IRS announces $300+ hike in 2025 tax refund – Will you get more money too?
Retirement is the time of life when you want to enjoy the fruits of your years of hard work. But will the money you have saved last you all the way through retirement? If you have $1 million (roughly Rs. 8.3 crores) in savings, how many years will it last depends on which state you live in.
There is a huge difference in the cost of living in different states of the US. In some places, this amount can last up to 90 years, while in some expensive states, it runs out in just 12-15 years. In this article, we will understand in which states your retirement savings can last longer, which states have higher expenses, and what steps you should take to make your money last longer.
IRS 2025 Tax Refund – Will you get more money?
| Topic | Details |
|---|---|
| Longest Lasting State | West Virginia – 88.9 years |
| Shortest Lasting State | Hawaii – 12.5 years |
| Average Longevity of $1M | Varies between 12.5 and 88.9 years |
| Major Cost Factors | Housing, healthcare, food, taxes |
| Retirement Strategies | Smart budgeting, relocation, investment diversification |
The IRS (Internal Revenue Service) has announced an average increase of $300+ (about Rs 25,000) in tax refunds for 2025. This increase will provide relief to millions of Americans, especially those who depend on tax refunds.
The impact of cost of living on your retirement fund
How long your money will last in any place depends on the cost of living there.
- Living is easy and affordable in cheap states – like West Virginia, Mississippi, Arkansas etc. Here the price of houses is low, medical expenses are affordable and everyday things are cheap.
- Savings can be exhausted quickly in expensive states – like Hawaii, California, Massachusetts. In these states, buying a house is expensive, rent is high and health services are also expensive.
States where $1 million will last the longest
If you want your savings to last longer, it’s best to live in these affordable states:
- West Virginia – 88.9 years
- Mississippi – 87.5 years
- Arkansas – 76.7 years
- Louisiana – 76.7 years
- Oklahoma – 71.4 years
Benefits of living in these states:
- Lower home prices
- Affordable medical care
- Lower taxes
- Lower transportation and grocery costs
States where $1 million will run out quickly
If you live in these expensive states, your savings may run out quickly:
- Hawaii – 12.5 years
- California – 16.3 years
- Massachusetts – 19.4 years
- Washington – 21.9 years
- New Jersey – 24.2 years
Reasons for living in expensive states:
- High property prices and rent
- Expensive grocery and utility bills
- High medical expenses
- High state taxes
Ways to make your retirement fund last longer
If you want your savings to last longer, try these strategies:
1. Consider moving to a lower-cost state
If you live in an expensive city, you can reduce your expenses by moving to a lower-cost state.
What to consider?
- Low home prices
- Good medical facilities
- Better lifestyle and amenities
2. Reduce unnecessary expenses
If you limit expenses, the savings will last longer.
How to do it?
- Buy a smaller house instead of a big one – you will save on taxes and maintenance
- Cut down on unnecessary expenses – reduce spending on eating out frequently and luxury items
- Use senior discounts – many stores and services offer discounts for retired people
3. Invest wisely
Investing your savings in the right place can give you higher returns.
What to do?
- Invest in dividend-paying stocks – which will give you regular income
- Invest in bonds and annuities – these give stable returns
- Make balanced investments in mutual funds and index funds
4. Make proper use of social security
Make proper use of the social security provided by the government, so that there is no pressure on your savings.
- Delay taking benefits – you will get more money if you wait until age 70
- Work part-time – this will increase your income
- Take advantage of spousal benefits – married people can avail more benefits
5. Plan for healthcare expenses
Health expenses are the biggest expense in retirement. To reduce it:
- Invest in an HSA (Health Savings Account) – this makes medical expenses tax-free
- Take a Medicare Advantage plan – this will reduce healthcare expenses
- Live in a state with affordable medical facilities
Additional things to keep in mind
- Inflation and economic conditions: Things get more expensive over time, so your investment strategy should be one that grows with inflation.
- Retirement tax planning: Some states tax pensions and Social Security, so use a Roth IRA for tax-free withdrawals.
- Lifestyle and longevity: If you live longer, you will need more savings. Adopting a healthy lifestyle can reduce medical expenses.
FAQs (Frequently Asked Questions)
How much savings is required for retirement?
Depends on your lifestyle and expenses, but generally saving 25 times your annual expenses is considered appropriate.
What is the 4% rule?
This rule says that if you withdraw 4% of your total savings every year, your savings will last for at least 30 years.
Is it possible to live off Social Security?
No, as it only covers 40% of pre-retirement income. Savings are necessary for the rest of the needs.
What are the best states for retirement?
States like Florida, Texas, Tennessee, and Carolina are great options for tax-free pensions and low cost of living.
Is it possible to retire in expensive states?
Yes, but it will require strict budgeting. You can increase savings by buying a smaller house, spending less or doing a part-time job.