Florida is often regarded as an appealing destination for retirees, offering a multitude of advantages. However, before making the decision to relocate and embark on your retirement journey in the Sunshine State, it is essential to carefully consider various factors that could impact your overall retirement experience.
When considering retirement in Florida, it is advisable to evaluate your specific needs, preferences, and financial situation.
Here are 5 important things you need to know if you are retiring in Florida.
1. House prices are very high
The housing market in the United States has experienced some fluctuations in recent months, with certain cities like Las Vegas and Seattle witnessing a decline in housing prices. However, the situation in Florida tells a different story, as the state has not experienced a significant drop in housing prices. In fact, prices have remained relatively high, with only a slight decrease from the peak reached last year.
As of March, the median home sale price in Florida stood at $400,000, marking a 3.2% increase compared to the previous year. While this figure is slightly lower than the median price of $490,000 recorded in July, it indicates that housing prices in the state have remained steady and have not undergone a substantial decline.
Although the housing market in Florida has not seen the same level of price decreases as some other areas, there is still a possibility for further downward movement. This means that prospective buyers may find more affordable housing options compared to the higher cost-of-living cities they may be relocating from.
2. Property tax exemptions
When you own a home in Florida, it is important to be aware of the property tax obligations associated with homeownership. However, compared to other parts of the country, the average property tax rates assessed by local cities and towns in Florida can be considered moderate.
Florida’s average property tax rate tends to be slightly lower than the national average, which can be advantageous for homeowners. Additionally, as a retiree choosing to make Florida your permanent residence, you may qualify for certain exemptions that can help reduce your property tax burden.
One exemption that you may be eligible for is the senior citizen exemption, which provides a tax break for individuals of a certain age. This exemption acknowledges the financial considerations faced by seniors and aims to alleviate some of the property tax burden they may experience.
3. High state sales taxes
In order to compensate for the absence of income tax, the state of Florida implements a sales tax of 6% on most purchases. It is important to note that in addition to the state sales tax, local cities and towns may apply additional sales taxes on certain items, which can vary across different areas of the state.
When planning your retirement budget in Florida, it is crucial to consider the impact of sales tax on your overall expenses. This means factoring in the additional costs that may arise from sales tax when making significant purchases or recurring expenses such as groceries.
Sales tax can have a considerable impact on your finances, particularly when it comes to larger purchases like vehicles, electronics, or furniture. These types of transactions can attract higher sales tax amounts, potentially affecting your budgetary considerations. Additionally, groceries and other everyday items that you regularly purchase can accumulate sales tax charges over time, which should be taken into account when estimating your living expenses.
4. Expensive property insurance
Property insurance is a substantial expense for homeowners in Florida and significantly exceeds the rates seen in other parts of the country.
The average annual premium for property insurance in Florida exceeds $4,000, which is three times higher than the national average. Moreover, it is projected that the statewide average will witness a significant increase of at least 40% in 2023, according to the Insurance Information Institute.
Several factors contribute to the rise in property insurance costs in Florida. One factor is the substantial damage caused by hurricanes in recent years, which insurance companies have had to cover. The frequency and severity of these natural disasters have led insurers to reassess the risks associated with providing coverage in the state, resulting in higher premiums.
5. Florida’s healthcare system is not the best
Florida’s healthcare system is not highly regarded when compared to the healthcare systems in other parts of the country, especially considering the additional healthcare needs that retirees may have as they age.
One significant factor contributing to the challenges faced by Florida’s healthcare system is the state’s limited federal Medicaid funding. This lack of funding can have a significant impact on retirees who are not yet eligible for Medicare but still require access to affordable healthcare services. The absence of robust federal support for Medicaid leaves some retirees without adequate coverage and may result in higher out-of-pocket costs for medical treatments and services.
In addition, the state’s geographical layout, with its urban centers and dispersed rural areas, can make it more difficult for individuals, particularly retirees, to conveniently access necessary healthcare facilities. Limited availability of medical professionals in certain regions and long distances between healthcare providers can potentially impede timely access to healthcare services.
