If you've saved $1 million for retirement, how soon can you say goodbye to your job?
SmartAsset, a personal finance technology company, estimates $1 million would be enough money to last 25.86 years in retirement in Jacksonville.
It bases that estimate on the following assumptions:
- Housing expenses would total $8,491 per year.
- Food would cost $6,474 per year.
- Healthcare expenses would cost $5,712.
- Utilities would cost $3,726 per year.
- Transportation expenses would total $6,428 per year.
To come up with the estimate, SmartAsset analyzed data on average expenditures for seniors, cost of living and investment returns to determine how many years of retirement a $1 million nest egg would cover in cities across America.
Jacksonville ranked No. 49 overall and at the top of the list in Florida, followed by Orlando and Daytona Beach. McAllen, Texas, was ranked No. 1 nationally, where SmartAsset predicted $1 million would last 32.26 years.
Miami and Fort Lauderdale were ranked at the bottom of the 10 Florida cities examined, where $1 million was predicted to last only 20.20 years.
The researchers looked at data from the Bureau of Labor Statistics on the average annual expenditures of seniors. They then applied cost of living data from the Council for Community and Economic Research to adjust those national average spending levels based on the costs of each expense category (housing, food, healthcare, utilities, transportation and other) in each city.
Using this data, SmartAsset calculated the average cost of living for retirees in the largest U.S. cities.
SmartAsset assumed the $1 million would grow at a real return (interest minus inflation) of 2%. Then, the researchers divided $1 million by the sum of each of those annual numbers to determine how long $1 million would cover retirement expenses in each of the cities in the study. Cities where $1 million lasted the longest ranked the highest in the study.