If you’re like most people trying to pinpoint where to live during your golden years, you may be 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 2022, Florida experienced a net migration of over 77,290 retirees aged 60+ (the most recent data available).

In fact, SmartAsset’s most recent study indicates this number represents almost three times more people than the next-highest retirement destination of Arizona—which experienced a net influx of 23,515 retirees during that same year.

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

Top reasons to retire in Florida

In addition to an abundance of sunshine and warm weather, here are some pros for retiring in Florida:

You’d be in good company

By no means just a one-year trend, Florida has long occupied the top of the net migration retirement list. We decided to review the five most recent SmartAsset studies and analyze the numbers to identify just how popular this state truly is as a retirement destination.

A total of 862,924 people aged 60+ were represented in their “top 10 retirement destinations” data (with locations varying slightly each year). About 42% of retirees within this group ultimately ended up in Florida year in and year out; to illustrate the disparity between states, Arizona—the second-most popular destination—saw a positive net migration of 141,475 retirees (16.4%) in the five years of data we reviewed.

Florida is tax-friendly

One of the biggest benefits of retiring in Florida involves income tax—you won’t pay any! Florida is one of few states that doesn’t tax earned wages and/or sources of retirement income (e.g., Social Security benefits, pensions, 401(k)s, and IRAs). No inheritance or estate tax in Florida, meanwhile, means you can 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 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 (note 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.

Anyone wanting to live in Florida on a part-time basis until full retirement to receive those aforementioned tax benefits will need to prove they spend at least 183 days in the state (a little over half the year) and take several other steps to claim this as their primary state of residence.

Florida does tie for 25th in highest sales tax, with a combined state and local sales tax average of 7.002%, to help make up for some of this (inherently) lost revenue.

Housing is relatively affordable

According to the Zillow Home Values Index, the median home value in Florida—as of this post—is $398,077, a little higher than the U.S. median ($363,438). Compare that to $534,939 in New Jersey (where many of our readers hail from) and $434,773 in Arizona, and you can see that generally speaking, homes in Florida are affordable (despite the upswing in recent years).

Florida has low property taxes

Floridians also don’t pay much in property taxes (27 states tax at a higher rate). Based on median home values, the average annual property tax bill in Florida is $2,386; New Jersey, meanwhile, has the worst tax obligations for homeowners at an average of $9,345. It’s easy to see why Florida is so appealing in this regard.

Full-time residency can also help further reduce your property tax bill via Florida's homestead exemption. While the formula is a bit complicated, this incentive (which automatically renews) can help save you 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.

In-home healthcare services are reasonably priced

Should you one day need to self-fund long-term care, know that these services—ranging from in-home care to community and assisted living—are a little less expensive in Florida than they are nationally. For example, the monthly cost of a home health aide in Florida is $5,720 (falling below the national average of $6,292).

It's easy to travel in and out of the state

One oft-overlooked consideration is accessibility. With 19 commercial airports in Florida (per Florida Department of Transportation data), the state is easily reachable—especially important for any kids, grandkids, or other friends/family members planning to visit you.

You’ll have millions of peers

Florida is home to more than 4.5 million people ages 65 and up, comprising 21% of the state’s population and ranking behind only Maine in this respect (though Maine is much less populated) according to Journal of Consumer Affairs research. One large benefit of this is an increased chance to socialize, which can help make your post-work transition easier and work wonders for happiness and longevity.

Free education opportunities

All Florida state universities are required, by law, to waive tuition and fees for state residents above the age of 60. Those who take advantage of this won’t receive any academic credit for coursework, however, and a total of four credit hours are offered per semester (if space is available for undergraduate courses).

Top reasons to consider retiring outside of Florida

As with all other retirement destinations, Florida also has some drawbacks. These include:

Soaring homeowners insurance

Due to the high risk of hurricanes, flooding, and wind damage, insurance.com reports the average homeowners insurance premium is $1,818 more expensive in Florida compared to the national average: with an average annual premium of $4,984, based on a dwelling coverage amount of $400,000 and $1,000 deductible.

While the state government has passed legislation to combat Florida’s insurance crisis (several insurers have in fact pulled out of the market or restricted coverage since Hurricane Ian in 2022), premiums will likely continue to increase in the short term. It’s perhaps no surprise that skyrocketing premiums helped drive 276,000 residents out of Florida in 2022 (U.S. Census Bureau data).

Furthermore, depending on your exact location 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, many people seek out a wind mitigation inspection (also known as a “windstorm mitigation inspection”) to save on this insurance; policy providers are legally obligated to provide discounts—anywhere from 3 to 55% on the wind portion—rewarding a “passing grade.” Wind inspections cost approximately $75 to $150 on average (per policygenius.com).

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 one).

