A million dollars might seem like a lot of money for retirement but that million can go a lot further depending on where you live.
A million dollars might seem like a lot of money for a retirement nest egg, but that money can go a lot farther depending on where you live.
And a million dollars will last longer in Palm Coast than in any other city in the Sunshine State, according to financial planning site SmartAsset.com.
The website looks at how many years $1 million lasts in retirement and found it wouldn’t run out for nearly 32.5 years in Palm Coast. Tampa came in second, with the million dollars lasting just over 32 years, followed by Orlando, Jacksonville and Daytona Beach, where the nest egg could sustain a retiree for nearly 31 years.
Nationally, McAllen, Texas came in at No. 1, with the million dollars lasting more than 42 years. Palm Coast ranked in 82nd place nationwide, with Daytona Beach coming in at 142.
SmartAsset used data from the Bureau of Labor Statistics on average annual expenditures by seniors across the country. Using cost of living data from the Council on Community and Economic Research, the report adjusted the average spending levels based on costs of several expense categories including housing, food, health care, utilities and transportation in each city.
As part of the calculation, the $1 million nest egg was assumed to grow at a real return rate — defined as interest minus inflation — of 2 percent.
“Our study aims to give people an apples-to-apples comparison of how long a retirement fund lasts in different areas throughout the U.S.,” AJ Smith, vice president of financial education at SmartAsset, said in an email. “Using $1 million as a constant helps illustrate how much further a retirement fund will go in some areas of the country.”
David Fowler, president of Alliance Financial Partners in Palm Coast, said a $1 million retirement fund is not an unreasonable goal.
“I think it’s very realistic that someone could accumulate a million-dollar nest egg,” he said. “Unfortunately, I think it is uncommon.”
Fowler said if a person starts early in life with a retirement savings plan, such as an IRA, it would not be especially hard to reach the $1 million goal.
“If you started in your 20s, that could be as little as a couple of hundred dollars a month,” he said. “But the longer you wait, the more you have to put away to make it happen.”
Palm Coast Assistant City Manager Beau Falgout said he is not surprised at the city’s high ranking in the study.
“I think this finding reinforces that Palm Coast is a great place to retire,” he said. “The study also supports why so many families are also calling Palm Coast home. I think the secret has been out for some time and people are continuing to discover Palm Coast.”
With Flagler County’s population topping 110,000, according to the latest U.S. Census Bureau estimates, the SmartAsset findings could propel that number even higher. Falgout said Palm Coast officials are preparing for more population growth.
“The city is already planning for the future,” he said. “The next wave of retirees will look for an active outdoor lifestyle, a focus on health and wellness, a variety of housing options and a downtown to connect, share, learn and enjoy the arts and entertainment.”
While quality of life was not one of the factors SmartAsset used in its study, Falgout said it is an important component for current and future residents.
“Not only will your retirement savings last longer here, but you will also enjoy those many years because of our active outdoor lifestyle,” he said. “And families will enjoy that same quality of life and that same great value as well.”
Told about Palm Coast's status as the No. 1 place in Florida where a million-dollar nest egg would last the longest, Roger Ruffo chuckled, saying, "There are a lot of rich people here."
Ruffo said he moved to Palm Coast in 2005 from Connecticut because it was a relatively new town at the time, having incorporated in 1999.
"There weren't many people here, that was the whole thing to it," he said. "It was a good place and it's still a good place."
Debbie Callahan, president of the Daytona Beach Area Association of Realtors, said the SmartAsset study just adds to the reasons for people to consider retiring to the area.
“I feel with the storms they had this winter, we don’t have enough land for everybody who should be moving here,” she said. “Our market is still a very strong market in Daytona Beach. When houses come on the market, they sell in three to four days if it is priced right.”
The report could also spur more residential construction in an already growing market, said Debi Peterson, executive officer at the Flagler County Home Builders Association.
“As long as the word gets out and people read that, I think it would be an additional reason to move here,” she said.
Peterson said there are a variety of housing options for potential retirees to choose from that would help make that million-dollar nest egg last.
“As long as you’re not building the custom McMansion home, I would think with that kind of money you could find a home,” she said.
SmartAsset’s Smith said the ultimate goal of the report was to focus attention on retirement planning.
“We release these studies to get people talking and thinking about things like retirement and how much they should be putting away to meet their retirement goals,” Smith said. “Everyone’s situation will be differing, so using something like an online retirement calculator can show how much you need to save to retire when and where you want to retire.”
Million-dollar stretch
A million-dollar nest egg can last a long time if you choose the right place to retire. The following are the top places in Florida to make that dream come true.
1. Palm Coast: 32.48 years
2. Tampa: 32.04 years
3. Orlando: 31.65 years
4. Jacksonville: 30.86 years
5. Daytona Beach: 30.74 years
6. Vero Beach: 29.85 years
7. Cape Coral: 29.82 years
8. Gainesville: 29.41 years
9. Sarasota: 27.31 years
10. Miami: 25.88 years
SOURCE: SmartAsset.com