People would like to know how much money they need to have in their accounts, before they can consider retiring. That is not always an easy question to answer.
How much folks need to save for retirement depends on several different factors. One important factor is what they plan to do during retirement.
For example, people who would like to take a lot of vacations will likely need to have more money than those who are not interested in doing that.
One large retirement nest egg number that gets thrown around a lot is $1 million. It is a nice round number and it seems like a lot to most people.
However, even a number that large might not be enough, according to the Financial Advisor in “How Far Does $1 Million Go In Retirement.”
The average cost of living varies greatly between different states and often between different regions in the states themselves. In Hawaii, $1 million would last about 12 years. However, $1 million would last nearly twice as long in Alabama.
Those figures assume that the money is sitting in a no-interest account and do not reflect any expected gains or losses on money which is still invested.
What this means for you? As you approach retirement age and begin to make decisions about when you want your retirement to start, you need to think carefully about the amount of money you have, where you want to live and how you want to live.
Make sure that you have enough before retirement. No one wants to go back to work when elderly.
Reference: Financial Advisor (Nov. 14, 2017) “How Far Does $1 Million Go In Retirement.”