Florida’s warm weather, beautiful beaches, and low taxes have made it a dream destination for many Americans to retire.
The state was once the ideal place to live out one’s golden years. However, that thought is now becoming out of reach for retirees.
Since remote workers and the wealthy started flocking to the state, they drove up home prices. Consequently, those on a fixed income are left to feel the pinch.
A recent analysis from retirement experts found some people are rethinking the Sunshine State as the go-to retirement destination. According to reports, the cost of housing in Florida has skyrocketed, with a median home value of nearly $393,000.
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In just half a decade, the median price of a single-family house in Florida rose $150,000, or 60%. According to Redfin, the average cost of a home in March 2018 was approximately $250,000. In March 2023, it was roughly $400,000.
“It used to be that people could retire in Florida and get a beautiful home for a fairly inexpensive price compared to other states. Now it’s not as competitive as it used to be, so that makes it more difficult to retire to the home that they want to be in,” said Dave Duquette, president of Impact Wealth Advisors.
Aside from the skyrocketing costs of houses, retirement experts say the state’s ongoing insurance crisis is also driving retirees out. Hence, they’re finding more affordable places to call home. However, no matter where you live, one of the mistakes people make is their savings percentage for retirement.
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“We teach them how to save more than 5%. We want to focus on trying to save at least 20% of gross income and helping them diversify where that’s going. Not all into a vehicle like a traditional 401K,” Duquette said.
However, contrary to public opinion, expensive housing isn’t the only thing repelling retirees from the state. Inflation and stock market dips have also negatively impacted their financial situation.
Consequently, seniors are seeking more affordable places to call home. For example, many are moving to Limestone County, Alabama, the fastest-growing county in the state. The area boasts lakefront property, warm weather, and low property taxes. Hence, it only makes sense that they consider it a substitute for The Sunshine State.
In addition, retirement experts suggest that people nearing retirement should choose a less traditional region to reside in post-work. States like Alabama, Wyoming, and South Carolina are becoming more attractive retirement destinations.
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However, at the top of the list are towns like Sequim, Washington; Linden, Michigan; and Thermopolis, Wyoming. These towns offer perks like more affordable housing, favorable tax treatment, and proximity to major metros.
However, experts advise that no matter where seniors live, there are certain things they should do with their money—for example, setting money aside to invest. They also advise seniors to set aside money for emergencies, maintain an up-to-date estate plan, and stay (or become) debt-free. That way, their cash stretches further, and they feel more secure.
Recently, Florida made WalletHub’s top 10 cheapest states to retire in. However, it did so by the skin of its teeth, ranking ninth out of 10. Alabama reigned supreme in price but lagged regarding quality of life and health care.
Hence, Florida remains a hot destination for retirees who may prioritize such factors over affordability.
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