A goal of $1 million in retirement savings is a common goal for many Americans — but in some states it will be depleted twice as quickly as in others.
Nowhere in the US would it take longer than 22 years, 8 months and 12 days.
That's how long a seven-figure sum would stretch in Mississippi, the state where a $1 million pension fund would last the longest, according to GOBankingRates' analysis.
But in Hawaii, the savings would be depleted in just 10 years, 3 months and 22 days – the shortest time of any state.
The study assumed a retirement age of 65 and analyzed the annual cost of living, including spending on food, housing, utilities, transportation and health care, using the latest figures from the Bureau of Labor Statistics.
A $1 million pot may once have been considered the benchmark for a comfortable retirement, but the sum no longer goes as far as it once did as rampant inflation and rising interest rates have taken their toll on the cost of living.
The same study found in 2022 that $1 million could feed a retiree in Mississippi for just over 25 years.
GOBankingRates estimates that retirees on fixed incomes in Hawaii would have to spend a huge $96,982 a year on living expenses, blowing through a $1 million nest egg much faster than in the Magnolia State, where annual expenses are estimated at $44,059 became .
After Hawaii, the study found that $1 million in retirement savings would be depleted fastest in New York and California.
In New York, the nest egg would last 14 years and one month, while in California it would only last 13 years and nine months.
In Hawaii, the savings would be used up after just 10 years, 3 months and 22 days – the shortest time of all states – the study found (Image: Kualoa Beach Park)
Next on the list was Massachusetts, where the funds would have a term of 12 years and nine months, and Alaska, where they would have a term of 15 years and three months.
Meanwhile, in retirement hotspot Florida, the study found that $1 million in savings could last a retiree for 18 years and four months.
The analysis found that there was slightly more cushion in many Midwestern and Southern states.
According to GOBankingRates, the funds would extend over 22 years in addition to Mississippi, Oklahoma and Alabama.
While $1 million may not be enough to see a saver through retirement, the number of Americans with the amount in their retirement accounts has risen sharply over the past year.
Thanks to a booming stock market, the number of 401(K) millionaires increased by around 100,000 people in 2023.
About 349,000 401(K) owners and 339,000 workers with an individual retirement account (IRA) ended the year with seven figures, according to Fidelity Investments.
Although this represents a slight decrease compared to the beginning of the year, the number is still well above 2022 levels, when the numbers were 299,000 and 280,000 respectively.
Retirement accounts have benefited from a strong stock market, which caused the S&P 500 to gain 24 percent for the year compared to 2022.
The number of savers with $1 million in their retirement accounts rose by about 100,000 people in 2023, boosted by a booming stock market
This comes after experts revealed how much workers in each age group would need to save into their 401(K) health plans to reach $1 million by retirement.
According to Personal Finance The Motley Fool, a 22-year-old would need to save $325 per month over the course of his career to retire at age 62 with $1.01 million.
If a worker begins saving into their 401(K) account at age 27, they would need to set aside $500 per month to reach $1.03 million at the same age.
For a 32-year-old, a 37-year-old and a 42-year-old, the number increases to $750, $1,200 and $1,900.
This comes after experts break down the amount you need to invest each month to generate a comfortable nest egg – depending on what age you start
The analysis assumes the investments generate an average annual return of 8 percent – slightly below the stock market's average return of 10 percent.
According to The Motley Fool, a common rule of thumb when investing is to subtract your age from 110. The result is the percentage of your portfolio that you should then invest in stocks.
For example, if you're 35 years old, about 75 percent of your portfolio should consist of stocks, while 25 percent should be reserved for bonds and other conservative investments. The idea behind this theory is that younger investors can take greater risks.