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Is $1.5 Million Really Enough to Retire? A Look Across the HemisphereThe “magic number” and its changing valueBy Estefanía Muriel for Ruta Pantera on 10/27/2025 6:58:13 AM |
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| Is $1.5 Million Really Enough to Retire? A Look Across the Hemisphere The “magic number” and its changing value For years, $1.5 million has been considered the so-called "magic number" for a comfortable retirement in the United States. However, recent estimates show that this amount varies depending on where you live. GoBankingRates, cited by USA Today , estimates that in low-cost states like West Virginia, savings could sustain a retirement for more than 50 years; in expensive areas like Hawaii, however, they would barely last 17 years. The disparity is enormous: taxes, housing, healthcare, and lifestyle determine the actual length of retirement. The confidence gap among American retirees This gap explains why more and more Americans are doubting their readiness for retirement. Surveys by the Employee Benefit Research Institute show that only a minority feel confident they can maintain their standard of living after they stop working. In states like California and New York, where the annual cost of a comfortable life can exceed $120,000, the supposed magic number quickly fades. Conversely, those who move to more affordable areas—Arkansas, West Virginia, or Kentucky—could stretch their savings for decades, especially if they own a home and have Social Security. Canada: High net worth, but persistent fears Retirement concerns aren't limited to the United States. In Canada, the 2023 Survey of Financial Security revealed that families aged 55 to 64 with a home and pension have a median net worth of nearly CAD $1.4 million. Still, nearly 60% of Canadians fear running out of money after retirement. The general perception is that relying solely on personal savings is insufficient, and that the combination of public pensions and housing remains the main safety net. | ||||
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Mexico and Brazil: the challenges of savings and coverage Further south, the situation takes on other nuances. In Mexico, the AFORES system has improved coverage, but high labor informality and low contribution rates limit pensions. Despite managing trillions in assets, most workers retire with modest replacements that rarely exceed 40% of their previous salary. In Brazil, although the public system has broad coverage, its sustainability faces challenges: recent reforms raised the retirement age and adjusted benefits to contain public spending that exceeds 13% of GDP. A hemispheric comparison: what changes depending on where you live Comparing the four countries reveals a pattern: the “ideal” retirement figure cannot be universal. Across the hemisphere, the sense of sufficiency depends more on the economic environment and the social safety net than on the number in the bank account. In the United States, $1.5 million may be just the starting point; in Canada, a similar sum, supplemented by public pensions, may be sufficient; while in Mexico or Brazil, the challenge remains expanding coverage and increasing retirement income. Ultimately, where you live determines not only how much living costs, but also how many years of peace of mind can be bought with the oft-cited “magic number.” | |||
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