Is Sacramento an expensive place to retire? Here’s how long $1 million in savings would last
California is one of the most expensive places to retire, but what if you live in Sacramento?
A recent study by personal finance website GoBankingRates found that it would take California residents about 12 years, eight months and five days to spend $1 million in retirement savings.
In a separate study, published in April, GoBankingRates broke down how long $1 million would last retirees in 50 of the biggest cities in the United States, including Sacramento.
The site came up with its findings by breaking down the average annual expenditures for people 65 and older in key categories including housing, health care and utilities.
“Places like the West Coast (especially California), the East Coast and the Pacific Northwest are not great places to make your retirement money last the longest,” Jordan Rosenfeld of GoBankingRates wrote in an April 5 article titled “Here’s How Long $1 Million in Retirement Savings Will Last in 50 Mayor U.S. Cities.”
“The Midwest and the South will let you stretch your dollars the furthest,” Rosenfeld wrote.
How long could $1 million in savings last in Sacramento?
If you’re living in Sacramento, $1 million could last about 15 years, according to the GoBankingRates study.
The annual cost of living in the capital city is about $66,000.
How does Sacramento compare to other California cities?
According to GoBankingRates, the most expensive place to retire is in San Francisco, where the annual cost of living in San Francisco is about $125,000.
If you settled down in the Bay Area with $1 million, you’d likely run out of money by the eighth year, the study found.
San Jose was the second most expensive city to retire, the study found, with annual living costs of about $111,903. That means $1 million would last close to nine years in the Silicon Valley city.
In Oakland, San Diego and Los Angeles, you’d have about 11 years to spend a million bucks, while in Long Beach, it would take more than 12 years for the same amount.
In comparison, Bakersfield and Fresno are relative bargains for retirees. It’d take you nearly 18 years to run through $1 million in both Central Valley cities.
What is the most expensive place to retire in US? The cheapest?
Following San Francisco and San Jose, New York City was third on the list of the most expensive spots to spend your retirement fund.
In the Big Apple, $1 million in savings would last about 10.5 years.
You’d get more bang for your buck in Detroit, the cheapest place to retired in the United States, according to the GoBankingRates study.
You could live for about 27 years in Motor City One on $1 million, where the annual cost of living is about $37,500.
Other places where $1 million in retirement savings would last the longest include Memphis, Tennessee; Wichita, Kansas; Tulsa Oklahoma, and Oklahoma City.
How did GoBankingRates come up with findings?
To break down the retirement spending, GoBankingRates identified the 50 biggest cities in the nation, based on the U.S. Census American Community Survey, and then broke down the average annual expenditures for people 65 and older, sourced from U.S. Bureau of Labor Statistics Consumer Expenditure Survey data.
The site then analyzed each city based on the costs of groceries, health care, utilities and transportation, as well as average rental costs, to come up with the total annual cost of living. Data for that came from Sperlings BestPlaces and Zillow Observed Rental Index.
“By (dividing) the $1 million savings by the total annual cost of living gives the years it would take to drawdown $1 million savings in each of the major U.S.,” GoBankingRates said.
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