Recent studies reveal that in Washington DC, a retirement nest egg of $1 million would likely only last for about 11 years, 10 months, and 25 days. Factors such as the cost of living, housing, and healthcare influence this calculation. Despite substantial savings, the high cost of living in Washington DC can severely limit a retiree’s financial independence.
Future retirees should, therefore, strategically plan their retirement considering these. They could either consider retiring in less expensive states or delve into more robust retirement plans to boost their savings. As costs of living surge and life expectancy expands, the need for a larger retirement fund becomes evident.
Surprisingly, in comparing all 50 states, DC ranks third to last on the longevity scale of $1 million in retirement savings. Even though DC is relatively small, it sports a significantly high cost of living. Therefore, retirees in DC may have to resort to alternative ways to afford their retirement lifestyles as savings may not stretch as far as desired.
Interestingly, a retirement fund of $1 million would last roughly 9 years seven months in Hawaii, and 11 years, eight months in Massachusetts, which is slightly better than DC.
Assessing retirement savings sustainability in Washington DC
This sheds light on the fact that $1 million in retirement savings in DC tends to outlast the same amount in these two states.
In Maryland, $1 million in retirement savings can cover just over 15 years’ worth of expenses for retirees. However, this might still pose challenges for maintaining a satisfactory lifestyle given the rising cost of living. Therefore, it’s critical to consider additional income sources, savings, and investment returns when planning retirement.
Contrarily, states such as Virginia, West Virginia, and Kentucky offer slightly better scenarios. $1 million in retirement savings would approximately last 17 years and 22 days, 18 years and 15 days, and around 21 years and 12 days respectively in these states.
West Virginia wins the race as the most economical state where retiree’s savings of $1 million could stretch for over 20 years and three months. On the other hand, Hawaii is the least affordable state, where the same amount would only last about a decade. Therefore, states like Michigan and Ohio, where a $1 million retirement fund could last around 16 and 17 years respectively, offer a balanced option.
The research was conducted by dividing $1 million by the average yearly expense in each state. Various factors such as groceries, housing, utilities, transportation, and healthcare costs were included in this analysis.