A 67-year-old baby boomer retiring now with $1 million in the bank will generate $40,000 a year to live on adjusted for inflation and assuming a sustainable withdrawal rate of 4 percent
A 42-year-old Gen Xer, whose $1 million at retirement will only generate an inflation-adjusted $19,000 a year.
A 32-year-old millennial planning to retire at 67 with $1 million would live below the poverty line.
"Today's generation of working people grew up in an era where their parents went to a mailbox, and a check appeared. But pensions are almost extinct," said Mark Avallone, president of Potomac Wealth Advisors. "People have to self-fund their retirement, and the enormity of that challenge is underestimated."
A 42-year-old Gen Xer, whose $1 million at retirement will only generate an inflation-adjusted $19,000 a year.
A 32-year-old millennial planning to retire at 67 with $1 million would live below the poverty line.
"Today's generation of working people grew up in an era where their parents went to a mailbox, and a check appeared. But pensions are almost extinct," said Mark Avallone, president of Potomac Wealth Advisors. "People have to self-fund their retirement, and the enormity of that challenge is underestimated."
WalletHub conducted a study this year to determine how long a nest egg of $1 million would really last. The personal finance site compared average expenses for people age 65 and older, including groceries, housing, utilities, transportation and health care.
Naturally, depending on where in the U.S. you live, the longevity of a $1 million nest egg varies. Those dollars stretched furthest in states like Mississippi, Arkansas and Tennessee, where retirees could live a life of leisure for at least a quarter of a century.
However, in Hawaii, where residents pay roughly 30 percent more for household items across the board, that same amount will only get you just shy of a dozen years — largely because of the higher cost of living and pricey real estate.
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