Yahoo Finance 10 Worst States To Retire on Just $500K in Savings
A retirement nest egg of $500,000 may seem like a lot to some people and not nearly enough to others. The amount of Social Security you’ll have to supplement that total, your retirement age, your health and many other factors likely influence your opinion.
Most would agree, however, that $500,000 can disappear fast once those regular paychecks stop coming — in some states more than others.
A recent GOBankingRates study identified the top 10 states in which $500,000 will vanish the quickest for retirees. There are plenty of factors besides finances to consider when selecting your retirement destination. But based on finances alone, we’ll call these 10 the worst states to retire with this level of savings.
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In one state on our list, that $500,000 would be gone in less than five years. On the opposite end of the spectrum, states where $500,000 will last retirees the longest include Oklahoma (10.03 years), Mississippi (10.02 years), Kansas (9.93 years), West Virginia (9.86 years) and Alabama (9.79 years).
Read on for the 10 worst, along with the average annual expenditures for each one and just how long that nest egg will last on average.
Oregon
Average annual expenditures: $66,317.25
Number of years $500,000 will last: 7.54
Years, months and days: 7 years 6 months 15 days
One of five states in the western U.S. on our list, Oregon has some of the most expensive groceries in our top 10 (about $5,200 a year). On the other hand, Oregon’s utility costs are about $4,000 a year — second lowest among the top 10.
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Vermont
Average annual expenditures: $66,664.15
Number of years $500,000 will last: 7.50
Years, months and days: 7 years 6 months 1 day
Vermont may not be the first place to come to mind when you think of expensive states, but its popularity as a getaway for residents of wealthier, neighboring states has driven up its cost of living. Groceries, utilities and transportation will each run a retiree more than $5,000 a year.
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Washington
Average annual expenditures: $67,068.88
Number of years $500,000 will last: 7.46
Years, months and days: 7 years 5 months 16 days
In the state of Washington, the speed at which your savings will disappear depends a lot on which part of the state you’re living in. The eastern side of the Evergreen state is relatively inexpensive, with most of Washington’s population and wealth found west of the Cascade Mountains. Washington does have the lowest annual utility costs in our top 10 — about $3,900.
Maryland
Average annual expenditures: $67,357.97
Number of years $500,000 will last: 7.42
Years, months and days: 7 years 5 months 2 days
Living in Maryland isn’t cheap, with housing expenditures for retirees coming in around $17,000 a year. On the bright side, Maryland has the lowest annual costs for transportation (about $4,860) and healthcare (about $7,340) on our list.
Alaska
Average annual expenditures: $72,388.14
Number of years $500,000 will last: 6.91
Years, months and days: 6 years 10 months 27 days
Remote Alaska has always been one of the nation’s most expensive states, with high costs for just getting goods there. “The Last Frontier” has the highest costs in our top 10 for groceries ($5,924), utilities ($6,690) and healthcare ($11,167). On housing, expenditures are relatively low ($14,323).
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New York
Average annual expenditures: $72,792.86
Number of years $500,000 will last: 6.87
Years, months and days: 6 years 10 months 13 days
Like Washington, New York’s cost of living varies greatly — depending on whether you live in the Big Apple or Upstate. On balance, average housing expenditures for retirees come in around $20,600 a year.
California
Average annual expenditures: $80,077.93
Number of years $500,000 will last: 6.24
Years, months and days: 6 years 2 months 28 days
The Golden State has some of the most expensive real estate in the nation. California also has the second-highest transportation costs for retirees on our list ($6,200)
Massachusetts
Average annual expenditures: $84,703.37
Number of years $500,000 will last: 5.90
Years, months and days: 5 years 10 months 23 days
A $500,000 nest egg in the famously expensive Bay State would be gone in less than six years, on average. Healthcare in Massachusetts will run retirees about $8,500 a year — the third-highest figure in our top 10.
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District of Columbia
Average annual expenditures: $84,876.82
Number of years $500,000 will last: 5.89
Years, months and days: 5 years 10 months 20 days
The nation’s capital is known for its high housing prices, with annual housing expenditures for retirees coming in around $28,000. Groceries will run retirees more than $5,000 a year.
Hawaii
Average annual expenditures: $104,245.85
Number of years $500,000 will last: 4.80
Years, months and days: 4 years 9 months 18 days
Say “Aloha” to the worst state for retiring with $500,000 in savings. In notoriously expensive Hawaii, you could blow through that amount in well under five years. Hawaii has the second-highest annual grocery costs in our top 10 list ($5,600) and tops our list for annual housing expenditures ($36,600) and transportation costs (nearly $6,700). Its average total expenditures for retirees each year are nearly $20,000 higher than Washington D.C.’s.
Methodology: To determine how long $500,000 will last for a retiree across the country, GOBankingRates first found the national average annual expenditures for people 65 and older (sourced from the Bureau of Labor Statistics 2022 Consumer Expenditure Survey data). GOBankingRates then created state-level annual expenditure estimates by multiplying the national figure by each state’s overall cost of living index score (sourced from the 2023 Missouri Economic Research and Information Center). Finally, GOBankingRates determined how many years $500,000 will last in each state by dividing $500,000 by each state’s average annual expenditures estimate. All 50 states and the District of Columbia were then ranked, with number one being the state where $500,000 will last the longest and number 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 May 17, 2024.
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This article originally appeared on GOBankingRates.com: 10 Worst States To Retire on Just $500K in Savings
