Other Retirement Facts:
As nice as a million bucks in retirement sounds, is that really what you need? Depending on where you live, what you need may change significantly. Cost of living, your retirement age, Social Security benefit, and your lifestyle all play a factor. On today’s podcast, we review a study from Yahoo Finance to see how long $1 million would last you in retirement.
Is big city life the place to be? In somewhere like San Francisco, a million dollars might last only about 10 years. If that’s your goal, you’ll have to save quite a bit more to make it there. Los Angeles, Seattle, Boston, D.C. and San Diego all average about the same in this study, which would give you 15-20 years to last in retirement with a million dollars. If you retire around 65, consider life expectancy.
Want to retire in the same place you like to vacation? Portland, Denver, and Miami have about the same yearly expenses, surprisingly. You could get about 20-22 years in retirement on a million bucks. You might have to change your lifestyle a little bit to make it work, but it is getting closer to doable.
If you plan to stay in the Midwest, let’s look at Minneapolis and Chicago. Annual expenses there would give you 25-30 years of retirement on a million dollars. Places like Louisville, Kansas City, and Omaha give you a bit more bang for your buck. But remember that these average expenses might not be the same as your average expenses. Studies are based on the average, but where do you fit in with your numbers?
You’re probably not going to live to 100, but there’s always the chance that you could. How many years should you plan for? It’s helpful to have an extra cushion for those last few years. Before you retire, look at the reality of the last few years to understand what your actual income was and how much spendable money you had.
Listen to the entire episode or use the timestamps below to hear more about what it costs in a particular place to retire.
0:58 – How long a million bucks last?
2:52 – San Francisco and parts of California are costly places to retire.
4:13 – What about big cities like LA, Seattle, Boston, DC, and San Diego?
5:20 – Do you like Portland, Denver, or Miami?
7:00 – Looking to stay closer to home, like in Minneapolis?
8:25 – Louisville, Kansas City, and Omaha give you more bang for your buck.
11:22 – How long should you plan for?
A Quotable Moment:
“What happens in that first 5-10 years in the plan, changes everything. Just a little bit off here or there changes the whole picture. It’s absolutely not a set it or forget it. You have to revisit it every single year.”