Is It Cheaper to Retire in Florida or Alabama? Compare Housing, Taxes & More

Is it cheaper to retire in Florida or Alabama? It’s a question many retirees are asking as they consider their options in the Southeast, a region known for its warm climate, affordable living, and tax-friendly policies. Florida has long been considered a top-tier retirement destination, renowned for its year-round sunshine, vast coastline, and numerous 55+ communities.

But Alabama is quickly emerging as a compelling alternative for active adults. With similarly pleasant weather, lower housing costs, and a generous dose of Southern hospitality, Alabama offers a surprisingly rich retirement experience—often without the crowds or high price tags found in its more famous neighbor.

Situated just above Florida’s panhandle, Alabama shares many characteristics with the Sunshine State but also brings its own advantages. By comparing the two in key areas like housing, taxes, and lifestyle, you can better determine which state offers the right balance of value and quality of life.

Let’s begin with one of the most important considerations: housing costs and overall cost of living.

Cost of Living & Housing Affordability

When it comes to overall affordability, Alabama has the advantage over Florida. According to World Population Review, the cost of living in Alabama is about 15% lower than Florida, with housing costs being the most significant difference.

Housing Costs

Florida’s housing market has experienced slight price drops on both the east and west coasts, especially in popular retirement destinations like Sarasota and St. Augustine. As of June 2025, the average cost of a single-family home in Florida was down 2.3%, hovering at about $413,000, according to Redfin. The ongoing demand for housing here keeps the inventory low.

Alabama presents a different picture. As of June 2025, the median sale price of a home was up 2.3%, but that doesn’t mean the home prices are high. The average cost of a home in Alabama is about $300,000, according to Redfin.

While these numbers provide an overview of the entire housing market, 55+ homebuyers may only be interested in the active adult housing market. According to 55places.com data, the median sale price of a home in a 55+ community in Florida is $350,000—lower than the state average for the entire housing market. However, some popular retirement destinations trend a little higher for a home in a 55+ community. For example, the Daytona Beach area is $430,000, the Fort Myers–Naples area is $559,000, and the Jacksonville area is $425,225.

Though Alabama is the cheaper option for housing overall, this data shows that home prices can vary widely by region. It’s important to have a local real estate expert at your disposal when searching for a 55+ home for sale in either Southeastern state.

Additional Costs

Beyond housing, Alabama maintains lower costs across most categories. Groceries, utilities, transportation, and dining out cost less than in Florida. For example, Alabamians pay an average of $272 per month on groceries, while Floridians spend about $324 per month.

Additionally, restaurant meals, entertainment, and services like home maintenance and health care carry lower price tags in Alabama than in Florida. So, is it cheaper to retire in Florida or Alabama? The cost of living numbers point to Alabama as the clear winner, but let’s take a look at a few other factors.

Taxes & Financial Benefits

Florida and Alabama offer attractive tax environments for retirees through different approaches. Consider your retirement income profile: Florida favors those with substantial investment income, while Alabama benefits retirees with moderate incomes who value low property taxes and retirement income deductions.

Income Tax

There’s no state income tax in Florida, meaning that Social Security benefits, pensions, IRA distributions, and investment earnings avoid state taxation. That benefits retirees with substantial retirement accounts or investment income.

Alabama imposes a 2% to 5% income tax rate but offers significant retirement breaks, according to the Alabama Department of Revenue. Social Security benefits are completely exempt, and the state provides generous deductions: $6,000 for individuals ($12,000 for married couples) on pension, IRA, and 401(k) income.

Property Taxes

Florida residency requires living in the state at least 183 days annually. According to SmartAsset, the average effective property tax rate is 0.82%, and homestead exemptions reduce taxable values up to $50,000 for primary residences.

Alabama’s property taxes are among the nation’s lowest. The effective property tax rate is 0.36%, according to Kiplinger. Also, all homeowners 65+ are exempt from the state portion of property taxes.

Inheritance and Sales Taxes

Neither state has inheritance or estate taxes, benefiting wealth preservation and transfer planning. Also, sales tax rates are comparable, with combined state and local rates typically 7%-9% in both states.

Climate & Weather

Both states deliver the warm weather that draws retirees and snowbirds from colder climates, but their climatic personalities differ.

Florida

Florida’s subtropical and tropical climates provide consistent warmth year-round, with winter temperatures rarely dropping below 60 degrees in most retirement-popular areas. The trade-off comes in summer humidity and heat, with temperatures regularly exceeding 90 degrees and humidity levels that can make outdoor activities uncomfortable from June through September. Coastal areas benefit from ocean breezes, but inland communities can experience oppressive summer conditions.

