How Much Does it Cost to Retire In Florida?
Ah…the Sunshine State. When most of us think of Florida, we envision palm trees, white sand, golf carts, pickleball courts, and beautiful sunsets. The idea of passing our retirement days and enjoying such things is incredibly appealing to many of us.
In fact, it’s estimated that over 300,000 people move to this southernmost spot every year, making it the number one retirement spot in the United States.
Not only does Florida boast year-round sunshine and sandy beaches, but it is also a retirement-friendly state thanks to the fact that there is no state income tax.
Though you’ll still have to pay property tax (if you buy instead of rent) and you’ll have to pay sales tax, you will benefit from no income tax when it comes to your retirement funds and social security checks.
Not having to pay tax on any income stream makes Florida a great place to stretch your income dollars farther.
But all that sun, sand, and no-income-tax fun also comes with a price. Retiring to Florida will cost you around $1.2 million, which ranks slightly above some of the other most popular retirement destinations.
So, is it possible for you to consider Florida as a retirement destination? Let’s look at some variables that will affect that amount and decide if it’s a reasonable option for you.
1. Do You Have a Reasonable Cost of Living?
It is estimated that the average American will need about $54,000 a year in retirement, but in Florida that amount is estimated to be closer to $60,000.
Though some of that money may come from social security benefits, you’ll need to also plan on having a decent-sized retirement fund to make up the difference.
Though Florida offers many benefits to retirees, the cost of housing can be more expensive than in other areas, which typically tends to make up a large portion of a person’s monthly expenses.
With a nest egg of $1.2 million, you can safely assume that spending $60,000 a year is possible without depleting your savings too quickly. But, if you think you are going to want to spend more than that, you may need to think about saving more before you retire to Florida.
Housing isn’t the only thing that can sabotage your retirement budget. If fancier-than-average vacations are something you are looking forward to, you’ll need to consider that as well.
There are plenty of other expenses that can change a retiree's reasonable cost of living as well. Where you eat out, how many clubs you wish to join, what type of cars you hope to drive – all of these factors can inflate your cost of living well beyond the $1.2 million you will need to live out your retirement years comfortably in Florida. So, think about these things before you make your final decision.
2. Are You in Good Health?
For most retirees considering a move to Florida, health care needs will be a bigger priority than they have been up until this point in life.
Though Florida is known for having a great health care system and Medicare will be widely accepted at most hospitals and doctor’s offices, a person who is in poor health will have to factor in some additional costs that may make $1.2 million a more challenging amount of money to retire on.
For an average couple who is in relatively good health, it is assumed that they will spend approximately $389,000 in the retirement years of their own money on their health care needs.
But for someone who is chronically ill, needs special care, or has health issues that are above an average person’s, this amount could increase substantially, depending on how significant their issues are.
This is also not taking into consideration the cost that you will incur if you or your partner end up needing long-term care.
Long-term care expenses can wreak havoc on a person’s retirement savings, depending on where you live and how long you need it for.
Assisted living facilities tend to be much more expensive in Florida than in other parts of the country, so if health needs above and beyond the norm are concerning to you, it is important to consider that when planning how much money you will need in retirement.
On the other hand, for a person who does not think their life expectancy will be as long as predicted (for men, life expectancy in the United States is 87, and for women, it is 89), then $1.2 million may be sufficient for living in Florida, even if health costs are higher and long-term care assistance is a likely possibility.
3. Will You Have Any Large, Unexpected Expenses?
None of us have a crystal ball, and life is full of twists and turns that sometimes throw us for a loop.
Planning for a few of those is always a good idea, especially as we grow older and our income possibilities diminish.
Retiring in Florida with $1.2 million takes into consideration the fact that there will be some unexpected expenses that will probably come your way over the next few decades while you are living out your retirement years.
But – what about the larger, unexpected expenses?
Sometimes something happens in our life that we can’t plan for. Taking in an aging relative, dealing with the death of a loved one, or having a family crisis of a different sort can all add costs to your budget that you didn’t expect.
Though we can’t always plan for disaster to strike, it is a good idea to do what we can to prepare for it.
Having the right types of insurance in place, having an emergency fund, and talking to your loved ones about your budget and what they can and can’t expect from you in your retirement years are all ways to try and safeguard the money you have available and to be able to live comfortably in Florida through your years of retirement.