The Pros of Retiring in Florida
Here are a few pros of retiring in Florida:
No State Income Taxes
No one likes taxes. You spend all that time working, only for a chunk of your income to be taken away in taxes. In Florida, you don't have to worry about that.
In fact, the lack of state income taxes is one of the most popular reasons people choose to retire in Florida. This means that your retirement income and your Social Security benefits will not be subjected to any taxes.
There are, of course, other kinds of taxes to pay, but a major concern for most people is that they don't know how much of their retirement income or pension they'll have in their hands once they account for taxes. This stops being a point of worry because the taxes are removed altogether. Other kinds of taxes, like sales or property taxes, can easily be managed and reduced with some navigating and a little bit of cleverness. On top of that, Florida also has a homestead exemption for permanent residents.
So, if you're worried about your 401k withdrawals, or your pensions, you don't have to do that anymore. Florida isn't going to touch them.
However, there may still be some federal liabilities to pay, but these are typically not going to cut into your income too much, and you are sure to save money compared to other states.
Year-Round Warm Weather
Most retirees often get sick of the cold weather if it drags on too much. Since the weather is warmer, Florida becomes a good place to spend your retired years. In fact, people who can afford two homes often alternate between Florida and another cooler state, staying in Florida during the winter and the other state during the summer.
Though most retirees can't afford a second home, it makes sense to move to the warmer state. Though the heat can get a bit much at times, there's nothing a good cooling system can't fix.
Friendly Retiree Community
Florida also has several planned communities, especially for retired folks. This makes it much easier for retirees to find people to form friendships with or enjoy social gatherings. After retirement, it isn't easy to find opportunities for socializing since we do most of this during our work or school years. With such retired communities, retirees can enjoy their time with their friends.
In the 2010 census, Florida was discovered to have a higher percentage of folks above 65 than any other state. By 2030, it is estimated that about a fourth of the population will be retirees.
Plenty of Relaxation Opportunities
Florida has several beaches you can enjoy a relaxing time at even other forms of entertainment like outdoor activities, golf courses, etc. If you're more of an indoors person, there may also be Bingo sessions and more arranged by the retirement community you're a part of.
In fact, Florida has many options for entertainment for people of all ages. Regardless of what kind of lifestyle you prefer, you can be sure you'll have the opportunity to do that in Florida.
Average Cost of Living
A major concern for retirees is the cost of living for the state they retire in. After all, you don't want your hard-earned retirement income to be eaten away by your daily expenses.
Fortunately, this is not a concern in the state of Florida. The cost of living here is right along with the national average, so you don't have to pay large amounts for necessities. Though, of course, specialized goods or services will come with extra costs, for the most part, you can live your life comfortably on an average income.
This is also true for the real estate market. Though you can find some multi-million mansions in the state, you can also find affordable homes very easily too. There are houses in every price range, and as a retiree, you're sure to find something for yourself.
Plenty of Sunshine
If you're a fan of the sun, you'll have a blast in Florida. Many communities in Florida easily experience up to 300 days of sunshine every year, which means you'll have plenty of nice, sunny days to enjoy your retirement years.
Though, of course, this also means that you'll have to be more careful about protecting yourself against the sun's rays, but this is a very manageable task.
Prepay Health Costs
Retiring in Florida is also a great option because of the concentration of CCRCs. These Continuing Care Retirement Communities give you an easy way to protect your finances against unexpected health emergencies. With life care plans, you can predict your approximate healthcare expenses to budget accordingly. This also helps with reducing the cost of the healthcare you receive, even if you're already receiving government benefits like Medicare. As a retiree, the chances of coming across health troubles are pretty high, so this is definitely an advantage.
The Cons of Retiring in Florida
While there are several benefits, there are also a fair number of disadvantages for retirees in Florida:
Finding the Right Retirement Community Can Be Hard
Though there are many retirement communities in the state, finding the right one to suit your needs with your temperament in mind can get a little tough. This is especially true if you're more of a homebody who wants a senior support system without any of the crowd that comes with retirement communities.
