Magic number – 1.5M for Retirement… Read More
When planning for retirement, many financial advisors suggest a target of $1.5 million as the golden standard to ensure a comfortable lifestyle. But how long will this amount last once you stop working? This is a crucial question that needs careful consideration.
Calculating Your Retirement Timeline
The lifespan of your savings largely depends on your spending habits and lifestyle during retirement. On average, retirees spend about 70-80% of their pre-retirement income. If you assume an annual withdrawal rate of 4%, your $1.5 million could potentially last around 30 years. That means withdrawing approximately $60,000 per year, adjusted for inflation.
Factors that Impact Longevity of Savings
Several factors influence how long your $1.5 million will last. These include your healthcare costs, unexpected expenses, investment performance, and the age at which you retire. Additionally, choosing to downsize, relocate, or reduce your spending can significantly extend the life of your savings. It’s vital to have a withdrawal strategy in place to manage these variables effectively.
Ultimately, while $1.5 million is a solid starting point, it’s important to adapt your plans to your unique situation. Regularly reviewing your portfolio and expenses will help ensure that your retirement funds last as long as you need them.
According to an article on cbnc.com, below table shows how long $1.5M lasts in every state.
| State | Annual cost after social security | Lasts how many years ? |
| Alabama | $30,207 | 50 |
| Alaska | $50,997 | 29 |
| Arizona | $44,628 | 34 |
| Arkansas | $30,327 | 49 |
| California | $63,795 | 24 |
| Colorado | $38,559 | 39 |
| Connecticut | $43,967 | 34 |
| Delaware | $37,057 | 40 |
| Florida | $38,379 | 39 |
| Georgia | $31,829 | 47 |
| Hawaii | $87,770 | 17 |
| Idaho | $38,138 | 39 |
| Illinois | $34,233 | 44 |
| Indiana | $31,709 | 47 |
| Iowa | $31,168 | 48 |
| Kansas | $28,945 | 52 |
| Kentucky | $32,670 | 46 |
| Louisiana | $33,031 | 45 |
| Maine | $45,048 | 33 |
| Maryland | $36,276 | 41 |
| Massachusetts | $65,117 | 23 |
| Michigan | $32,310 | 46 |
| Minnesota | $34,113 | 44 |
| Mississippi | $29,426 | 51 |
| Missouri | $30,327 | 49 |
| Montana | $33,331 | 45 |
| Nebraska | $32,610 | 46 |
| Nevada | $36,997 | 41 |
| New Hampshire | $43,847 | 34 |
| New Jersey | $45,829 | 33 |
| New Mexico | $32,670 | 46 |
| New York | $50,997 | 29 |
| North Carolina | $35,495 | 42 |
| North Dakota | $32,190 | 47 |
| Ohio | $33,872 | 44 |
| Oklahoma | $29,666 | 51 |
| Oregon | $42,945 | 35 |
| Pennsylvania | $33,872 | 44 |
| Rhode Island | $44,387 | 34 |
| South Carolina | $34,052 | 44 |
| South Dakota | $32,310 | 46 |
| Tennessee | $30,928 | 49 |
| Texas | $32,490 | 46 |
| Utah | $42,645 | 35 |
| Vermont | $45,409 | 33 |
| Virginia | $37,237 | 40 |
| Washington | $45,108 | 33 |
| West Virginia | $27,803 | 54 |
| Wisconsin | $36,516 | 41 |
| Wyoming | $34,173 | 44 |
Courtesy of cnbc.com
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