How long $1.5 million in retirement savings lasts in every U.S. state

[rcjordan]

"how long A retiree could coast on Social Security benefits as well as $1.5 million in retirement savings"

so cut it by, say. 40% for a couple?

https://www.gobankingrates.com/retirement/planning/how-far-1-5-million-plus-social-security-goes-in-every-state/

[littleman]

Interesting numbers.  I feel like lifestyle is much more of a factor than location when it comes to the annual cost of living. I'd like to see how the figured the annual cost of living.

That said, I have some relative looking at upscale retirement communities and they are incredibly expensive.  Retirements wound not go very far living in places like those.  I have been hearing $12k/month per person at the base level and it goes up rapidly with needed care. Someone with care needs could easily spend $20k/month.  It seems nuts that people would spend their whole life scrimping for a nest-egg just to have it evaporate at multiples of the average pay of a person a year.

Then, there is the near end of life care that could suck up someone's wealth incredibly quickly. I believe Arron said some years back that such medical care is a wealth extraction game.

[rcjordan]

> care that could suck up someone's wealth incredibly quickly.

I started to add "Don't forget to subtract an additional $250-500K per person for late-life medical expenses."  Really, US retirement planning should throw in a substantial amount --even if you have insurance.

>medical care is a wealth extraction game.

It is wildly expensive, yes.  Also, people don't tend to consider what they can afford when battling an illness. Then they are shocked when they get the bill.

There is no doubt that it being used for money extraction when investors buy out an emergency room practice and jack up the prices (as posted here somewhere).

> lifestyle is much more of a factor than location when it comes to the annual cost of living

Some people blow a lot of money on lifestyle and can definitely skew their numbers deep into the red.  I got lucky and happened to be born in a very LCOL area (which has developed good, sought-after amenities and that'll raise the COL). Reading the article, I thought the estimate for my state was pretty close. It'd be very tight for those retiring in the urban-sprawl state capital area, though.

[ergophobe]

> I feel like lifestyle is much more of a factor than location when it comes to the annual cost of living.

Our fire insurance is quite high and that's a fixed cost we can't control without just deciding not to insure. That's a function of where we live.

On the other hand, I'm always surprised when I visit friends in towns and cities to see how often they eat out or order in or get a coffee to go or similar things that are simply not available to us. I notice that money seems to just flow through my hands in cities. The opportunities to insert your credit card in a reader are simply endless.

My general feeling is that it's harder for most people to stay on budget in a town or city than in the country, but for people who are naturally frugal, a city eliminates a lot of expenses (vehicles, notably).


>  upscale retirement communities

Isn't that the whole American economy? Dollar General might be closing stores, but luxury offerings abound and are increasing. At the highest end is the boom in "private office" wealth management.

It's really hard to sell a "basic" option in the US. The wealthy don't want it and the poor and middle class can't afford it.

Missing in your calculation of $12K/mo (which is double, BTW, what we were finding in MN or VT), is that deposits of $250,000 or $300,000 are common. So not only do you need to be able to pay that rent, you need to be able to do it *after* tying up a sizeable chunk of money. So someone with $300,000 in retirement savings can't go to one of those places even if the rent is $2000/mo.

> born in a very LCOL area

So was I, but I was poking around Zillow lately and saw that the 994sf house my father bought for our family of six 1957 for $13K is now estimated to be worth $400K. If it had kept pace with inflation, it would be $146K. Assuming a 10% down payment, I think many couples can part with $15K to get a house, but $40K is a heavy lift for most Americans, especially a young couple with kids. We're not talking Silicon Valley. This is Vermont where wages are not exceptional.

The "middle class" life has become very expensive at every stage and a lot of that is because for decades we simply haven't built non-upscale housing for either young families or old people.

[rcjordan]

TLDR;

"Wealthy Americans drive economic growth as the top 10% of earners now account for nearly half of all consumer spending. The surge is bolstered by stock market and real estate gains. A Moody's Analytics report shows their spending rose 12% from 2023 to 2024, while middle- and working-class households cut back. This divergence has made the U.S. economy increasingly dependent on affluent consumers, whose confidence could shift with market fluctuations. Luxury travel and goods sales have surged while retailers catering to lower-income shoppers struggle. Analysts warn that a stock market selloff or declining home values could have widespread economic effects."


Wealthy Americans Drive U.S. Economy as Top 10% Account for Nearly Half of Consumer Spending

https://www.msn.com/en-us/money/personalfinance/wealthy-americans-drive-u-s-economy-as-top-10-account-for-nearly-half-of-consumer-spending/vi-AA1AaNsF

[ergophobe]

I hadn't seen that specific article, but yes, that's what I'm talking about.

> stock market selloff

In the last Bank of America survey of fund managers, considered a pretty good barometer, in the month of March, they reported a 40% drop in inflows to US equities, the largest drop ever, and a 27% increase in inflows to European equities. That's the largest shift from the US to EUR since 1999.

I don't know how well that type of pattern correlates with what happened the year after 1999, so I don't know how much it tells you, but 25 years on, a lot of people who could afford to ride out the 2000 crash (or had no real savings yet anyway, like me) are now in or close to retirement and can't have quite that much patience.

The dependency on the top 10% doing half of the spending is an inherently fragile system. Thus far, it has benefited retirees, who are over-represented in the top 10% by wealth, but that could change quickly if all their wealth is in S&P index funds.