7 Reasons You Might Not Want To Retire in Florida

Steve Helber / AP / Shutterstock.com

Commitment to Our Readers

GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.

20 Years
Helping You Live Richer

Reviewed
by Experts

Trusted by
Millions of Readers

For many people, a Florida retirement sounds like the dream and the sunniest forecast possible for their hard-earned retirement savings. It allows them to escape the cold and snow they put up with for decades in the Northeast or perhaps other parts of the country. Sounds like a great deal, right?

However, the Sunshine State certainly has its retirement benefits, but there are also some potentially serious downsides of retiring there. Besides the snakes and gators and endless traffic, there are also financial concerns such as how far you can stretch your Social Security checks and just how much your retirement income can compete with the high cost of living.

GOBankingRates recently conducted a study to determine just how much savings someone would need to have stored up before retiring in every state. Florida, unfortunately, isn’t on the lower end of that spectrum. Here are some key takeaways: 

• Annual cost of living minus Social Security income: $36,829.42
• Minimum savings needed for 20 years of retirement: $736,588
• Minimum savings needed for 25 years of retirement: $920,736
• Minimum savings needed for 30 years of retirement: $1,105,989

If you have your sights set on retiring in Florida, here are some reasons you may want to reconsider.

Homes Can Be Expensive

Many states have watched their housing prices balloon over the past few years thanks, in part, to a shortfall in new construction that dates back to the Great Recession. However, none have seen their housing prices skyrocket the way Florida has. GOBankingRates found that Floridians pay an average of $12,557 a year in housing costs. 

Healthcare Can Be Costly

Florida has numerous excellent medical facilities where patients can receive top-quality care. As great as that is though, healthcare can be costly in Florida. That’s especially problematic for retirees, who are more likely to need expensive medical care. GOBankingRates found that retirees pay around $7,321 a year in healthcare costs.

Be Aware: 5 Key Signs You Should Switch Banks in Retirement

While Medicare does cover most medical expenses for retirees over 65, there may still be out-of-pocket costs. These include deductibles, premiums and co-pays. There are also costs like long-term care, dental care and vision care that are typically not covered. Plus, Florida’s aging population could further push prices upward for everyone.

Retirement Communities May Be Expensive

In addition to healthcare costs, there is also the cost of retirement communities, which is something many retirees eventually need. On the plus side, retirement communities offer many seniors a comfortable and welcoming lifestyle. This is only compounded by the fact that, according to GOBankingRates, the average annual cost of living in Florida is about $58,396.

However, these communities can be expensive in Florida. The real cost might vary significantly, depending on things like where the community is located and the fees it charges. Some retirement communities charge significant fees for maintenance, security and other services. If you see yourself living in one of these communities, investigate the rates in Florida.

You Might Get Hit by a Hurricane

Florida is known for being at risk for hurricanes, which can cause severe property damage and be costly to repair. The risk can be significant, depending on where you live in Florida. Plus, the risk of hurricane damage may increase due to climate change which has been the case over the last several years.

You May Need Flood Insurance

In much of the country, flood insurance isn’t something people think about as a necessity. But it’s often required in flood-prone areas, which includes much of Florida.

Homes with government-backed mortgages in high-flood-risk areas are required to have flood insurance. It isn’t federally required if you have a mortgage from a private lender, but they may still require it. The average cost of flood insurance in Florida is around $700 yearly. However, premiums may vary significantly, depending on where you live and your property’s risk assessment.

Property Taxes Can Be High

The average property tax rate is 0.91% in Florida, which puts it right in the middle in terms of property tax rates. However, even Florida’s relatively modest property tax rate can still result in significant property tax, thanks to the state’s rapidly rising home costs. For example, 0.91% paid on Florida’s median $400,000 home would equate to $3,640 in property taxes per year.

Plus, property tax rates may vary depending on where you live within the state. Property tax rates may vary by city, county and school district. This means you could end up paying even more in property taxes if you move to Florida.

Don’t Forget Sales Tax

One thing that sometimes draws people to Florida is its lack of income tax. On the one hand, this could be seen as a good thing for retirees, many of whom live on a fixed income. But don’t forget state and local sales tax, which can be over 7% in Florida. That can significantly impact retirees when they purchase goods and services.

One positive is that certain goods, such as groceries and prescription drugs, are exempt from sales tax in Florida. However, some jurisdictions might still add a tax on these items. The bottom line is that if you are flocking to Florida to escape income taxes, its sales taxes can quickly sour your plan.

Bob Haegele contributed to the reporting for this article.

Share This Article: