Differences in retirement: How $750K and Social Security perform across the U.S. regions

When planning for retirement, one of the most important considerations is how long savings and Social Security will last. A recent study by GOBankingRates shed light on this issue, exploring the varying lifespans of $750,000 combined with Social Security payments across the U.S. This information can guide retirees in deciding where to live based on affordability, taking into account the cost of living, housing markets, healthcare, and regional economic factors.

Factors affecting retirement sustainability

The research considered several variables that influence retirement affordability. These included the cost of living indexes, housing market prices, healthcare expenses, and average Social Security benefits. These elements all play significant roles in determining how far a set amount of savings can take you in retirement. The amount of time $750,000 lasts in each region varies dramatically, making it crucial for retirees to consider these factors when deciding on a retirement destination.

Factors such as inflation rates, healthcare access, and regional taxes also affect the retirement equation. In some regions, housing prices are much higher, forcing retirees to spend a large portion of their savings on homes, while in other areas, affordable housing options allow retirees to stretch their dollars further. Additionally, healthcare costs can differ significantly from state to state, making certain regions more attractive than others for those relying on fixed income in retirement.

The longevity of $750K in the Northeast

The Northeast is one of the most expensive regions in the country when it comes to retirement. States like New York and Massachusetts are particularly challenging for retirees looking to make their savings last. In New York, $750,000 will only cover approximately 15.38 years, while in Massachusetts, it’s even less—just 12.29 years. With the cost of living continuing to rise in these states, retirees will need substantial savings to afford a comfortable lifestyle.

However, not all states in the Northeast are equally expensive. Pennsylvania stands out as an exception. With the combination of Social Security payments, $750,000 can last retirees an average of 22.82 years. This makes Pennsylvania one of the more affordable options in the region, allowing retirees to enjoy a relatively long retirement period.

The primary contributors to the Northeast’s high cost of living are steep housing prices and high healthcare expenses. States like New York and Connecticut have high property values, meaning retirees can expect to spend a significant portion of their savings just on owning a home. Furthermore, healthcare costs in the Northeast are among the highest in the country, putting additional strain on retirement funds.

For retirees considering this region, it’s important to have a robust financial plan, possibly incorporating additional retirement savings or income sources to offset the higher living expenses.

How far $750K will stretch in the South

The South, known for its larger range of affordability, offers a more varied picture. There are places in the South where $750,000 can stretch far longer. On average, retirees can expect their $750,000 to last 23.43 years in this region, but the time varies greatly from state to state. Maryland, for instance, is more costly, while West Virginia is the most affordable state in the country for retirement, and it significantly outpaces other Southern states in terms of longevity.

Healthcare and housing costs in the South

The South’s appeal for retirees can largely be attributed to its relatively affordable housing markets and lower healthcare costs compared to regions like the Northeast. States like Alabama and Texas offer more affordable options for retirees. With lower healthcare costs and relatively lower property values, retirees can comfortably maintain their standard of living in these states for an extended period. However, it’s important to be aware of the varying costs within the region, as some states can still be expensive.

Midwestern states: The best value for retirement

The Midwest stands out as the region where $750,000 lasts the longest, averaging 24.27 years. In fact, retirees in this region can expect to get the most mileage out of their retirement savings. States like Illinois and Michigan offer relatively decent retirement options, with $750,000 lasting around 23 years. Even in the more expensive areas like Wisconsin, the $750,000 can last for 22.28 years—still significantly longer than in the Northeast or West.

Missouri is the most cost-effective state in the Midwest, where $750,000 can last a full 26.08 years. The affordability in the Midwest is mainly due to lower housing prices, with many cities offering affordable homes that don’t consume a disproportionate share of retirement savings.

In addition to its affordable housing market, the Midwest offers retirees a generally lower cost of living in terms of daily expenses. Groceries, utilities, and transportation tend to be cheaper than in other regions of the U.S. The relatively low taxes in many Midwest states further contribute to the region’s overall affordability. For those looking to retire comfortably without spending all their savings, the Midwest provides the best value.

The Western states: Mixed opportunities for retirees

The Western U.S. presents a mixed scenario when it comes to how far $750,000 will last. While states like California and Hawaii are known for their exorbitant housing prices and overall high cost of living, other states like New Mexico provide much more affordable options. On average, retirees in the West can expect their savings to last 18.76 years, but the experience varies drastically depending on the state.

California, for example, $750,000 lasts only 12.21 years. Hawaii is even more expensive, with the same amount only lasting 8.8 years. On the other hand, New Mexico offers a much more affordable alternative, with $750,000 lasting an average of 23.66 years.

The high cost of housing in many Western states like California and Hawaii is the primary factor driving up the cost of living. For retirees, purchasing a home in these areas requires a substantial portion of their retirement funds, leaving less for other expenses. However, other states in the West, such as Nevada and Utah, offer a more balanced cost of living, with housing prices not quite as high.

The challenge for retirees in the West is that the region includes both highly expensive states and more affordable ones, making it essential for retirees to carefully select locations within the region.

What to consider for your retirement destination

While $750,000 with Social Security can last longer in some regions of the U.S. than others, the key to a successful retirement lies in the planning. As shown by the study from GOBankingRates, the affordability of retirement can vary widely depending on the region and even the state within that region.

The Northeast is the most expensive, with retirees needing to adjust expectations or supplement savings to make their funds last. In contrast, the South and Midwest offer retirees the best value, with West Virginia and Missouri emerging as top options for the longest-lasting retirement funds.

Retirees should weigh the cost of housing, healthcare, and daily living expenses before choosing where to retire. By understanding the regional differences, you can maximize your retirement savings and enjoy a secure and comfortable life in your golden years.