Accepted estimates are by age 65, you should have saved 10 times the amount of annual income you will need. An example is if you would like $100,000 a year – you will need $1 million in savings or assets that produce income. Life expectancy in the U.S. is 78 – but advisers recommend planning to live well into your 90s.
Current estimates are that one third of 401(k) and IRA accounts have a $1 million balance. And only about half of all American families even have retirement accounts. The commonly cited 4% rule says if you have $1 million, you can withdraw 4% every year and not run out of money. With $1 million in retirement savings, that gives you $40,000 a year – before taxes – plus hopefully you will be receiving Social Security – possibly another $30,000 annually.
Is $40,000 a year enough? It depends on many factors. Your $1 million retirement account has a different life span depending on the city you retire. The lifespan for your $1 million account is determined by multiplying the annual costs for a person 65+ by each city’s overall cost of living index. The annual cost estimate is lowered by the average annual Social Security benefits a retiree would receive. This estimate is divided it into one million to get the number of years that $1 million would last in retirement for each city. We included a few cities that people are moving to when they cash in from the sale of their Orange County home.
Long Beach, Orange County, San Diego, California
- How long $1 million would last: 15.3 years
- Cost-of-living index: 160.4
- Annual expenditures, after using annual Social Security: $64,969
Portland, Ore.
- How long $1 million would last: 20.0 years
- Cost-of-living index: 130.8
- Annual expenditures, after using annual Social Security: $49,914
Denver
- How long $1 million would last: 20.4 years
- Cost-of-living index: 128.7
- Annual expenditures, after using annual Social Security: $48,846
Austin, Texas
- How long $1 million would last: 22.7 years
- Cost-of-living index: 119.3
- Annual expenditures, after using annual Social Security: $44,065
Las Vegas
- How long $1 million would last: 24.8 years
- Cost-of-living index: 111.6
- Annual expenditures, after using annual Social Security: $40,149
Phoenix
- How long $1 million would last: 27.6 years
- Cost-of-living index: 103.7
- Annual expenditures, after using annual Social Security: $36,131
Raleigh, N.C.
- How long $1 million would last: 28.2 years
- Cost-of-living index: 102.3
- Annual expenditures, after using annual Social Security: $35,419
Dallas
- How long $1 million would last: 28.4 years
- Cost-of-living index: 101.6
- Annual expenditures, after using annual Social Security: $35,063
Nashville, Tenn.
- How long $1 million would last: 28.5 years
- Cost-of-living index: 101.4
- Annual expenditures, after using annual Social Security: $34,961
Jacksonville, Fla.
- How long $1 million would last: 32.3 years
- Cost-of-living index: 93.5
- Annual expenditures, after using annual Social Security: $30,943
Kansas City, Mo.
- How long $1 million would last: 36.7 years
- Cost-of-living index: 86.2
- Annual expenditures, after using annual Social Security: $27,231
Wichita, Kan.
- How long $1 million would last: 39.7 years
- Cost-of-living index: 82.1
- Annual expenditures, after using annual Social Security: $25,145
Memphis, Tenn.
- How long $1 million would last: 45.3 years
- Cost-of-living index: 76
- Annual expenditures, after using annual Social Security: $22,043
This summer may be the best time to take advantage of the nearly 100% rise in home prices since the last market correction ending in 2012. If you have lived in your home 2 of the past 5 years, you are likely to receive up to the first $500,000 of profit Tax Free when selling your home! Give me a call, and I can share more information on the current real estate market, and how much cash you can receive when you decide a move is right for you. You can reach me direct at 800-944-2441, or email: Cary@Cary4Homes.com.