In fact, with some communities, it can get a bit lonely for some retirees, even if they are surrounded by large groups, because of how many people there are.
High Sales Tax
You don't have to worry about the state income tax eating up your retirement income, but you do have to stay on alert for the sales tax. Most communities have one, so you'll probably be paying a bit more on each purchase. If you don't manage this, you can very well end up cutting into your savings and income. If you're on a budget, it's best only to purchase the necessities and stay at home unless you find another source of income.
While this is annoying, it's not impossible to manage. Property taxes are also one thing to keep in mind, and sometimes they can get so high that some retirees may be completely unable to own their own house.
Below Average Access to Healthcare
You'd expect that with such a high population of retirees, Florida would have excellent healthcare, but in reality, it's even lower than average. In fact, not only is it below average for patient care or basic checkups, but it is also below average for the management of long-term chronic diseases.
If you have any special healthcare needs that need nursing homes or assisted care, Florida may not be the best state to retire in.
Future Rising Costs of Living
While the cost of living right now is along with the average, these are greater than they were in the past and are expected to rise in the future. While this is not such a huge issue around basic goods and services, these costs skyrocket when you look at housing.
Even if you keep in mind the homestead exemptions, a house in Florida can get very expensive to continue living in, eating up a significant portion of your income. In fact, it can get so high that people who move there choose to rent instead of buy. These costs can be too much for a retiree after a while, so unless you're doing very well financially or intend to sell your home and move away after some time, Florida may not be the best place for retirees.
The population growth rate in Florida is very high – more than 20 million people live there! Many of these live around the Miami metro area, and then you have to account for all the tourists who visit the state each year.
This means that not only is the state generally very crowded, it also has a major traffic problem. Unless you can walk to wherever you need to be, or use public transport, you'll have to factor in a large chunk of your time being spent in commute.
Even for something as simple as heading out for shopping or to grab a bite, you'd have to put aside a significant amount of time. This is also why retirement communities are so common since having everything within walking distance makes things a lot easier and reduces the amount of time you'd spend navigating through traffic.
Unexpected Animal/Pest Problems
You may have heard of strange experiences with animals from Floridians, and while many of these do seem like something straight out of a comedy movie, they're very much real.
Florida does have an alligator problem – some even as dangerous as to go after your pets or children, and they're not very small either. Walking near any body of water in Florida would mean to keep an eye out for alligators in case one passing by saw you and decided you looked like a tasty meal. There are also snakes and other dangerous animals you have to stay wary of.
Mosquitoes also pose a problem in the state, with dengue and zika viruses frequently reported, even after a couple of bites. While there are pest control programs, this doesn't mean you're 100% safe. House pests are also common, with termites and rats causing significant issues for people who live in Florida. The problem escalates when you consider that there is no real winter season, and these animals are not leaving anytime soon because they like the warm weather.
Though Florida is far from the only state with a hurricane problem, it happens to lie on the spot where the Atlantic and Caribbean converge, which puts it at a greater risk. This means that storms are frequent and come with the added problem of extra insurance coverage when you're buying your home. In fact, you'd also need to protect your other assets in case of flooding. Global warming and rising sea levels have also become a bigger concern for the future.
Frauds and Scams
Florida would be the sure winner if there were a contest for which state had the most fraud incidents. Unfortunately, the state is ranked as the top in the whole country for fraud, with around one in every ten people reporting such incidents.
These include everything from identity theft to debt collection, and the loss per incident is much higher for older residents than younger ones.
Retiring in Florida has its upsides. The lack of state income taxes and the existence of communities that can make your retired life easier are two major advantages. On top of that, you'd find you can make your money last longer in Florida than in other states if you manage it well.
However, it comes with its own set of problems that you want to keep in mind before you decide whether or not you wish to retire here.