Automobile insurance higher than the national average

Insurance.com reports the average full-coverage vehicle insurance cost (100/300/100 with comprehensive/collision and a $500 deductible) is $2,694 per year, ranking behind only Louisiana and higher than an average of $1,895 nationwide.

Per wallethub.com, car insurance is expensive in Florida because it’s a no-fault state (meaning both parties make insurance claims in the event of an accident, regardless of who was at fault, and must have personal injury protection (PIP) in their policies to cover this). The state also has the highest percentage of uninsured drivers in the country and experiences severe weather incidents that create treacherous driving conditions.

Mixed healthcare quality

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

For example, while WalletHub ranked Florida as the 42nd best state for healthcare, the Agency for Healthcare Research & Quality (AHRQ)—within the U.S. Department of Health & Human Services—currently ranks the Sunshine State as slightly above average in this regard. Rounding out the bunch, U.S. News & World Report assigns a state ranking of 26th to Florida for healthcare and ranks the state 18th for Medicare quality.

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

You’ll want to do your research in this respect when deciding exactly where to move in the state.

Hurricanes that can jeopardize your retirement plans

If you plan on retiring in Florida, know that hurricane damage is always (unfortunately) a possibility. Take, for example, Hurricane Ian; for anyone with federal flood insurance (required for the most flood-prone areas) when this disaster struck, payouts were capped at $250,000. For anyone with homes worth more than this or more equity than the cap—common in the hardest-hit areas—their financial safety net would have taken a significant hit (not to mention the surging price of building materials and labor shortages displaced residents faced).

While the destruction from Hurricane Ian was the deadliest in almost a century, it’s prudent to know how often and where these storms are most likely to strike. Per Universal Property & Casualty Insurance Company, 41% of hurricanes that hit the U.S. make some sort of landfall in Florida (for context, twice as many hit here than the next-most hurricane-prone state of 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), 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. Have a specific destination in mind? You can use this tool to check the hurricane risk score for various areas in Florida.

More prevalent consumer fraud

The Federal Trade Commission published recent data ranking Florida #2 with respect to consumer fraud. A total of 333,570 reports were filed in the state in 2023, representing 1,563 reports per 100,000 people; only Georgia ranked higher.

The most common fraud categories were users and furnishers of credit bureau information (23%), identity theft (22%), and imposter scams (11%). The top identity theft type was credit card fraud (52%).

The need to budget for critters

Florida’s warm temperatures and high humidity levels pose a few challenges with respect to insects—with Miami, Tampa, Orlando, West Palm Beach, and Fort Myers all ranking among the top 50 cities for annual termite treatments (per Orkin). Whether you’re bug-averse or not, keep in mind you may need to budget extra for pest control services in Florida to keep these (and other) home invaders away (depending on where you live).

Crowded conditions

Florida is a popular destination for tourists, meaning some areas can get very crowded; visitflorida.com reports the state welcomed an estimated 135.02 million tourists back in 2023, 29.8 million of whom visited between October and December! While this number falls short of 2022 levels (137.4 million), a significant influx of visitors flock to the state year in and year out.

Some of the best places to retire in Florida

In many ways, researching and spending time in prospective locations is a lot like online dating; you persistently “swipe” (research) various “profiles” (destinations) in the hope of eventually finding “the one.” However, as numerous options will likely boast several key qualities you’re looking for—at least on paper—you won’t be able to identify any as a “keeper” until you meet them (by visiting) and spend time with them (by staying a while).

That said, you can rely on a few good resources out there to help narrow down your list. For example, U.S. News & World Report’s 2024 “Best Places to Retire” study (based on various factors including taxes, affordable housing, happiness ratings, and desirability) names six Florida destinations in its top 25: Daytona Beach (8th), Tampa (12th), Sarasota (18th), Lakeland (22nd), Melbourne (23rd), and Orlando (24th).

Florida is in fact well-represented in many “top places to retire” articles out there, including one published by Yahoo! that ranked the best cities to retire in based on multiple studies. Also check out WalletHub’s “Best & Worst Places to Retire” list, with several Florida towns in the top 100.

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 sheer volume of older folks who relocate there—as a great place for retirees. That said, we recommend spending at least a few weeks in the Sunshine State (or any other location of your choosing!) before you ultimately decide where to spend your golden years.

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Vision Retirement is an independent registered advisor (RIA) firm headquartered in Ridgewood, New Jersey. Launched in 2006 to better help people prepare for retirement and feel more confident in their decision-making, our firm’s mission is to provide clients with clarity and guidance so they can enjoy a comfortable and stress-free retirement. To schedule a no-obligation consultation with one of our financial advisors, please click here.

Disclosures:
This document is a summary only and is not intended to provide specific advice or recommendations for any individual or business.