Alabama

Alabama offers a more varied climate that many retirees find appealing. While summers are certainly warm and humid, they’re generally less intense than Florida’s, with more comfortable evening temperatures. Winters are mild rather than warm, with daytime temperatures typically reaching the 50s and 60s, and occasional brief cold snaps that rarely last more than a few days. 

Hurricanes

Hurricane risk affects both states but impacts them differently. Florida faces direct hurricane threats along its Atlantic and Gulf coasts, with inland areas vulnerable to flooding and wind damage. Alabama’s Gulf Coast region faces similar risks, but the state’s inland retirement communities, including Auburn, Huntsville, and areas around Birmingham, are largely protected from direct hurricane impacts.

Lifestyle & Recreation

Florida

Florida’s lifestyle advantages are well-documented and extensive. The state has over 1,000 golf courses, world-class beaches on both coasts, and countless boating and fishing opportunities. Major cities like Tampa, Orlando, and Jacksonville offer professional sports, museums, theaters, and dining scenes that rival those anywhere in the country. 

The sheer scale of Florida’s retirement industry means abundant options for active adult communities, from massive Del Webb developments to intimate resort-style communities.

Alabama

Alabama surprises many with its recreational richness. The state offers excellent golf courses, with many charging $40-$60 for rounds that would cost $80-$120 in Florida. Alabama’s Gulf Coast has beautiful beaches with less crowding, while the state’s numerous lakes and rivers offer fishing, boating, and water sports opportunities.  

Cultural amenities in Alabama are smaller in scale, but accessible and affordable. Cities like Birmingham, Huntsville, and Mobile offer symphony orchestras, art museums, and downtown areas with excellent restaurants. College towns like Auburn and Tuscaloosa provide additional opportunities, including continuing education programs.

Travel

Travel accessibility differs significantly between the states. Florida’s multiple international airports and extensive flight options make it easier to travel domestically and internationally. Alabama’s more limited airport options may require connecting flights for many destinations, though major cities are still well-served for most travel needs.

Health Care Access

So when it comes to health care, is it cheaper to retire in Florida or Alabama? Medical services, prescription medications, and health insurance premiums typically cost less in Alabama than in Florida. The average annual per-capita cost of health care in Alabama is $6,545 per person annually, while Floridians pay $7,676 per person annually.

Florida

Florida’s health care infrastructure is extensive and well-developed, with major medical centers in Tampa, Jacksonville, Miami, and Orlando ranking among the nation’s best. The state’s large retirement population has driven the development of specialized senior services, including hospitals with dedicated geriatric programs and extensive networks of specialists familiar with age-related health concerns. Sarasota, Naples, and St. Augustine have highly-rated medical facilities within reasonable distances.

Alabama

Alabama’s health care landscape is more concentrated. The University of Alabama at Birmingham (UAB) medical system ranks among the top hospitals in the Southeast, while Huntsville, Mobile, and Montgomery facilities provide excellent care. And as you’d expect, cost considerations favor Alabama.

Recommended Florida 55+ Communities

On Top of the World – Ocala, FL

An established, gated community with 10,000 attached and single-family homes, On Top of the World in Central Florida has three 18-hole golf courses, two restaurants, and on-site performance venues. It’s also home to The Ranch Fitness Center and Spa, the Master the Possibilities lifelong learning center, a deli, and an ice cream shop. 

This active adult community has two subdivisions, with homes ranging from 1,000 to over 3,000 square feet. There are over 100 floor plans, many with attached one- or two-car garages.

The Villages – The Villages, FL

The Villages has 70,000 new and resale condos, manufactured, attached, and single-family homes. As one of Florida’s biggest age-restricted active adult communities, this active adult property has 41 executive golf courses, 100 outdoor pools, and 35+ community centers. The Villages also has town squares and its own retail properties.

The single-family homes with attached garages range from 1,157 to 4,705 square feet. Other housing options include cottage-ranch homes, courtyard villas, patio villas, and exclusive designer floor plans.

Oak Run – Ocala, FL

With 3,509 attached and single-family homes, Oak Run is large but considerably smaller than our first two recommendations. This gated community is 30 miles from the Gulf of Mexico and is home to an 18-hole golf course and four clubhouses.

