By Feby Francois
A Look at the Factors
Geographical factors can heavily influence retirement costs across the country, and where you live could make the difference between successfully retiring with $1 million. In McAllen, Texas, retirees would run out of cash in 32.26 years compared to 10.21 years for people in New York City.
A person’s health and family history can give them an educated guess about their chances of living a long life. If you live to your 80s, 90s, or beyond, $1 million may not be enough.
When one chooses an expensive lifestyle in retirement, one will need more cash in their nest egg. The financial planner at Walsh & Nicholson Financial Group in Wayne, Pennsylvania, says he has clients who have $10 million. Walsh says he doesn’t expect his clients to live 25 years because they spend like crazy.
An average couple retiring this year can expect to spend $300,000 on health care costs during retirement, according to the 2021 Fidelity Retiree Health Care Cost Estimate. The savings of healthy seniors usually last longer since they have lower expenses.
Having savings isn’t enough to sustain a person during retirement. Social Security income is available to all people, regardless of whether they receive a pension. Retirement account withdrawals will be reduced by those payments.
In order to answer the question of how long will $1 million last in retirement, retirees must examine their portfolio closely. Stable Retirement Planners president Rafael Rubio says market instability is a significant drain on assets. If you invest aggressively, you might lose money, while if you are too conservative, your savings may not grow fast enough to cover inflation and withdrawals.
The recent record low inflation rate has no guarantee of continuing. Consequently, retirees will have a harder time spending their savings as a result of rising inflation.
Because of all these factors, there are no universal rules of thumb for saving for retirement. Others may need significantly more than $1 million to live comfortably in retirement.