According to a recent article at Raymond James, over 300,000 people relocated last year for retirement, representing a 44% increase from 2022. Approximately one-quarter of the retirees relocated to another state, with Florida being the most popular destination.
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Retirees often flock to the Sunshine State because of the low cost of living and favorable tax implications, but it is important to do your own research before considering a move.
At GOBankingRates, we asked Dennis Shirshikov, a professor of finance at the City University of New York and Head of Growth at GoSummer, to provide insight into what questions potential retirees should be asking themselves before relocating to Florida for their golden years.
Here are the seven questions he suggested considering if you want to retire in Florida.
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1. What Is the Cost of Living in Your Desired Area?
“The cost of living in Florida can vary significantly depending on the region,” explained Shirshikov. “For instance, coastal cities like Miami and Naples tend to have higher living costs compared to inland areas. It’s important to research and compare the costs of housing, groceries, healthcare, and utilities in different parts of the state.”
Retirees living on a fixed income will want to make sure they can afford the move to Florida. Reporting by Career Karma indicates that you could live comfortably in the state on a median salary of $51,908 per year. However, you may need significantly more, depending on where you decide to reside.
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2. How Will You Handle Healthcare Expenses?
Retirees must take healthcare costs into consideration. As you age, your healthcare needs may change substantially. Being prepared for the potential expenses is imperative to a successful retirement. Luckily, healthcare expenses are lower in Florida than the average in the U.S. As indicated by RentCafe, healthcare costs are approximately 5% lower than the national average.
“Florida is known for its excellent healthcare facilities, particularly for retirees,” noted Shirshkov. “However, healthcare costs can be substantial, especially as you age. Consider the availability and cost of health insurance plans, Medicare coverage, and out-of-pocket expenses.”
3. What Are Your Housing Options and Their Costs?
“Housing is a major expense in retirement,” said Shirshkov. “Decide whether you want to buy a home, rent, or perhaps consider a retirement community. Each option comes with different financial implications.”
Housing costs in the Sunshine State tend to be on par with the national average but can vary greatly depending on the city you live in. In some areas, such as Miami, the cost of housing can be 50% higher than the average in the United States.
4. What Are the Travel Expenses?
“Florida is a large state, and travel expenses can add up, whether you plan to travel within the state or back to visit family elsewhere,” stated Shirshkov. “Consider the costs of flights, gas, car maintenance, and other travel-related expenses.”
5. How Will Your Taxes Change?
Retirees who have experienced a change in income will need to consider any tax obligations that they may have if they relocate to a new state. Florida historically has favorable tax implications for retirees, but it is still important to understand state law and how you may be impacted.
“Florida has no state income tax, which is a major draw for retirees,” explained Shirshkov. “However, other taxes, such as property taxes and sales taxes, can still impact your budget. Investigate the tax implications of your move thoroughly.”
6. What Is Your Plan for Long-Term Care?
“Long-term care can be one of the most significant expenses in retirement,” noted Shirshkov. “Evaluate options like long-term care insurance, assisted living facilities, or home health care. Planning ahead can help manage these costs.”
7. Will You Have a Source of Supplemental Income?
“Consider whether you might need or want to work part-time, start a small business, or rely on investment income to supplement your retirement savings,” said Shirshkov. “This can help bridge any gaps in your retirement budget.”
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This article originally appeared on GOBankingRates.com: Want To Retire in Florida? Ask Yourself These 7 Questions First
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