Retiring on $1M? Relocate wisely

Lauderdale tops Fla. cost survey

If you could retire with $1 million, would you rather move to a city where your money lasts longer, or would you opt for a place with more activities, access to more services — and a higher price tag?

If the city you choose is Fort Lauderdale, you can expect easy access to an active, urban lifestyle with highly rated restaurants, a popular beach, an international airport and cruise port, performing arts centers and weekly cultural events.

But be careful — your $1 million might run out before you do, a recent study by financial

planning website SmartAsset.com found.

In a ranking of how long $1 million in savings will last in retirement, Fort Lauderdale came in last — 25.2 years — among 11 Florida cities, the study found.

Your million would even last slightly longer, 25.9 years, in Miami, the site said.

The website recently ranked 11 urban areas in Florida — among 261 total across the United States — using average spending numbers for housing, food, health care, utilities, transportation and miscellaneous expenses for households 65 and older as reported in 2016, in the Bureau of Labor Statistics’ most recent Consumer Expenditure Survey. It then ran the 261 urban areas through the Council for Community and Economic Research’s Cost of Living Index calculator.

SmartAsset assumed the $1 million would grow 2 percent a year, “reflecting the typical return on a conservative investment portfolio,” according to spokesman Steve Sabato. The site then divided $1 million by the spending sum for each urban area to determine how long the nest egg would last in each urban area in the study.

Not all popular retirement destinations were included. In Florida, the study did not include West Palm Beach, Melbourne, the Keys or any city in the Panhandle. Fort Lauderdale, as defined by the Council for Community and Economic Research, includes all of Broward County, and Miami includes all of Miami-Dade County.

Of the 11 urban areas compared in Florida, $1 million lasts longest in Palm Coast, a sprawling suburb between St. Augustine and Daytona Beach in the northeastern part of the state. Your money should last 32.5 years there.

Palm Coast is followed by Tampa (32 years), Orlando, (31.6 years), Jacksonville (31.1 years), Daytona Beach (30.7 years), Vero Beach (29.9 years), Cape Coral (29.8 years), Gainesville (29.4 years), and Sarasota (27.3 years). Miami and Fort Lauderdale round out the list.

Of the 261 areas ranked nationwide, the study found $1 million would last longest, 42.3 years, in McAllen, Texas, about 9 miles from the Mexican border and 60 miles northwest of Brownsville, Texas. Fort Lauderdale ranked 222.

The $1 million lasted the shortest number of years in New York City, 12.5 years. Rounding out the bottom five, in reverse order, were Honolulu (14.8 years), San Francisco (15.9 years), Seattle (18.7 years), and Boston (18.7 years).

Housing costs played a predominant role in the number of years $1 million can last. Fort Lauderdale ranked 244th in affordability of housing costs, estimated at $13,272 a year. Miami ranked 228th in this category, estimated at $11,438 a year.

On the bright side, Fort Lauderdale ranked 104th for health-care costs, meaning retirees in 157 other cities can expect to pay more for health care. Miami was 165th.

So do the study’s findings signal an end to Fort Lauderdale as a retirement destination? Not necessarily, say local financial planners.

“Based on where we’re attracting people from, the cost of retirement in Fort Lauderdale is not that high,” said Mike Ross, a certified financial planner with Financial Connection Inc. in Boca Raton and a director on the board of the Financial Planning Association of South Florida. Ross said most of his clients who retire here are well-off northeasterners who choose the region because they prefer the pace and can handle the cost.

Not many of his clients would choose to retire in a place like The Villages, a preplanned retirement development in the middle of the state, he said.

“They would ultimately feel isolated in a place like that.” For these retirees, living in Fort Lauderdale “comes with a cost,” Ross said. “But it’s not New York cost. And it’s not Boston cost.”

Meanwhile, an increasing number of Broward County residents are looking elsewhere to retire, both to make their dollars last longer and because they desire a slower pace, said Matt Saneholtz, senior financial adviser and co-owner of Tobias Financial Advisors in Plantation. Saneholtz said he works with local clients interested in moving to North Carolina, Georgia, Tennessee and northern Florida.

Some are weary of the region’s congestion, threat of hurricanes and high price of property insurance, Saneholtz said. “It’s not the sleepy Fort Lauderdale that it used to be,” he said.

Many warm to the idea they can sell their family home here and buy a condo that’s just as spacious with less required upkeep elsewhere, he said.

Still, Broward remains a desirable retirement destination for many, he said, as long as they are wise about how they budget their money. Even well-off retirees can find they underestimated how much they will need, he said.

“All of a sudden, they’re traveling more, eating out more,” he said. “Hobbies end up costing some money.”

To stay within budget, Saneholtz recommends retirees take advantage of natural amenities, such as the beach and parks, available in South Florida. “We have free entertainment all over the place,” he said.