Lexington, KY Or Myrtle Beach, SC? Where Does A $1 Million Retirement Go Further?

The post Lexington, KY Or Myrtle Beach, SC? Where Does A $1 Million Retirement Go Further? appeared first on 24/7 Wall St..

A couple at 67 with $1 million and combined Social Security drawing $5,000 a month faces a common retirement question: Lexington, KY or Myrtle Beach, SC? The math works in both places, but very differently, and one location keeps significantly more money in their pocket over 25 to 30 years.

A 4% withdrawal on $1 million generates $40,000 in year one, paired with $60,000 in Social Security, for roughly $100,000 gross retirement income. After federal taxes, accounting for partially taxable Social Security and the standard deduction plus over-65 add-on, they have roughly $90,000 to $92,000 to spend. That is the working budget in both cities.

Two Very Different Retirement Dreams

Lexington offers four seasons, a vibrant downtown anchored by the University of Kentucky, world-famous horse country, and a central location within a day’s drive of much of the Midwest and Southeast. Housing costs remain reasonable, insurance is relatively affordable, and natural-disaster risk is low. For retirees with family scattered across the region, Lexington makes visiting grandchildren and relatives far easier than many coastal destinations.

Myrtle Beach sells a different vision of retirement. The Atlantic Ocean, mild winters, dozens of golf courses, fresh seafood, and a lifestyle that can feel like a permanent vacation draw thousands of retirees each year. South Carolina is generally tax-friendly for retirees, but the tradeoff is greater exposure to hurricanes, coastal flooding, humidity, and rising insurance costs that have become a growing concern along much of the Southeast coast.

What $1 Million Actually Buys

Housing sticker price is close to a wash. Lexington’s typical home value sits at about $322,000, and Myrtle Beach at roughly $321,000. A retired couple in either market can buy a sensible three-bedroom ranch with a garage and have plenty of portfolio left.

Carrying costs diverge fast. In Fayette County, an owner-occupied home pays an effective property tax rate around 1.1% to 1.2%, and the Kentucky homestead exemption knocks roughly $49,100 off assessed value for anyone 65 or older, putting annual bills near $3,000. Homeowners insurance in Lexington averages around $1,200 to $2,000.

Horry County assesses owner-occupied primary residences at 4% ratio, making property tax often $1,500 or less on a $320,000 home. That advantage is real but comes with a cost. Coastal homeowners insurance in Myrtle Beach commonly runs $1,800 to $6,500, with wind-and-hail policies or higher hurricane deductibles often layered on top. Flood insurance is a third line if the property is in a mapped zone.

The Cost Most Retirees Miss

The real carrying cost of a coastal home is the premium compounding for thirty years in a market where reinsurance keeps repricing, well beyond what year one’s bill suggests. A $4,500 policy growing at 7% annually, conservative given recent coastal trends, more than triples by year 20. The same house in Lexington starts cheaper and grows slower because Kentucky is not absorbing Atlantic-basin risk.

Add second-order costs: salt-air corrosion on HVAC condensers, repainting on a coastal cycle, roofs inspected after every named storm, and periodic evacuation hotel bills. Healthcare access is comparable in both cities. Medicare Part B in 2026 is $202.90 per person before any IRMAA, and a couple should plan on $13,000 to $16,000 annually combined for premiums, supplements, dental, and out-of-pocket spending.

Who Wins The Retirement Math?

Lexington’s all-in annual budget for this couple lands near $68,000 to $72,000, leaving a cushion of roughly $18,000 to $22,000 against $90,000 of after-tax income. Kentucky taxes retirement distributions above the state’s exclusion amount, but Social Security is fully exempt and the overall tax burden remains moderate.

Myrtle Beach’s all-in budget runs closer to $74,000 to $82,000 once homeowners insurance, hurricane reserves, HOA fees common in coastal communities, and higher discretionary spending are included. South Carolina is friendly to retirees from a tax perspective, but much of that advantage can be offset by insurance and housing-related costs. The cushion narrows to roughly $8,000 to $16,000.

Over a 30-year retirement, that difference matters. The Lexington couple has more room to absorb market downturns, healthcare surprises, and inflation without increasing withdrawals. The Myrtle Beach couple can still make the numbers work, but they have less margin for error and greater exposure to rising insurance costs along the coast.

If the ocean is the dream, the solution may be a smaller home, a higher insurance deductible, and a realistic plan for hurricane disruptions. If the goal is maximizing financial flexibility while preserving portfolio longevity, Lexington has the stronger case. Myrtle Beach may win the view, but Lexington wins the math.

The post Lexington, KY Or Myrtle Beach, SC? Where Does A $1 Million Retirement Go Further? appeared first on 24/7 Wall St..