, 21 days
Almost everything is more expensive in San Jose compared to other parts of the country. Groceries alone will cost you $5,113.09 per year.
1. San Francisco
Annual expenditures: $127,224.04
# of years, months, days that $1.8 million will last: 14 years, 1 month, 23 days
Unsurprisingly, San Francisco takes the top spot for major cities where $1.8 million in retirement savings will last you the least amount of time. With the nest egg only lasting around 14 years, you’ll need to work for decades past the normal retirement age to ensure you do not outlive your savings.
Methodology: In order to find how long $1,800,000 will last in the biggest US cities, GOBankingRates first sourced the 50 biggest cities in terms of population as sourced from the 2021 American Community Survey. GOBankingRates then 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) city-level annual expenditure estimates by multiplying the national figure by each city’s overall cost of living index score sourced from Sperling’s Best Places. Finally, GOBankingRates found (3) how many years $1,800,000 will last in each city by dividing $1,800,000 by each city’s average annual expenditures estimate. All 50 cities were then ranked with No. 1 being the city where $1,800,000 will last the longest and No. 50 being the city 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 city by again using Sperling’s Best Places 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 August 30, 2023.
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This article originally appeared on GOBankingRates.com: New Retirement Savings Target Is $1.8M: How Long Will That Last in These Major Cities?
