Want to Retire in Florida? Here’s What You Need to Know.

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If you’re like most people trying to map out where to live during their golden years, it’s likely you are (or are perhaps) considering the state of Florida as a potential retirement destination.

Should you decide to settle down in the Sunshine State (Florida’s nickname since 1970), know that you’ll follow in the footsteps of thousands of others; in 2021, Florida experienced a net migration of over 78,000 retirees aged 60+. In fact, according to SmartAsset’s most recent study, that number represents almost three times more people than the next-highest retirement destination—Arizona—which experienced a net influx of 25,090 retirees during that same year.

As Florida is (by far!) the top retirement destination for retirees, we decided to share this guide containing key facts to know about the state before you chart your course to the Southeastern US.

Florida dominates “Best Places to Retire” list

U.S. News & World Report publishes an annual “Best Places to Retire” study based on various factors including taxes, affordable housing, happiness ratings, and desirability. In the 2022-23 edition, nine of the top 25 U.S. cities for retirees (and four of the top 10) were located in Florida: Port St. Lucie (22nd), Ocala (16th), Lakeland (13th), Melbourne (12th), Sarasota (11th), Daytona Beach (7th), Naples (6th), Tampa (4th), and Pensacola (3rd). Even if you don’t agree with the methodology or anything having to do with this study, Florida is well-represented in many “top places to retire” articles out there: including this one by Travel + Leisure.

Most retirees continue moving to Florida

Although Florida has long occupied the top of the list, we reviewed the five most recent studies published by SmartAsset and analyzed the numbers to identify just how popular this state truly is as a retirement destination.

According to the data, a total of 843,965 people aged 60+ were represented in their “top 10 retirement destinations” (with locations varying slightly each year). About 44% of retirees within this group ended up in the state of Florida—an ongoing trend. To illustrate the disparity between states, Arizona—the second-most popular retirement destination—saw a positive net migration of 146,574 (17.4%) retirees in the five years of data we reviewed.

Florida is a tax-friendly state

In addition to the plentiful sunshine and warm weather, an array of other factors helps boost Florida’s popularity. One of the biggest? Taxes. Florida is one of few states with no income tax—meaning you won’t get taxed on earned wages and/or sources of retirement income such as Social Security benefits, pensions, 401(k)s, and IRAs. There is also no inheritance or estate tax in Florida, allowing you to leave more to your heirs.

To illustrate this, let’s assume you’re 65 years of age and earn $60,000 a year: $15,000 derived from Social Security, $30,000 from 401(k) and IRA distributions, and $15,000 generated through part-time employment. Your total Florida state taxes would ring in at…drumroll please…$0. For comparison’s sake, your annual tax bill in Arizona (based on this example)—with a state tax rate of 2.50%—could soar as high as $1,125 (Arizona doesn’t tax Social Security benefits). While this may seem like modest savings, every dollar counts if you’re on a fixed income: especially considering just how expensive retirement really is.

For those of you perhaps wanting to live in Florida on a part-time basis until you fully retire, keep in mind you’ll need to prove you spend 183 days in the state (a little over half the year) and take several other steps to claim Florida as your primary state of residence to receive those aforementioned tax benefits.

To help make up for some of this (inherently) lost revenue, Florida does rank 23rd in highest sales taxes with a combined state and local sales tax average of 7.02%.

Housing is still fairly affordable in Florida

According to Zillow.com, the median home value in Florida—as of summer 2023—was $387,537, a little higher than the median value for the United States ($346,270). Compare that to $468,096 in New Jersey (where many of our readers hail from) and $414,262 in Arizona, and you can see that generally speaking, homes in Florida are affordable (despite the upswing in recent years).

Floridians also don’t pay much in property taxes (27 states tax at a higher rate). Based on median home value, the average annual tax bill is $2,143; compare that to New Jersey, which has the worst tax obligations for homeowners (at an average of $8,797), and you can see why Florida is so appealing in this regard.

Full-time residency can also help further reduce your property tax bill, as the state offers an incentive to live there year-round via a homestead exemption: basically meaning that a $25,000 exemption is applied to the first $50,000 of your property’s assessed value if you are a permanent resident who owned the property on January 1 of that same tax year. This exemption applies to all taxes, including those for school districts, and an additional $25,000 exemption can be applied based on the assessed value of your home. Given that tax savings automatically renew each year, the homestead program can help save homeowners several hundred dollars on an annual basis.

As housing costs represent the biggest expense for retiree households, Florida residency can help many people—especially those relocating from more expensive states—reduce this expenditure.

Homeowners insurance is often more expensive in Florida

Due to the high risk of hurricanes, flooding, and wind damage, Bankrate.com reports that the average premium for homeowners insurance is 39% ($553) and more expensive in Florida compared to the national average—with an average annual premium of $1,981 (based on a dwelling coverage amount of $250,000). This number will likely continue to increase in the short term because some insurers have recently pulled out of the market or are restricting coverage. Depending on where exactly you reside in the state, you can also expect to pay a higher deductible for hurricane damage: meaning you’ll need to save extra money to cover these potential expenses.

