$1M Retirement Nest Egg Lasts Just 12 Years in NJ

New Jersey retirees hoping to live comfortably on a million-dollar nest egg may need to reconsider their long-term financial plans. A new study reveals that $1 million in retirement savings will last only about 12 and a half years for someone seeking a comfortable lifestyle in the Garden State—making New Jersey the fifth most expensive state for retirees nationally.

The analysis from financial website GoBankingRates found that only Hawaii, California, Massachusetts, and Washington state have higher costs of living for retirees, according to Patch.

High Annual Living Expenses Drive Costs

The study calculated that New Jersey retirees face annual living expenses of approximately $79,957 to maintain a comfortable lifestyle. This figure includes $16,399 for housing, $8,528 for healthcare, $5,164 for groceries, $4,886 for transportation, and $4,356 for utilities, along with other miscellaneous expenses.

“These costs reflect New Jersey’s overall high cost of living, which ranks among the highest in the nation,” explained financial planner Jennifer Richardson, who specializes in retirement planning for New Jersey residents. “Property taxes, in particular, contribute significantly to the housing expenses that retirees face in our state.”

With expenses approaching $80,000 annually, even a million-dollar retirement fund depletes rapidly without additional income sources. The mathematics is straightforward—dividing $1 million by nearly $80,000 in annual expenses yields approximately 12.5 years of financial coverage.

Social Security Benefits Extend Financial Runway

The picture improves somewhat when Social Security benefits are factored into the equation. According to the GoBankingRates analysis, these benefits reduce the annual withdrawal needed from retirement savings to approximately $41,315, allowing that same $1 million to stretch to about 24 years.

“Social Security benefits provide a critical financial foundation for most retirees,” said economist Michael Jordan, who studies retirement trends. “However, the program was never designed to be a complete retirement solution, which is why supplemental savings remain essential.”

Financial advisors recommend that New Jersey residents planning for retirement should aim to maximize their Social Security benefits by carefully considering when to begin claiming them, as delaying claims until age 70 can substantially increase monthly payments.

Regional Disparities Create Retirement Migration

The study highlighted dramatic regional differences in how far retirement dollars stretch. In West Virginia, the state where retirement savings go furthest, $1 million would last 24.5 years—nearly twice as long as in New Jersey. Mississippi (23.3 years) and Arkansas (22.6 years) rounded out the top three most affordable states for retirees.

“These regional disparities help explain the ongoing migration patterns we see among retirees,” noted demographics researcher Sarah Thompson. “Many New Jersey residents choose to relocate to lower-cost states like Pennsylvania, North Carolina, or Florida to extend their retirement savings.”

This migration trend has accelerated in recent years as Baby Boomers retire in greater numbers and seek to maximize their fixed incomes by relocating to areas with lower taxes and housing costs.

Retirement Savings Gap Raises Concerns

Perhaps most concerning in the study was the revelation that 28 percent of respondents reported having no retirement savings at all, while many others fell significantly short of the million-dollar benchmark that already proves inadequate in high-cost states like New Jersey.

“This retirement savings gap represents one of the most pressing financial challenges facing our society,” warned Dr. Elena Rubinstein, professor of economics at Rutgers University. “Many Americans are simply unprepared for the financial realities of retirement, particularly those living in high-cost regions.”

Financial experts recommend that New Jersey residents aim to save considerably more than the often-cited $1 million retirement target, with many suggesting $1.5 to $2 million as a more realistic goal for those planning to remain in the state throughout retirement.

Strategies for New Jersey Retirees

Financial advisors suggest several strategies for New Jersey residents approaching retirement who want to maintain their quality of life without relocating. These include downsizing to reduce housing costs, carefully managing healthcare expenses through comprehensive Medicare supplemental coverage, and considering part-time work during early retirement years.

“We often recommend a phased retirement approach for our New Jersey clients,” explained certified financial planner Robert Menendez. “This might involve working part-time for several years while beginning to draw from retirement accounts, which can significantly extend the lifespan of retirement savings.”

Tax planning also plays a crucial role, as New Jersey is one of just a few states that taxes some retirement income, though it does exempt Social Security benefits and provides generous exemptions for seniors with moderate incomes.