It’s time to retire, and you have a million bucks set aside for your golden years.
You’re set for the remainder of your days, right? Maybe not.
A new study by SmartAsset, the New York-based personal finance technology company, finds that $1 million will last you an estimated 24.24 years if you live in Sacramento, accounting for expenses that include housing, food, health care and utilities.
Sacramento ranked 232nd out of 261 U.S. cities in the study, a testament to the relatively high cost of living in California. Among California cities, however, Sacramento ranked fourth of nine metro markets.
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The study projected that a million dollars will last a state-leading 26.32 years in the Southern California city of Bakersfield; in pricey San Francisco, you’ll run through your million in slightly less than 16 years. San Francisco ranked No. 259 out of 261 nationally.
The study estimated that $1 million won’t last 20 years in the cities of Orange, Oakland, San Diego and Los Angeles.
New York City ranked at the bottom of the U.S. list, with $1 million running out after just 12.54 years. Honolulu was next to last at 14.81 years. After San Francisco, Seattle and Boston rounded out the bottom five, each projected at 18.7 years.
If you want to make your $1 million nest egg last the longest, head to South Texas. The Lone Star State city of McAllen topped the SmartAsset list, with $1 million lasting a projected 42.29 years. Nearby Harlingen, Texas, was second nationally, at an estimated 39.46 years.
The top five were rounded out with Richmond, Ind. (39.31 years); Kalamazoo, Mich. (38.07 years); and Cleveland, Tenn. (37.44 years).
A.J. Smith, SmartAsset’s vice president of financial education, said the company “hopes that this study gets people thinking about, planning for and saving for retirement. One important consideration is whether you want to stay put or relocate. We hope these findings serve as a helpful guide.”
In its study, SmartAsset calculated the average cost of living for retirees in each jurisdiction, utilizing federal Bureau of Labor Statistics data on annual expenditures of seniors living in the respective communities. SmartAsset said it applied cost-of-living data from the Arlington, Va.-based Council for Community and Economic Research to determine yearly costs in key segments.
The study assumed a conservative 2 percent rate of return – interest, minus inflation – but it did not factor in other income sources such as Social Security, pensions or inheritance.
The study’s breakdown for Sacramento showed projected annual expenses for retirees of $11,888 for housing, $6,610 for food, $6,017 for health care, $3,303 for utilities and $8,497 for transportation.
The big divide between San Francisco and Sacramento came in housing costs, with SmartAsset projecting annual expenditures of $28,494 to live in the city by the bay. In bottom-ranked New York City, the annual housing expense was projected at a whopping $41,087.
The study results can be seen here.