One of the more popular items on retirement surveys is the “magic number”: How much savings do you need, on top of any Social Security benefits, to live out a comfortable retirement?
Charles Schwab recently estimated the magic number to be $1.8 million, based on a poll of retirement plan participants. A Schroders survey came in at $1.2 million. Northwestern Mutual split the difference at $1.5 million.
A March analysis from the personal finance site GOBankingRates uses $1.5 million as the basis for a retirement-planning exercise. The report examines how long that money will last for a retiree in every state.
“Many Americans are coming to terms with the fact that $1 million doesn’t guarantee a comfortable retirement in parts of the U.S.,” said CJ Williamson, a GOBankingRates researcher. “The goal of this particular analysis was to take things a step further and uncover whether an even larger savings of $1.5 million would be enough to last 25 or 30 years in retirement in all 50 states.”
The report calculates the annual cost of living in each state, after deducting Social Security income, to determine how long $1.5 million in savings would last in retirement.
How long does $1.5M last in Nevada?
In Nevada, $1.5 million in retirement savings will last 41 years, based on an annual cost of living of $36,997 after factoring in Social Security.
That number may be higher in certain parts of the state. For example, according to the Massachusetts Institute of Technology’s living wage calculator, a single adult without children would need about $42,396 after taxes to sustain themselves in Reno. In Las Vegas, Nevada's other major metropolitan area, that requirement is about $1,000 more expensive at $43,262.
In more rural areas, a single adult with no children needs less to sustain themselves. In Nye County, where Tonopah and Pahrump are, it costs $37,265 to get by after taxes.
Overall, Nevada ranks as the 30th most expensive state to retire in, according to the GOBankingRates analysis.
Here's how long $1.5M lasts in other popular retirement states
According to a new report from AARP, sourced from the moving-services marketplace Hire A Helper, these are the top five destinations for Americans who moved specifically for retirement in 2024: Massachusetts, followed by Florida, Illinois, Kentucky, and North Carolina. Arizona, a celebrated retirement destination, didn’t even make the top 10.
Okay, retirees: If that’s where you’re moving, here’s how long your $1.5 million is likely to last in each place.
- Massachusetts: 23 years. With an annual cost of living of $65,117, after Social Security, Massachusetts is the second priciest state for retirees.
- Florida: 39 years. A Florida retiree faces annual costs of $38,379 after Social Security, placing it 34th among states for affordability.
- Illinois: 44 years. Illinois ranks 26th for affordability, with an annual cost of living of $34,233.
- Kentucky: 46 years. With annual costs of $32,670, Kentucky ranks 17th among states for retirement affordability.
- North Carolina: 42 years. North Carolina ranks 27th for affordability, with annual costs of $35,495.
Most of us don't have $1.5M saved for retirement
Let’s pause now for a reality check.
Most Americans retire with nowhere near $1.5 million in savings. The typical senior with a retirement account has about $200,000 saved, according to data for households in the 65-74 age range from the 2022 Survey of Consumer Finances. Only about half of those households report having retirement accounts.
Many American retirees live primarily on Social Security, and quite a few seem to be doing just fine.
The magic number concept arises from the idea that you should save as much as 10 times your annual salary for retirement to supplement your Social Security income because the federal benefit was never meant to cover the full cost of retirement.
Here’s some good news: If you do manage to save $1.5 million, according to GOBankingRates, the money will last you a very long time in most states.
What are the most affordable retirement states?
If you are looking for value, here are the five most affordable states for retirees: West Virginia, where $1.5 million will last 54 years; Kansas (52 years); Mississippi (51 years); Oklahoma (also 51 years); and Alabama (50 years).
Those numbers are good news for the average retiree. An American who retires at 65 can expect to live roughly 20 more years, give or take, based on longevity data.
Even if you retire earlier and live to 100, you will not likely need retirement savings for more than 40 years. And according to the GOBankingRates analysis, $1.5 million will last you 40 years in 32 states.
“I often see comments online claiming that $1.5 million isn’t enough to retire, but in reality, the data shows it goes a long way in nearly every state,” said Spenser Liszt, a certified financial planner in Dallas.
“The bigger issue is that many people think they need to be extremely wealthy to retire comfortably,” he said. “That belief can lead to unnecessary stress: taking on too much investment risk, overworking, or feeling like they’re always behind.”
What are the most expensive states to retire in?
A few states, however, are eye-poppingly expensive for retirees: See California and Massachusetts above. Here is how long $1.5 million will last in three other priciest states.
- Hawaii: 17 years. The annual cost of living, after Social Security, works out to $87,770.
- New York and Alaska: 29 years.Annual cost of living: About $51,000 in both states.
