The Pros and Cons of Retiring in Florida

Florida has long reigned as America’s retirement capital, with more than 20% of its population aged 65+ – 4% higher than the national average. For many, the allure of palm-fringed beaches, tax-friendly policies and vibrant senior communities makes the Sunshine State a dream destination. Yet, while Florida’s advantages are undeniable, retirees must also weigh challenges like hurricane risks, rising insurance costs and seasonal overcrowding when considering Florida as their retirement destination.

Choosing where to retire is one of the most consequential financial decisions you’ll make. In this guide, we’ll unpack Florida’s unique blend of opportunities and trade-offs, empowering you to make an informed choice. Whether you envision lazy days on the Gulf Coast or an active lifestyle in a 55+ community, thoughtful planning is key to maximizing your retirement years.

WHY FLORIDA IS A POPULAR RETIREMENT DESTINATION

Florida’s reputation as a retiree haven is no accident. Year after year, it tops lists of the best states for retirement – and for good reason. From tax savings and sun-soaked living to senior-first infrastructure, it’s no wonder more than 4.8 million residents aged 65+ call the Sunshine State home. While challenges like hurricane risks exist, Florida’s blend of financial perks and lifestyle opportunities makes it a top contender for retirees seeking warmth – both climatic and social.

THE PROS OF RETIRING IN FLORIDA

Here’s a look at some of the top benefits Florida has to offer retirees:

1. TAX ADVANTAGES: KEEP MORE OF YOUR RETIREMENT INCOME

One of the biggest reasons retirees flock to Florida is the state's tax-friendly policies. Unlike many other states, Florida does not tax Social Security benefits, pension income or withdrawals from retirement accounts like 401ks and IRAs. This can result in significant tax savings, especially for retirees on a fixed income.

• No state income tax: Florida is one of only a handful of states that do not impose a state income tax, meaning retirees can maximize their retirement savings without worrying about state taxes reducing their income.
• No inheritance or estate tax: Retirees who plan to pass down assets to their heirs can do so without the burden of state inheritance taxes or estate taxes, which can be substantial in other states.
• Homestead exemptions: For those eligible, Florida offers a homestead exemption of up to $50,000 for primary residences, helping homeowners reduce their property tax burden. This can be especially beneficial for retirees looking to downsize or relocate to an affordable area.

For comparison, retirees in high-tax states like California, New York or Illinois may face income taxes on their pensions and retirement withdrawals, as well as higher property taxes. Florida’s tax benefits can lead to thousands of dollars in annual savings, making it a financially appealing retirement destination.

2. YEAR-ROUND WARM CLIMATE: EMBRACE THE “ENDLESS SUMMER” LIFESTYLE

Florida’s mild winters and sunny weather are another major draw for retirees, particularly those looking to escape the cold. The Sunshine State got its name for good reason – Florida gets between 221 and 249 sunny days per year, creating the perfect environment for outdoor activities like:

• Golfing on world-class courses throughout South Florida, Tampa Bay and Central Florida
• Boating, fishing and beach outings along the Gulf Coast and Atlantic shoreline
• Walking, biking and hiking in Florida’s many nature preserves and state parks

For those who prefer to split their time between two states, the “snowbird” lifestyle is common. Many retirees spend six months and a day or more in Florida to help establish residency and take advantage of tax benefits while returning north during the summer. This seasonal migration allows retirees to enjoy the best of both worlds – warm winters in Florida and cooler summers in their home states.

3. SENIOR-FRIENDLY COMMUNITIES: BUILT FOR CONNECTION

Florida is home to some of the most well-known retirement communities in the United States, offering social opportunities, health care access and amenities tailored to older adults.

Here are just a few options when it comes to retiring in Florida:

• The Villages: One of the largest retirement communities in the country, with over 130,000 residents, featuring golf courses, social clubs and health centers.
• Palm Coast & Palm Beach County: Known for their upscale communities, proximity to the Atlantic Ocean and strong health care infrastructure.
• Coastal enclaves like Naples: Offer luxurious, active senior living communities with easy access to beaches, cultural attractions and medical care.

Many 55+ communities in Florida provide built-in social networks, fitness programs and community activities, making it easy for retirees to maintain an active and fulfilling lifestyle.

4. HEALTH CARE ACCESS: WORLD-CLASS CARE AT YOUR DOORSTEP

Access to quality health care is a key consideration for retirees, and Florida offers some of the best hospitals and medical facilities catering to the senior population.

