Here’s Exactly How Much Money You Need To Retire in Florida

Many dream of retiring to a tropical paradise like Florida when their working days are done. But how much money does it take to make that dream a reality?

We’ll explore how much money you need to spend your golden years in the Sunshine State. For consistency, we’ll assume a retirement age of 65 years and a retirement period of 18 years. If you want to retire early, you’ll need even more money.

Overall, the cost of living in Florida is about 1% higher than the national average. However, this number masks a wide range of affordability that Florida cities offer.

The cost of living in touristy areas, such as Miami and Orlando, is higher than the U.S. average, while beautiful locations like Pensacola and Tallahassee are cheaper, making it easier to keep more money in the bank when you retire.

The median household retirement income in the United States is $50,290 per year, or about $4,190 each month. Does this match the income level of other Florida retirees? It depends greatly on where in Florida you live.

For instance, in the Miami-Dade County area, the median retirement income is much less, at $33,686 per year. But in Collier County on the Gulf Coast, that number jumps to $74,313.

According to data from the Missouri Economic Research and Information Center, Florida ranks 30th among the U.S. states and Washington, D.C., for affordable cost of living in 2023.

However, Florida’s index is 101, which is just one point above the U.S. average of 100, so it’s not much more expensive than average.

The median Florida home price in 2022 was $414,000, slightly below the U.S. median of $457,475. 

However, the range of home prices throughout the Sunshine State is broad, from $265,000 in Hendry County in the middle of the state to $472,000 in Collier County on the Gulf of Mexico.

If you’re choosing to rent in retirement, know that leases in Florida tend to be on the pricier side. For example, a one-bedroom apartment in Broward County (Ft. Lauderdale area) costs anywhere from $1,000 to over $1,800 per month. 

In less retirement-oriented areas, like Tallahassee, renting the same size apartment is usually less than $1,000 per month.

As far as food expenses go in the United States, Florida is in the middle of the pack. The average monthly cost of groceries in the U.S. is about $415 per person, and it’s about $444 in Florida. 

While this is slightly higher than the average, it’s nowhere near the price extremes in Hawaii ($638 per month) or Wyoming ($336).

Gasoline seems expensive everywhere, but slightly less so in Florida. As of November 2023, Floridians pay about $3.04 per gallon of gas. While this isn’t as cheap as most other southern states, it is $0.25 less than the national average.

The average price of a one- to five-year-old used car in the U.S. is about $33,582. You can expect to pay around $34,519 for the same vehicle in Florida, or about $1,000 more.

If you want to buy a new car, Florida is the place to do it. It’s regarded as one of the best states for getting a great deal on a new vehicle. Just know you’ll have to pay a 6% sales tax on your purchase.

Florida has a reputation for a high cost of health care, especially for employer-sponsored plans. However, many retirees will use Medicare for insurance, which could reduce this otherwise expensive budget item.

However, Medicare expenditures per beneficiary were highest in Florida, so retirees should thoroughly understand their health insurance to know what health care costs they could incur.

Some may see retirement as the absence of a job, but the truth is that a quarter of people ages 65-74 are still working in some capacity. Furthermore, if one spouse wants to retire early and the other is still working, wage levels are still relevant in retirement.

With this in mind, it’s important to know that Florida wages are lower than the U.S. average. Only Miami-Dade County has wages above the national weekly average of $1,334; the rest of Florida’s counties lag behind.

In a hot, humid state like Florida, it’s no surprise that the energy bill tends to be high, around $130 per month. However, other utilities like water and internet tend to be less than in other places.

While the price of vehicles might be reasonable in Florida, car insurance is high. Full coverage auto insurance costs 37% more, and liability coverage costs 45% more than the national average.

Homeowners don’t fare any better than drivers. Florida is the most expensive state for homeowner’s insurance. Residents paid an average of $7,722 in annual premiums in 2022, more than four times the national average of $1,700.

Besides the beaches and theme parks, one of the most attractive things about Florida is its lack of state income tax. 

While many retirees aren’t relying on a salary, it’s important to note that 401(k) withdrawals are taxed as income, so Florida’s tax structure can save you money even if you’re not bringing home a paycheck.

The state sales tax plus the local tax make a combined sales tax rate of 7.02%, which is in the middle of the pack of states.

If you want to be close to balmy beaches in retirement, cities like Daytona Beach, Jacksonville, and Pensacola offer affordable options.

If you want to avoid the coasts for fewer interactions with tourists and hurricanes, cities like Lakeland, The Villages, and Ocala may suit you better.

According to MIT’s living wage calculator, a family of two retirees without dependents would need $57,628 annually to have a living wage in Florida. 

This depends on your location within Florida. For instance, living in Miami is much pricier than in Pensacola. 

Your spending needs and habits will also play a role in determining what you’ll need to retire comfortably. But if you need $57,628 on average for 18 years, you'll need to have $1,037,304.

As far as retirement locations go, Florida has a lot going for it: mild temperatures, lots of activities, sandy beaches, and no state income tax. 

However, by many measures, the cost of living in Florida is higher than in many other U.S. states. And not paying attention to the cost of living in retirement is how seniors waste money.

It’s important to remember that the cost of living data is based on averages and may not predict whether you can make ends meet if you retire in the Sunshine State.