Yahoo Finance 6 Reasons $1 Million Will Only Last You 17 Years in Retirement in Virginia
Retirement planning has become almost a contact sport in recent years when it comes to pitting your finances against real estate prices, cost of living increases and general economic volatility. Even if you manage to save at least $1 million — which, by normal standards, is a large sum of money — to ensure a comfortable life post-retirement, you still may have to stretch your budget more than you’d expect.
Learn More: Early Retirement: Here’s How Much Savings Is Needed To Retire by 40 in Every State
Check Out: The Surprising Way You Can Get Guaranteed Retirement Income for Life
Living in Virginia can quickly deplete even a substantial million-dollar nest egg within 17 years, which may have you questioning whether your time or money will run out faster.
Wealthy people know the best money secrets. Learn how to copy them.
Quick Take: Retiring in Virginia With $1 Million
GOBankingRates recently conducted an original study to determine how long $1 million would last you in retirement in each state. You would think that once you reach millionaire status, you would be financially set, but you may not be for as long as you would like. Here are some key findings for retirement in Virginia:
How long $1 million in savings will last: 17 years, 0 months, 22 days
Annual groceries cost: $4,826
Annual housing cost: $12,347
Annual utilities cost: $4,359
Annual transportation cost: $4,577
Annual healthcare cost: $7,676
Total annual expenditures: $58,627
Be Aware: Retirement Planning: How Much the Average Person Under 70 Spends Monthly
Virginia Retirement: 6 Reasons Why $1 Million Only Lasts 17 Years
Location always factors into your budget, and whether you live in Virginia Beach or closer to Washington, a Virginia retirement doesn’t have an infinite timeline during which you’ll have easy access to comfortable living. Here are six reasons why $1 million might only last you about 17 years in retirement.
What You Spend on Food and Groceries
Dealing with rising food costs is unfortunately a necessity as, well, you need to eat, even in retirement. Residents of Virginia are estimated to pay around $4,826 a year on average for groceries alone.
Knowing this, you may want to cut back on eating out — or switch to generic brands when shopping — at the beginning of your retirement to try and stretch your funds further.
Housing Costs and Affordability
One of the biggest expenses in any budget, but especially with a fixed income, is undoubtedly real estate. The average annual housing cost for those living in Virginia is around $12,347.
What you spend on housing will depend on such factors as property taxes and location, so living beneath your means or maybe moving out from a major metropolitan area could save you from having to dip to deeply into your retirement savings straight away.
How Much Utility Bills Eat Into Your Monthly Expenses
Sometimes, just keeping the lights on can greatly diminish your monthly budget. On average, utility bills cost Virginians about $4,359 a year.
There may be some wiggle room in this amount, if you try things like energy-efficient appliances or better insulating your home to keep either the heat or air conditioning where it belongs.
Gas and Transportation Costs
Fortunately, when you are done working, you won’t have to worry about the daily commute to the office, but this doesn’t mean you don’t still have to get around. If you live in Virginia, you can expect to pay around $4,577 a year on transportation alone.
The Cost of Healthcare
Healthcare costs tend to rise with age, and Virginia is no exception. Medicare doesn’t cover everything, and out-of-pocket expenses for medications, treatments and long-term care can add up. Virginia’s average annual healthcare costs are estimated to be $7,676.
Ironically, one of the biggest risks to a retirement plan is living longer than expected. Advances in healthcare mean people are living longer, which is great news — but also means needing more money than just 17 years’ worth to stretch out your retirement income.
The Increasing Cost of Living
Virginia’s cost of living is higher than the national average, but that doesn’t mean you can’t edit your budget even within your retirement community. In fact, the total amount for annual expenditures was found to be approximately $58,627.
This number isn’t undoable or even unlivable, but it’s nothing to scoff at, particularly when it pertains to how you can live off your retirement savings for the rest of your life.
Final Take To GO
The bottom line is that while $1 million might seem like a substantial amount for retirement, various factors in Virginia can make it challenging to make this sum last more than 17 years. To put this in perspective: If you retire at age 65, this would only last you until age 82, especially if you can’t necessarily count on Social Security benefits.
Rising costs of living, healthcare expenses, taxes, inflation, increasing longevity and more all contribute to the rapid depletion of retirement savings. Careful planning, conservative spending and considering supplemental income sources are essential strategies for ensuring the financial stability of your retirement account in Virginia.
Methodology: In order to find how long $1,000,000 will last across the country, GOBankingRates first found (1) the national average annual expenditures for people 65 and older, sourced from the Bureau of Labor Statistics’ 2022 Consumer Expenditure Survey data. Then, GOBankingRates created (2) state-level annual expenditure estimates by multiplying the national figure by each state’s overall cost of living index score for the 3Q 2023 from the Missouri Economic Research and Information Center. Finally, GOBankingRates found (3) how many years $1,000,000 will last in each state by dividing $1,000,000 by each state’s average annual expenditures estimate. All 50 states and the District of Columbia were then ranked, with No. 1 being the state where $1,000,000 will last the longest and No. 51 being the state where it will run out most quickly. GOBankingRates provided supplemental information on the average annual cost of groceries, housing, utilities, transportation and healthcare for people 65 and older in each state by again using MERIC’s cost of living indices for each category to factor out national estimates from the CES. All data was collected on and up to date as of April 23, 2024.
More From GOBankingRates
This article originally appeared on GOBankingRates.com: 6 Reasons $1 Million Will Only Last You 17 Years in Retirement in Virginia