While Medicare Supplemental plans offer nationwide coverage, Florida also has a wide selection of localized Medicare Advantage plans, allowing retirees to choose health care options that best fit their needs. While some rural areas may have fewer health care providers, major metro areas like Miami, Orlando and Tampa offer comprehensive medical care for seniors.

5. AFFORDABLE LIVING IN SELECT REGIONS

While some parts of Florida, like Miami, Naples and Palm Beach, have a high cost of living, there are still affordable options for retirees. Rural areas and inland communities often have lower property taxes than major metropolitan areas.

Additionally, Florida’s housing market has cooled down recently, with home inventory increasing as more sellers list their properties. This trend could benefit retirees looking to buy a home in Florida at a more reasonable price.

There have also been discussions about Florida potentially eliminating property taxes, which could significantly impact retirees in the future. While nothing is finalized, it’s a topic worth watching.

THE CONS OF RETIRING IN FLORIDA

While Florida offers numerous benefits for retirees, there are also significant challenges to consider. From hurricane risks and rising insurance costs to overcrowding and extreme summer weather, retirees must weigh the following factors carefully before making the move.

1. HURRICANE RISKS AND INSURANCE COSTS

Florida’s location makes it highly susceptible to hurricanes and tropical storms, particularly from June through November. Coastal areas and low-lying regions often fall into mandatory evacuation zones, requiring residents to relocate temporarily during severe weather events. While Florida has strong building codes and hurricane preparedness plans, the risks remain a major consideration for retirees, especially those purchasing homes in flood-prone areas.

Additionally, homeowner’s insurance premiums have skyrocketed, largely due to increased hurricane activity and widespread insurance claims. Many insurers have left the state, forcing homeowners to seek coverage through Citizens Property Insurance Corporation, Florida’s state-backed insurer of “last resort.”

For retirees living on a fixed income, these rising costs can put a strain on their retirement budget. It’s essential to factor in potential insurance expenses when considering a move to Florida.

2. HIGH COST OF LIVING IN POPULAR AREAS

While some parts of Florida remain relatively affordable, popular retirement destinations like Naples, Sarasota and Palm Beach have a significantly higher cost of living than the national average.

• Naples ranks among the most expensive places to retire, with median home prices exceeding $577,000.
• Sarasota, known for its beaches and cultural scene, has seen rising housing costs, with the median home price now above $550,000.
• Everyday expenses like groceries, dining and utilities also tend to be higher in tourist-heavy cities.

Retirees looking for affordable housing may need to explore inland areas like Ocala, Lakeland or Palm Bay, where home prices are relatively lower and property taxes are more manageable.

3. EXTREME SUMMER HEAT AND HUMIDITY

While Florida’s warm climate is a major draw, the summer months can be brutally hot and humid, particularly in South Florida. In Miami, for example, temperatures frequently reach between 76°F and 91°F, with humidity levels making it feel even hotter. Outdoor activities may be uncomfortable or unsafe during peak summer heat, leading to health risks for older adults, such as heat exhaustion, dehydration and heatstroke.

While you can escape the heat by staying indoors or near air conditioning, constant A/C can drive up utility costs and electricity bills. For retirees who prefer a more temperate climate year-round, locations like North Carolina or South Carolina may offer a better balance of mild winters without the extreme summer heat.

FINAL THOUGHTS ON RETIRING IN FLORIDA

While Florida remains a popular retirement destination, it’s important to consider how financial planning plays a role in making retirement dreams a reality.

Florida is ideal for retirees who:

• Want to lower their tax burden by avoiding state income tax
•  Enjoy year-round sunshine and an active outdoor lifestyle
• Prefer a social retirement with access to senior-friendly communities

However, it may not be the best choice for:

• Retirees concerned about hurricane risks and rising insurance costs
• Those who prefer cooler summers and less crowded living conditions

Start Planning Your Retirement in Florida

Deciding whether to retire in Florida is about more than just enjoying beaches and warm weather – it requires careful financial planning to make the most of Florida’s tax benefits and lifestyle opportunities.

At Edelman Financial Engines, we can help retirees:

• Assess personal retirement goals and how Florida fits into their long-term financial plan
• Optimize retirement savings while navigating tax planning
• Develop a customized investment strategy that aligns with their ideal retirement lifestyle

Ready to explore whether retiring in Florida is the right choice for you? Connect with an Edelman Financial Engines advisor today or visit a location near you to start planning for a secure and fulfilling retirement.