$1 Million in Retirement Savings May Not Last 15 Years in Major U.S. Cities

New data from GOBankingRates has revealed a concerning reality for retirees in 10 major U.S. cities, including San Francisco, New York City, and Boston. In these high-cost-of-living areas, $1 million in retirement savings would last less than 15 years, with housing and healthcare expenses being significant factors.

According to the data, in San Francisco, $1 million would only stretch for 8 years of retirement. San Jose fares slightly better at 8.94 years. New York City and Boston retirees would see their $1 million last just over 10 years. Other cities where retirement savings fall short include Oakland, Los Angeles, Seattle, Washington D.C., Miami, and Denver.

Why this matters: This data highlights the critical retirement income challenge facing many Americans, especially those in high-cost-of-living areas. It emphasizes the need for workers to save more for retirement and for innovative solutions to help retirees make their savings last.

The high costs of living in these cities, driven by factors like housing, transportation, and healthcare, make it challenging for retirees to stretch their savings over a longer retirement. Retirees also face headwinds like rising debt levels, potential Social Security funding shortfalls, and healthcare costs that are outpacing GDP growth.

To make their retirement savings last, retirees may need to make adjustments such as downsizing their home, relocating to a more affordable area, or carefully budgeting for unexpected costs. Avoiding common mistakes like supporting adult children financially, overspending on travel and luxury items, and underestimating healthcare expenses can also help.

The data serves as an important reminder for Americans to know how many they will need to save to retire comfortably in their desired location. Building additional income streams and taking advantage of catch-up contributions for those 50 and older can help boost retirement savings. As Jill Schlesinger, CBS News business analyst, notes, "Retiring with $1 million is a great goal, but that doesn't necessarily mean that you'll be able to live the retirement that you want."

Key Takeaways

• $1M retirement savings lasts 15 years in 10 major US cities due to high costs
• San Francisco, San Jose, NYC, and Boston have the shortest $1M retirement at <11 years
• High costs of living, debt, and healthcare make it challenging to stretch savings
• Retirees may need to downsize, relocate, or budget carefully to make savings last
• $1M may not be enough to live the desired retirement, and need additional income streams