How far would a 401(K) worth $1 million go where you live? Fascinating study reveals how long retirement fund would last – with savings running out in just TEN YEARS in some states

A goal of $1 million in retirement savings is a common goal for many Americans, but some states will run out of it twice as quickly as others.

Nowhere in the US would this take longer than 22 years, 8 months and 12 days.

That's how long seven figures would stretch in Mississippithe state where a $1 million pension fund would last the longest, according to the analysis by GOBankingRates.

But in Hawaii, savings would run out after just 10 years, three 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 expenses for groceries, housing, utilities, transportation and health care, based on the latest figures from the Bureau of Labor Statistics.

A $1 million pot was once considered the benchmark for a comfortable retirement, but the sum doesn't go as far as it used to as rampant inflation and rising interest rates have taken their toll on the cost of living.

In 2022, the same study found that $1 million could support a retiree in Mississippi for just over 25 years.

GOBankingRates estimates that retirees on a fixed income in Hawaii would have to spend as much as $96,982 a year on living expenses, throwing away a $1 million nest egg much faster than in the Magnolia State, where annual expenses are estimated at $44,059. .

After Hawaii, the study found that $1 million in retirement savings would be used up most quickly in New York and California.

In New York, the nest egg would last fourteen years and one month, while in California it would only last thirteen years and nine months.

Next on the list was Massachusetts, where the fund would last twelve years and nine months, and Alaska, where it would last fifteen years and three months.

In retirement hotspot Florida, the study found that $1 million in savings could sustain a retiree for 18 years and 4 months.

The analysis found that there was slightly more buffer in many states in the Midwest and South.

As in Mississippi, the funds would extend over 22 years in Oklahoma and Alabama, according to GOBankingRates.

While $1 million may not be enough to see a saver through the twilight of their lives, the number of Americans with this amount in their retirement accounts exploded last year.

Thanks to a booming stock market, the number of 401(K) millionaires will increase by about 100,000 people by 2023.

About 349,000 401(K) owners and 339,000 workers with an individual retirement account (IRA) ended the year with a seven-figure balance, according to Fidelity Investments.

Although there is a slight decrease from earlier this year, the number is still well above 2022 levels, when the figures were 299,000 and 280,000 respectively.

Retirement accounts have benefited from a strong stock market, with the S&P 500 ending the year 24 percent higher than in 2022.

The number of savers with $1 million in their retirement accounts will increase by about 100,000 people by 2023, thanks to the booming stock market

It comes after experts uncovered how much workers of each age group would need to save in their 401(K) to reach $1 million by the time they retire.

According to personal finance The motley foola 22-year-old would have to save $325 a month throughout his career to retire with $1.01 million by the time he turns 62.

If a worker didn't start saving in his 401(K) until age 27, he would have to set aside $500 a month to reach $1.03 million by the same age.

The figure rises to $750, $1,200 and $1,900 for a 32-year-old, 37-year-old and 42-year-old respectively.

It comes after experts calculated the amount needed to put away each month to generate a comfortable nest egg – depending on what age you start

The analysis assumes that the investments generate an average annual return of 8 percent, slightly lower than the average 10 percent return generated by the stock market.

According to The Motley Fool, a general investing rule is to subtract your age from 110. The result is the percentage of your portfolio you should then allocate to stocks.

For example, if you are 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.