Homebuyers can choose from over 20 floor plans, including ranch duplexes and single-family homes. The duplexes range from 1,049 to 1,489 square feet, while the single-family homes offer 1,112 to 2,275 square feet and attached garages.

Latitude Margaritaville – Daytona Beach, FL

Latitude Margaritaville was completed in 2025 with 3,900 resale attached and single-family homes in one of Florida’s best-loved cities. A gated community, it offers resort-style living with impressive indoor and outdoor amenities. Residents enjoy sports courts, a fabulous outdoor pool, and an indoor fitness center. Additional perks include the Last Mango Theater, a business center, a lively Town Square, and a pet spa.

This community offers 15 floor plans, ranging from 1,210 to 2,564 square feet. All have attached garages, and some have dens.

Stone Creek – Ocala, FL

This age-restricted community is gated, with 3,800 attached and single-family homes. Its star attraction is an 18-hole championship golf course. Other outdoor recreational opportunities include pickleball, tennis, and a fishing lake. Additional noteworthy features of Stone Creek include the Elan Spa & Resort Pool fitness center, and the Reflection Bay social and recreational complex.

Stone Creek’s Twin Villa models are 1,548 and 1,709 square feet, with open concept designs. This community’s single-family floor plans range from 1,133 to 2,634 square feet. Also, all of these lovely homes have attached garages.

Recommended Alabama 55+ Communities

Oyster Bay Village – Gulf Shores, AL

Geared for downsizing and carefree living, Oyster Bay Village has a prime location on Alabama’s Gulf Coast. Completed in 1997, it offers 92 attached homes ranging from 1,343 to 3,192 square feet, with two bedrooms and bathrooms, and one-car garages.

This 55+ community has a welcoming clubhouse with an indoor pool, spa, activity rooms, and outdoor patio. But its biggest draw is its location—the Gulf of Mexico is right across the street. Oyster Bay Village residents have enviable access to boating, sailing, and miles of beaches.

The Village at Craft Farms – Gulf Shores, AL

Located eight miles inland from Oyster Bay Village, The Village at Craft Farms was completed in 2023 with 84 single-family homes. This 55+ property has four floor plans from 1,566 to 1,884 square feet, with attached two-car garages. Features include nine-foot ceilings and a “Smart Home” package with high-tech appliances and security systems.

The Village at Craft Farms offers a clubhouse with an outdoor pool and patio, pickleball courts, and a putting green. Also, homeowners can join the Arnold Palmer-designed Craft Farms Golf Club (for an additional fee). Other amenities include a fitness center and a restaurant/bar.

LiveOak Village – Foley, AL

Foley is about 12 miles north of Gulf Shores and is home to LiveOak Village, a gated active adult community with 359 new and resale single-family residences. These homes range from 1,230 to 2,212 square feet, with attached two-car garages and features like enclosed sunrooms and granite countertops.

The LiveOak Village clubhouse offers a heated indoor pool, a library, and an exercise room. Outside, there are pickleball and tennis courts, a scenic pond, and walking and biking trails.

Leisure Lake – Foley, AL

This second well-priced Foley community has no age restrictions but caters to active adult living. It has 198 single-family homes with attached two-car garages, ranging from 1,208 to 2,437 square feet. These sought-after homes feature covered patios, master suites with walk-in closets, and gourmet kitchens. Also, many have lakefront views.

The Leisure Lake clubhouse has gathering spaces for activities, a heated pool, and pickleball courts. But the star of this show is the eight-acre lake and its community boat launch, gazebo, and fishing pier.

Sea Pines at Bon Secour – Foley, AL

This community isn’t age-restricted, but it’s gated, with plans for 84 attached homes when construction is complete. These sophisticated ranch-style floor plans range from 1,325 to 1,956 square feet, with attached two-car garages. Also, certain models have second floors. You’ll be impressed by the European-style exteriors and upgrades like hardwood floors, Palladian-style windows, and gourmet kitchens.

This upscale property has a 3,000-square-foot clubhouse, an outdoor pool, an exercise room, and a scenic pond. Residents gather at the clubhouse for group activities and make use of its catering kitchen.

Is It Cheaper to Retire in Florida or Alabama?

Bottom line: Alabama typically offers better overall value, delivering comfortable retirement living at lower costs while maintaining warm weather, quality health care, and recreational opportunities. Florida appeals to 55+ homebuyers seeking resort-style amenities and willing to pay more for year-round summer conditions.

Thinking about retiring in Florida or Alabama? Let a local expert at 55places.com help you find the perfect 55+ community for your lifestyle and budget. Contact us today!