Retirement is something that we all positively look forward to. A life with less worries, no work, just full of relaxation and chilling. Drinking beer or coffee on a weekday. Watching movies whenever we want to. Traveling the world. Spending more time with friends and family. Making every little minute counts. Receiving pension from the government. Enjoying the fruit of our investments.
But retirement is something that we should plan years before we get there. There are just many things to consider, such as the lifestyle we want, goals, and of course – where we want to spend the rest of our life.
If you’re like most Americans, you already have one place in mind – Florida.
Why not? The state offers a lovely weather, beautiful cities, breathtaking views, and world-class beaches. Living in Florida is like being in a vacation every single day of your life. Not to mention the fact that you don’t have to pay income taxes!
Florida is deemed the best state for retirees, with 88,663 senior citizens who moved there this 2018. That’s a huge gap from Arizona, which came second in the list (having 28,600 retirees).
But the big question is – can you afford retirement in the sunshine state?
If you want to spend your retirement in Florida, there are a few things you should know.
Housing can be expensive.
The average selling price of houses in Florida is $224,600, according to zillow.com. This is expected to increase by 5.4% in 2019. The median cost per square foot is $164. If you plan to rent, the median monthly cost is $1,800. Of course, the price varies by city or county. In more expensive cities like Miami and Naples, home prices are higher, at $300,500 and $329,100 respectively. In Jacksonville, homes have a median price of $152,300. If you’re after a waterfront property, here’s a tip: Tampa Bay has some of the state’s most affordable places to own a house if you choose carefully. The sooner you save money, the more likely you can find your dream home in Florida once you retire.
As well as the Homeowner’s insurance.
Aside from your monthly mortgage, you should also consider your monthly home insurance premium. Unfortunately, home insurance in the Sunshine State is the priciest in the country. Part of the reason why is the high risk of hurricanes. Yes. It isn’t always warm and sunny in Florida. Make sure you have enough savings to cover 2% – 5% of your coverage amount for hurricane damage to your home. Check the home’s insurability before purchasing. Adding improvements that make your Florida home more resilient to hurricane can also lessen your monthly premium.
Healthcare cost is another thing.
According to this 2017 article in Washington Post, a 65-year-old couple would need $275,000 to cover their healthcare and medical expenses throughout retirement. The good news is the Affordable Care Act in Florida (ACA) offers increased health insurance availability to eligible individuals and families, which include tax credits and subsidies.
You have one less worry: taxes.
Perhaps one of the major reasons why many people, particularly seniors, move to Florida is because there is no income tax as well as inheritance tax or estate tax. However, certain conditions should be met. For instance, if you have another property at a different state, you have to prove that your primary state of residence is Florida by actually staying in the state for 186 days or half a year.
Florida is great for travel and leisure.
As mentioned, living in Florida is like being on vacation every day. There are many interesting places for couple and single seniors travel, from the breathtaking water views of Miami Beach to world-famous theme parks like the Universal Studios and Disney World (where you can take your grandchildren), and the Everglades where you can enjoy plenty of outdoor adventures and nature-tripping. The state also boasts of a high number of golf courses.
Are you prepared to retire in Florida?
Florida is no doubt a wonderful place for seniors to spend their retirement years. Along with the amazing community of older adults, you will definitely appreciate the warm weather, natural views, and the laidback lifestyle.
But all these come with a price. Depending on where specifically you choose to live, your social security benefits (which is $27,000) may not be enough to pay for the housing, healthcare, and your daily needs and expenses. You should have an investment portfolio, such as tax-deferred savings account to supplement your financial needs. Take note that housing is going to be your biggest expense, followed by home insurance and healthcare. Planning for these things is important before making the decision to move.
There is no better way to prepare for retirement than to save money as soon as you can. Taking time to plan how you want to spend your retirement is crucial in determining how much you should make before you reach 60.
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