That said, you may be able to obtain substantial savings on your insurance policy by conducting a wind mitigation inspection (also referred to as a “windstorm mitigation inspection”). That’s because your insurance provider is legally obligated to provide you with discounts rewarding a “passing grade,” equaling anywhere from 3 to 55% on the wind portion of your policy. Per Policygenius.com, the average cost of a wind inspection is approximately $75 to $150.

Finally, if you plan on moving to a barrier island such as Sanibel, Captiva, or Treasure Island, know these areas are designated “wind pool” locations and thus require a separate wind-only policy (if not included in your primary policy).

Healthcare quality is a mixed bag in Florida

When we queried various research studies on healthcare quality by state, we found the results were similar across the board despite different benchmarks: with Florida ranking in the middle or at the top portion of the bottom third (compared to other states).

For example, WalletHub ranked Florida as the #40 best state for healthcare, and the Agency for Healthcare Research & Quality (AHRQ)—within the United States Department of Health—currently ranks the Sunshine State as slightly above average in this regard (compared to all other states). Rounding out the bunch, U.S. News & World Report assigns a state ranking of 27th to Florida for healthcare (while Medicareguide.org ranks Florida 23rd among all states for elderly healthcare, specifically).

Despite these not-so-stellar rankings, high-quality hospitals do in fact exist in the state. In fact, there are several. For example, the Mayo Clinic and Cleveland Clinic—consistently ranked as top hospitals in the United States—have locations in Florida. In addition, Sarasota Memorial Hospital was recently named a “standout” hospital. For quick reference, here’s a recent list of Florida’s top-ranked hospitals.

If you require long-term care and are self-funding, know that these services in Florida—for anything from in-home care to community and assisted living—are a little less expensive than the national average. For example, the monthly cost of a home health aide in Florida is approximately $5,057 compared to the national average of $5,462 (per Genworth).

The point here is to do your research before deciding where exactly to move within Florida.

Florida and hurricanes

If you plan on retiring in Florida, know that hurricane damage can adversely impact your retirement plans. Take, for example, Hurricane Ian; if you had federal flood insurance (required for the most flood-prone areas) at the time of this event, payouts were capped at $250,000. If your home was worth more or had more equity than the cap—common in the hardest-hit areas—your financial safety net would have taken a significant hit (not to mention the surging price of building materials and labor shortages displaced residents were forced to endure).

While the destruction from Hurricane Ian was the deadliest in almost a century, you must always remain aware of how often and where these storms are most likely to strike. According to Universal Property & Casualty Insurance Company, 41% of hurricanes that hit the United States make some sort of landfall in Florida. To put this in context, twice as many hurricanes hit Florida than the next-most hurricane-prone state: Texas.

It’s also a misconception that some portions of Florida aren’t impacted by these storms. That said, some areas are more prone to direct hits than others: including the panhandle (due to the warm, shallow waters of the Gulf of Mexico), followed by the southeastern coastline (some of the worst hurricanes in U.S. history have struck this area), and southwestern Florida. Northeastern locales such as Jacksonville and inland areas like Orlando have a much lower risk of a direct strike. Those with a specific destination in mind can use this tool to check the hurricane risk score for various areas in Florida.

Other Florida retirement considerations

The Federal Trade Commission published recent data ranking Florida #4 with respect to consumer fraud. A total of 306,735 reports were filed in 2022, representing 1,446 reports per 100,000 people. Only Georgia, Delaware, and Nevada ranked higher.

More specifically, the most common categories were identity theft (27%), users and furnishers of credit bureau information (17%), and imposter scams (9%). The top identity theft type was credit card fraud (53% of incidents).

Florida’s warm temperatures and high humidity levels also pose a few challenges with respect to insects. For example, Miami, Tampa, Orlando, West Palm Beach, and Fort Myers all rank among the top 50 cities with the highest quantity of termite treatments per year (per Orkin). Whether you’re bug-averse or not, the point here is to remain cognizant of the fact you may need to budget extra for pest control services to keep these (and other) critters away, depending on where you live.

Finally, we stumbled across Neighborhoodscout.com during our research and deemed this a good resource to share. Click on the link to review home values, crime rates, demographics, and much more within Florida or any other state of your choosing.

In sum: Florida as a retirement destination

While retiring in Florida is not without its challenges (just like any other state), it’s consistently proven—by both retirement destination rankings and the actual number of older folks who relocate there—as a great place for retirees. That said, before you make any decisions, we recommend spending at least a few weeks in the Sunshine State (or any other location of your choosing!) before ultimately deciding where to spend your golden years.