Is $1 million the new benchmark for a comfortable retirement?

The term “millionaire” used to apply exclusively to the rich. Lately, though, Americans increasingly opine that anyone who hopes to retire in comfort will need at least $1 million in savings.

In one 2023 survey, from the global investment firm Schroders, older workers predicted they would need $1.1 million to retire comfortably. A survey from Northwestern Mutual put the figure at $1.27 million. In a 2024 poll by Charles Schwab, 401(k) participants said they’d need $1.9 million to retire. A New York Life survey set the bar at a staggering $4.3 million.

Not a millionaire? Don't despair

If you aren’t a millionaire, don’t despair: Most of us don’t have anywhere near that much in retirement savings.

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According to the 2022 federal Survey of Consumer Finances, the median household in the 55-64 age group holds about $185,000 in retirement savings. Among all families, the median retirement balance is $87,000.

Is that enough?

In a new analysis, the personal finance site GOBankingRates identified 16 states where, by their math, you’ll need at least $1 million in savings to fund 25 years of retirement.

The report considers annual expenses for a retired person in each state, drawing from Labor Department statistics, the local cost of living index, and Social Security data.

First, some good news: The two most popular retirement states, Florida and South Carolina, are not on the million-dollar list. Those states rank 1 and 2 for inbound retirees in a recent report from AARP.

But New Jersey and Washington State, third and fifth on the AARP list, do require a $1 million retirement fund, according to the GOBankingRate analysis.

Here are the 16 million-dollar retirement states

Here are snapshots of the 16 million-dollar retirement states:

Colorado

Annual retirement expenses: $61,807

Minimum savings for 25 years’ retirement: $1 million

Arizona

Annual retirement expenses: $63,600

Minimum savings for 25 years’ retirement: $1.05 million

New Jersey

Annual retirement expenses: $63,773

Minimum savings for 25 years’ retirement: $1.06 million

Maine

Annual retirement expenses: $64,004

Minimum savings for 25 years’ retirement: $1.06 million

Rhode Island

Annual retirement expenses: $64,756

Minimum savings for 25 years’ retirement: $1.08 million

Connecticut

Annual retirement expenses: $65,855

Minimum savings for 25 years’ retirement: $1.11 million

Oregon

Annual retirement expenses: $66,317

Minimum savings for 25 years’ retirement: $1.12 million

Maryland

Annual retirement expenses: $66,375

Minimum savings for 25 years’ retirement: $1.12 million

Vermont

Annual retirement expenses: $66,433

Minimum savings for 25 years’ retirement: $1.12 million

New Hampshire

Annual retirement expenses: $66,838

Minimum savings for 25 years’ retirement: $1.13 million

Washington

Annual retirement expenses: $66,895

Minimum savings for 25 years’ retirement: $1.13 million

Alaska

Annual retirement expenses: $73,082

Minimum savings for 25 years’ retirement: $1.29 million

New York

Annual retirement expenses: $73,140

Minimum savings for 25 years’ retirement: $1.29 million

California

Annual retirement expenses: $78,864

Minimum savings for 25 years’ retirement: $1.43 million

Massachusetts

Annual retirement expenses: $85,571

Minimum savings for 25 years’ retirement: $1.6 million

Hawaii

Annual retirement expenses: $103,610

Minimum savings for 25 years’ retirement: $2.05 million

$1 million is just a number, advisers say

The notion that Americans need $1 million in the bank to retire has become ingrained, teased in hundreds of personal-finance headlines.

But $1 million is just a number, financial advisors say, and a deceptively simple one.

“I think it’s easy to explain concepts by using that number, and it’s more realistic than using a $100,000 or $10 million,” Colin Exelby, a certified financial planner in Towson, Maryland, said in an AARP report that sought to calm fears about a million-dollar retirement. “But other than that, I don’t think it’s really helpful and can probably cause anxiety and stress if you’re not hitting that number.”

In the real world, a family might need more than $1 million to fund their retirement. Another household might need less.

“Each person is very different,” said Michelle Crumm, a certified financial planner in Ann Arbor, Michigan.

Crumm has a client who is retiring this year with a net worth of $180,000.

“She has a pension and Social Security and doesn't own a home,” Crumm said. “Her budget is balanced,” with an annual vacation fund.  “I am not worried about her successfully retiring with the strategy that we have developed.”

Crumm has another client, a married couple in their 50s with a net worth of $2.2 million, five years retired.

“They have a mortgage, credit card debt, and spend beyond their means,” she said. “We have a plan built, but they are not sticking to it. I am very concerned about their retirement.”

Does retirement last 25 years?

Likewise, 25 years is only a ballpark estimate of how long the average retirement will last.

It’s a tricky calculation. Average life expectancy falls between 70 and 80. Yet, once you have made it to 65, you’re likely to live well past 80.

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Twenty-five years of retirement is a reasonable benchmark, advisers say, if you retire after 60. But, again, it doesn’t cover everyone.

“A lot of high-income earners desire escaping the stress of their job well before 65, usually around 55,” said Christopher Lyman, a certified financial planner in Newtown, Pennsylvania. “This obviously lengthens that timeframe.”

Older Americans with healthy lifestyles can live well past their mid-80s, Lyman said. People with chronic diseases may never reach 80.

Photo gallery:From Colorado to Hawaii, states where you need at least $1 million to retire

If the list of million-dollar retirement states hasn’t sobered you, we will leave you with another GOBankingRates report to digest: 10 cities where you’ll need more than $1 million to retire.