The prospect of running out of savings during retirement is unnerving. One of the hardest retirement risks to manage is longevity. However, you can control your lifestyle; how lavishly or austerely you live will certainly impact how long you can financially sustain yourself.
Whether you like it or not, saving for retirement requires you to project into the future an estimate of how much you think you'll need to live so as to determine how much you'll need to save now. How much would $750,000 in retirement savings plus Social Security last you in each state? A recent GoBankingRates study crunched the numbers to find out.
The average household retirement savings for people aged 65 to74 is $609,230, according to the Federal Reserve's Survey of Consumer Finances. However, the median retirement savings for the same age group is $200,000. The difference between the two figures is stark and both are below the $750,000 figure used in the GoBankingRates study.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Here is how far $750,000 in combined savings and Social Security will go in 20 states, including the 10 that will last the longest and the 10 that will last the shortest. You' can read about the other 30 states here.
Ten states where your $750,000 plus Social Security will last the most years
The states where your retirement savings plus Social Security will last the longest might be familiar to Kiplinger readers. Mississippi and Tennessee are both tax friendly to retirees and have appeared on two desirable Kiplinger lists: 13 States That Don't Tax Retirement Income and 10 Tax-Friendly States for Retirees. Iowa is the only state on the list with an inheritance tax (which will be completely repealed on January 1, 2025).
The overall lower cost of living in these places is the reason 15 cities from the states below made up the majority of our 25 Cheapest Places to Live: U.S. Cities Edition. That list includes the capital city of the state where your retirement savings plus SS will last the longest — West Virginia.
| States (rank) | Number of Years $750,000 will last with Social Security | Annual expenditure | Annual expenditure after Social Security |
|---|---|---|---|
| West Virginia (1) | 28.80 | $48,451 | $26,038 |
| Oklahoma (2) | 27.23 | $49,955 | $27,540 |
| Kansas (3) | 26.73 | $50,475 | $28,061 |
| Alabama (4) | 26.29 | $50,938 | $28,524 |
| Mississippi (5) | 26.19 | $51,053 | $28,639 |
| Missouri (6) | 26.08 | $51,169 | $28,755 |
| Arkansas (7) | 26.08 | $51,169 | $28,755 |
| Iowa (8) | 25.27 | $52,094 | $29,680 |
| Tennessee (9) | 25.17 | $52,210 | $29,796 |
| Indiana (10) | 25.17 | $52,210 | $29,796 |
Ten states where your $750,000 plus Social Security will last the fewest years
Most states where retirement savings plus Social Security last for the shortest period of time have a reputation for high taxes and a high cost of living. The 10 states where $750,000 and Social Security last the least number of years encompass every city that made our list of the 10 Most Expensive Cities to Live in the U.S., and 14 of the 15 most expensive housing markets in America.
America's Polynesian paradise, Hawaii, is the state where your retirement savings plus Social Security will last for the fewest number of years. Hawaii's annual expenditure is more than double that of the cheapest state of West Virginia. That tracks with the cost of living in these states' capital cities. In Charleston, WV, the cost of living is 16.2% below the U.S. average and in Honolulu, HI, it is 86.2% above the U.S. average.
| States (rank) | Number of Years $750,000 will last with Social Security | Annual expenditure | Annual expenditure after Social Security |
|---|---|---|---|
| Hawaii (50) | 8.80 | $107,657 | $85,243 |
| California (49) | 12.21 | $83,836 | $61,422 |
| District of Columbia (48) | 12.26 | $83,605 | $61,191 |
| Massachusetts (47) | 12.29 | $83,431 | $61,017 |
| Alaska (46) | 15.03 | $72,330 | $44,916 |
| New York (45) | 15.38 | $71,174 | $48,760 |
| Maryland (44) | 16.75 | $67,185 | $44,771 |
| Washington (43) | 16.99 | $66,549 | $44,135 |
| Vermont (42) | 17.08 | $66,317 | $43,903 |
| Oregon (41) | 17.22 | $65,970 | $43,556 |
| New Jersey (40) | 17.31 | $65,739 | $43,325 |
Waiting to collect Social Security will increase your lifetime benefit
The age at which you start taking Social Security benefits can make a substantial difference to the size of your monthly Social Security check. If you start collecting Social Security at age 62, you will reduce your lifetime benefit by 35%. For each year you delay claiming Social Security past your full retirement age, your benefits grow by 8%. Waiting until you are 70 will push up your benefit by 24%.
Methodology: In order to find how long $750,000 will last across the country with Social Security, 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 and (2) annual Social Security income as sourced from the Social Security Administration’s May 2024 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 2024 Q1 from the Missouri Economic Research and Information Center. Finally, GOBankingRates found (3) how many years $750,000 will last in each state by dividing $750,000 by each state’s average annual expenditures estimate minus yearly Social Security income. All 50 states and the District of Columbia were then ranked with No. 1 being the state where $750,000 and Social Security 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 CEX. All data was collected on and up to date as of June 24, 2024.
Related Content
-
I'm want to give my 3 grandkids $5K each for Christmas.You're comfortably retired and want to give your grandkids a big Christmas check, but their parents are worried they might spend it all. We ask the pros for help.
-
If You're Not Doing Roth Conversions, You Need to Read ThisRoth conversions and other Roth strategies can be complex, but don't dismiss these tax planning tools outright. They could really work for you and your heirs.
-
Could Traditional Retirement Expectations Be Killing Us?A retirement psychologist makes the case: A fulfilling retirement begins with a blueprint for living, rather than simply the accumulation of a large nest egg.
-
I'm Retired and Want to Give My 3 Grandkids $5,000 Each for Christmas, But Their Parents Don't Want Them to Spend It All.
You're comfortably retired and want to give your grandkids a big Christmas check, but their parents are worried they might spend it all. We ask the pros for help.
-
I'm a Financial Planner: If You're Not Doing Roth Conversions, You Need to Read This
Roth conversions and other Roth strategies can be complex, but don't dismiss these tax planning tools outright. They could really work for you and your heirs.
-
Could Traditional Retirement Expectations Be Killing Us? A Retirement Psychologist Makes the Case
A retirement psychologist makes the case: A fulfilling retirement begins with a blueprint for living, rather than simply the accumulation of a large nest egg.
-
I'm a Financial Adviser: This Is How You Can Adapt to Social Security UncertaintyRather than letting the unknowns make you anxious, focus on building a flexible income strategy that can adapt to possible future Social Security changes.
-
The Stoic Retirement: Ancient Wisdom for Today’s Biggest Life TransitionA "Stoic retirement" doesn't mean depriving yourself. It's a character-based approach to life and aging that can bring calm and clarity.
-
My Teen Crashed His Car and Now Our Insurance Has Tripled. What Now?Dealing with the costly aftermath of a teen car accident is stressful. Here are your options for navigating it.
-
11 Outrageous Ways To Spend Money in RetirementWhether you have excess cash to spend or want to pretend, here’s a look at 11 ridiculous ways retirees can splurge.
-
My First $1 Million: Retired In-House Corporate Lawyer, 74, MidwestEver wonder how someone who's made a million dollars or more did it? Kiplinger's My First $1 Million series uncovers the answers.
