How Far a $500K Nest Egg Will Last in My State (And Yours)

This is why the cost of living expenses matters.

How much you need to save for retirement depends on where you live. To find out how long $500,000 will last in retirement in every state, GOBankingRates analyzed the average spending data for people ages 65 and older as well as the cost of living in each state.

I live in Texas (No. 11 ranking), where $500,000 saved will buy me 11 years of retirement. I jump-started my retirement savings starting at age 22. So, if I can average a 7 percent return and maintain my savings rate through the remainder of my 30-year career horizon, I will only need to maintain contributions of about $147 a month to hit this financial milestone. However, you might need to save more if you live in a pricier area. Learn exactly how much you need to survive retirement in your state.

10 States Where $500,000 Lasts the Longest in Retirement

According to GOBankingRates’ analysis, $500,000 will fund more than 12 years of your retirement in only one state: Mississippi. For all the states in the top 10, however, those savings will last more than 11 years. If you live in any of these places, you could be living in a retirement planner’s financial paradise. In fact, many of the cheapest places to retire are in the South.

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Here’s how the rest of the top 10 best states for retiring on half a million round out:

Rank State Annual Expenditures Years Savings Will Last
1 Mississippi $40,878 12.23
2 Arkansas $42,175 11.86
3 Oklahoma $42,847 11.67
4 Michigan $43,087 11.60
5 Tennessee $43,135 11.59
6 Missouri $43,183 11.58
7 Kansas $43,328 11.54
8 Alabama $43,376 11.53
9 Georgia $43,616 11.46
10 Indiana $43,760 11.43

Find Out Why: This State Is Home to the Worst Cities for Retirement

10 States Where $500,000 Lasts the Shortest in Retirement

Unfortunately, not all U.S. roads are paved in retirement gold. Take Hawaii, for example. A $500,000 nest egg will only buy you five years of post-work bliss, thanks to an extra-high cost of living. Hawaiians might argue that five years on an island paradise is better than zero years, but you could be less convinced. In the following states, the high cost of living will drain your retirement savings the quickest:

Rank State Annual Expenditures Years Savings Will Last
1 Hawaii $90,450 5.53
2 California $67,729 7.38
3 Massachusetts $63,839 7.83
4 New York $63,646 7.86
5 Alaska $63,070 7.93
6 Oregon $62,109 8.05
7 Maryland $61,821 8.09
8 Connecticut $60,380 8.28
9 Rhode Island $59,371 8.42
10 New Jersey $58,555 8.54

Regardless of where you live, it’s important to know how much you need to save each month to reach your own retirement milestone. If you start at age 20, assuming an average return of 7 percent and a retirement age of 67, you only need to save $127 a month. Due to the losses in savings and compound interest, if you wait until age 35 your monthly savings rate jumps to $379 a month. With an end goal of $500,000, here’s how much you need to save each month depending on the age you start:

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  • Age 25: $181/mo.
  • Age 30: $260/mo.
  • Age 35: $379/mo.
  • Age 40: $560/mo.
  • Age 45: $851/mo.

Remember that you can offset higher costs of living by choosing to retire later, reducing annual expenses or relocating to a lower cost-of-living state in the twilight of your career.

Click through to find out how long $1 million in retirement will last in every state.

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Methodology: To find out how long $500,000 will last across the country, GOBankingRates analyzed the average spending data for people 65 and older as well as the cost of living in all 50 U.S. states. GOBankingRates found the mean annual expenditure for every state by observing the cost of living, annual groceries, annual housing, annual utilities, annual transportation and annual healthcare. Once this data was gathered, GOBankingRates took each category’s index score divided by 100 and multiplied that by the mean national expenditure for people 65 and older in order to find the annual cost for each given category. Sources used in this study include the Bureau of Labor Statistics and the Missouri Economic Research and Information Center.

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About the Author

Marcus Garrett

Marcus Garrett and co-host Rich Jones are the masterminds behind the funformative podcast for millennials “Paychecks & Balances.” Together they leverage their experiences to provide entertaining insights and helpful tips on money management, professional growth, and other topics relevant to 20- and 30-somethings trying to get ahead.

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How Far a $500K Nest Egg Will Last in My State (And Yours)
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