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The 5 U.S. states where $500,000 in retirement savings would last you the longest

How you save can be just as important as how much you save.

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If you settle down in a sun-soaked state like Hawaii, $500,000 in retirement savings would only last about four years. But if you choose to spend your golden years somewhere like Mississippi, on the other hand, the same amount of money would last you nearly twice as long.

That's because the Aloha State has a much higher cost of living. The average annual cost of housing there is a whopping $30,775, according to GOBankingRates. That's almost five times more than the $6,297 average in Mississippi.

To determine the number of years, months, and days $500,000 would last in every state, researchers at GOBankingRates multiplied each state's overall cost-of-living index with its estimated annual expenses. The personal finance site used data from the Bureau of Labor Statistics, and multiplied yearly expenditures by other costs including housing and health care.

The states were ranked from the shortest to longest time $500,000 would stretch.

Here are the top five U.S. states where $500,000 in retirement savings would last the longest.

1. Mississippi

Amount of time $500,000 will last: 11 years, 7 months, and 18 days
Total annual expenditures: $43,129

2. Kansas

Amount of time $500,000 will last: 11 years, 4 months, and 22 days
Total annual expenditures: $45,011

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3. Oklahoma

Amount of time $500,000 will last: 11 years, 4 months, and 12 days
Total annual expenditures: $43,994

4. New Mexico

Amount of time $500,000 will last: 11 years, 3 months, and 19 days
Total annual expenditures: $44,859

5. Arkansas

Amount of time $500,000 will last: 11 years, 2 months, and 3 days
Total annual expenditures: $44,299

Prioritize essentials over retirement

Nearly 60% of Americans think $1 million is the amount they need to live out their golden years stress-free. But that's a tough goal even without the economic hardship brought on by the coronavirus pandemic.

About a quarter, 22%, of Americans have less than $5,000 saved for a secure future, and nearly 50% plan on working past retirement age, a 2019 Northwestern Mutual study found.

Last year, due to the pandemic, 3 in 10 people said they've decreased how much they're setting aside for retirement, or have been forced to stop saving altogether, according to a FinanceBuzz survey published in August.

And in a separate MagnifyMoney survey published in May, 30% of respondents said they had recently pulled an average of $6,757 out of their retirement account because they lost a job or needed extra money to cover critical expenses like food and housing.

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If your income has dropped because of the pandemic, experts agree that you should focus on the essentials first. Prioritize your key expenses such as housing and food, and save what you can in an emergency fund before focusing any funds on retirement.

"Though developing an emergency savings fund has always been important so that you can avoid incurring high-interest debt on unanticipated expenses that erode your ability to save, it has proven to be critical during the pandemic as people have lost their jobs, gotten sick from Covid, or have had other lifestyle changes," says Mike Webb, vice president of Cammack Retirement Group in New York.

If you don't currently have enough cash to handle a crisis and "have been fortunate enough to weather the storm," Webb says, "you should strongly consider taking any stimulus checks that you receive to start an emergency fund instead of spending that money."

Choose your retirement locale with care

If you are considering a move in retirement to save money, keep in mind that location, and quality of life, matters, too. Relocating "can be an excellent option for you but there can be drawbacks as well, such as being far from friends and family," Webb says.

Take Mississippi, for example. The Magnolia State ranks as the top choice for making $500,000 last longest, GOBankingRates points out, but residents there are among the least happy in the country. Mississippi landed the No. 40 spot in a WalletHub study that analyzed emotional and physical well-being.

Meanwhile, $500,000 in retirement savings would last you about three months less in Kansas, but that state ranks 10 spots higher in terms of happiness.

How you save is nearly as important as how much

Pinpointing how much you'll need to save for the future can be a challenge. Check out Grow's retirement savings calculator to get a sense of what your goal should be.

How much you're able to put away will ultimately depend on your individual circumstances, but experts suggest aiming to set aside about 15% of your monthly income. Make the most of tax-advantaged accounts such as a 401(k), Roth IRA, or a traditional IRA.

"If you are a long way from retirement age, a simple step such as increasing the amount you save, or starting to save if you have not already done so, will go a long way toward reaching your retirement and other savings goals," like creating an emergency fund, Webb says.

How you save for retirement can be nearly as important as how much you save as well, he adds. "If your company's retirement plan matches employee contributions, saving at least the minimum amount to receive the maximum match in that plan will ensure that you don't leave any 'free money' on the table in your attempt to accumulate retirement wealth."

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