8 Reasons $1 Million Will Only Last You 17 Years in Retirement in Florida

Angela Mae
3-min read
©iStock.com
©iStock.com

Once upon a time, $1 million was enough to retire comfortably. But with the cost of living rising ever higher, it might not get you quite as far as you thought.

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In Florida, $1 million will only last a little over 17 years. Depending on what age you plan to retire at and how long you expect to live, this might not be enough.

Here’s why $1 million might not be enough to retire in The Sunshine State.

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Typical Annual Costs in Florida: $58,396

According to the Missouri Economic Research and Information Center (MERIC), Florida’s overall cost of living index is 100.7. This puts Florida right in the middle in terms of affordability. Housing is more expensive in this state than the national average, while other things — like utilities, groceries and healthcare — are about on par with the rest of the country.

Here’s a breakdown of how much living in Florida costs the average person each year:

  • Housing: $12,557

  • Utilities: $4,189

  • Groceries: $4,783

  • Transportation: $4,805

  • Healthcare: $7,321

  • Total yearly cost: $58,396

Assuming the average cost of living, $1 million will let you live comfortably for 17 years, 1 month and 13 days. Given that the average American spends about 20 years in retirement, this sum of money won’t quite be enough.

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These 7 Other Individual Circumstances Could Increase Your Costs

Not everyone’s circumstances are the same, meaning you could end up spending more — or less — money than the next person in your retirement years. Here are some other major things to account for when determining whether $1 million is enough for you:

  • Longevity: The National Center for Health Statistics found that the average life expectancy is 74.8 years old for males and 80.2 years for females. If you’re in good health and have a history of long-lived relatives, you could live even longer.

  • Lifestyle: The way you choose to live has a major impact on your annual spending. If you plan to engage in a lot of expensive activities or hobbies after retirement — like traveling — your money could run out faster.

  • Charitable inclination: Philanthropy is always a win, but only if it fits into your budget. If you feel like helping other people or giving back to the community, you might want to choose another method other than cash contributions.

  • Other expenses: One million dollars will last 17 years, assuming you don’t have any debts. You might be able to afford a small mortgage payment, property taxes and insurance. But if you still owe money on a car or other loans or credit cards, this could put a major strain on your funds.

  • Healthcare and long-term care: Don’t forget about your healthcare needs. Depending on your circumstances, $7,321 might not be enough money to cover your annual medical expenses. If you anticipate needing long-term care, you’ll need a larger nest egg before retiring.

  • Taxes: Everyone’s subject to taxes, even in retirement. One area you might not have considered is the taxes on your retirement accounts. If you don’t take out the required minimum distribution (RMD) by the time you reach a certain age (72 or 73), you could be taxed up to 50% on the amount you don’t withdraw.

  • Inflation: The current inflation rate is 3.4%, but as recent years have shown, it can fluctuate wildly. If your $1 million isn’t in a high-yield account, it might end up losing its value over time.

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This article originally appeared on GOBankingRates.com: 8 Reasons $1 Million Will Only Last You 17 Years in Retirement in Florida