Five States Where Your $1 Million 401(k) Won’t Last Past Age 75. Make Sure You Know Your Risk
Hawaii drains a $1 million 401(k) fastest at just 12 years and 8 months, driven by extreme cost of living rather than taxes, versus a national average of roughly 19 years.
California, Massachusetts, Connecticut, and New York all deplete a $1 million balance in under 16 years, hit hardest by high state income taxes and second-worst property tax burdens.
Relocating from a high-cost state like Hawaii to a low-cost one like Mississippi or Iowa can add seven to ten years of retirement runway on the same $1 million balance.
A 62-year-old with a $1 million 401(k) balance in Buffalo faces very different arithmetic than the same balance in Boise. SmartAsset recently asked how long $1 million lasts in retirement, and the answer is that the ZIP code often matters more than the portfolio. Seven figures used to be a universal green light. It no longer is.
Nationally, housing services run near $3,979.8 billion annualized and healthcare near $3,830.8 billion, both climbing faster than headline CPI at 332.8. In high-cost coastal states, those two line items compress a million-dollar plan by five to seven years versus the national baseline.
Methodology. The runway figures below are 24/7 Wall St. estimates, not an outside index. We assume a $58,000 baseline annual retiree spend, a 4% initial withdrawal adjusted for local cost of living, state tax treatment of 401(k) distributions as ordinary income, and effective property tax drag on a modest owner-occupied home. The national average under those inputs is roughly 19 years and 4 months.
5. New York: roughly 15 years, 9 months. New York carries the heaviest income-adjusted state and local tax burden in the country at $10,828 per capita, and its property tax system ranks 47th of 51. It still lands only fifth here because the cost-of-living index sits at 107.9, below the top four. Taxes hurt New Yorkers most; housing and healthcare hurt the others more.
If you've saved over $1,000,000, this guide is for you. The last thing you want in retirement is to run out of money, you want your money to generate lasting income while you enjoy your life.
4. Connecticut: roughly 15 years, 3 months. Connecticut's property tax rank of 50th of 51 is the second-worst nationally, and its income-adjusted tax burden runs $7,628 per capita. Fairfield County property bills alone can eat an extra 8% to 10% of an after-tax withdrawal. New Jersey deserves an honorable mention at 43rd on property tax, just outside this list.
3. Massachusetts: roughly 14 years, 8 months. With a cost-of-living index of 105.8 and a property tax rank of 46th, Massachusetts extracts more from a fixed withdrawal than most retirees expect. The state exempts Social Security, but 401(k) distributions are fully taxable as ordinary income above the standard exemptions.
2. California: roughly 14 years, 1 month. The cost-of-living index is 110.7, the highest in the continental U.S. California's income-adjusted tax burden is $8,835, sixth nationally. A retiree drawing $58,000 to $70,000 lands in the state's 6% to 8% marginal brackets rather than the headline 13.3%, and that is what actually shows up on the return each year.
1. Hawaii: roughly 12 years, 8 months. Hawaii's case rests on cost of living rather than taxes. The property tax rank is a middle-of-the-pack 24th, but the cost-of-living index sits at 110.0 and purchasing-power-adjusted real income is only $65,095, well below California's $78,015. Groceries, utilities, and homeowner's insurance grind down a million-dollar balance faster than any income tax could.
Mississippi exempts qualified retirement distributions from state income tax for retirees who meet the plan and age conditions, and its cost-of-living index is 87.0. Real income of $59,743 versus a national average near $73,207 tells the story: fewer nominal dollars, but each one buys more.
West Virginia ranks 23rd on the 2025 State Tax Competitiveness Index and is phasing out its tax on Social Security benefits. Some of the lowest housing costs in the country do more work here than any single tax provision.
Iowa now exempts most retirement income from state tax for residents 55 and older who meet the statutory conditions. Its cost-of-living index is 87.8 and purchasing-power-adjusted real income is $74,574, higher than New York's. A $58,000 budget behaves closer to $66,000 in local terms.
Moving one state across the right border can add seven to ten years of runway to the same $1 million. That is the difference between running out at 78 and running out at 88. State income tax on distributions is only one of several IRS rules that quietly drain retirement accounts (we mapped nine of them in a free guide here: The Retiree's Tax Trap Map). With the 2027 Social Security COLA tracking toward 3.1%, benefit growth will not close the gap on its own for someone anchored in Honolulu or San Jose.
Reprice your budget line by line in the target state. Pull actual property tax bills from county assessor sites, homeowner's insurance quotes, and Medicare Advantage plan availability. Treat the Tax Foundation's income-adjusted burden ranking as a starting point that needs local verification.
Model the two-year IRMAA lookback before you sell. If the move involves liquidating a house or converting a large chunk of the 401(k) to Roth, do it in a year that will not push MAGI into a Medicare surcharge tier that follows you for two years after landing.
Confirm the retirement-income exemption in writing. Iowa, Mississippi, and West Virginia all attach age or dollar conditions to their 401(k) exemptions. Read the current-year instructions for the state return before you change your driver's license.
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