If you hope to spend your golden years in Florida, you’re not alone. A WalletHub survey ranked Florida as the best state for retirement. The absence of estate, inheritance, and income taxes combined with the lower costs of services like health care and homemaker services reduce living costs substantially. The Sunshine State is also home to thousands of 55+ communities that cater to the needs of active adults. But how much does it cost to retire in Florida?
If you’re dreaming of retirement in Florida, you need to know if it’s within your financial reach. Here, we’ll outline the basic expenses of living in a Florida 55+ community and offer a cost breakdown to help you determine how much money you’ll need to enjoy retirement in Florida.
How Much Money Do You Need to Retire in Florida?
While various retirement lifestyles can lead to drastically different spending habits, understanding average living costs can help you determine the budget you’ll need. The average cost of living in an age-restricted community is between $1,500 and $4,000 per month. These costs cover your mortgage, homeowners’ association (HOA) fees, onsite amenities, security services, and other expenses. However, you’ll also need to account for other expenses like groceries, utilities, and taxes.
When you add up all the basic costs of living to retire in Florida, you can expect to need an average of $3,200 a month for living expenses in an average home or condo in one of Florida’s best 55+ communities. However, if you choose a more luxurious home, living expenses could easily surpass $8,500. You’ll also need to factor in costs for transportation, health care, entertainment, and recreation.
Here’s the breakdown to help you answer the question “How much does it cost to retire in Florida?”
Mortgage
The cost of purchasing a home in a 55+ community is usually about the same as purchasing a home in any planned community. The prices can vary widely, depending on your location, community amenities, and the type of home you choose. The following monthly mortgages are calculated using a 30-year fixed-rate mortgage with 7% interest and a 20% down payment.
- $130,000, two-bed, one-bath condo in Leisureville (Pompano Beach): $691 monthly
- $250,000, two-bed, two-bath condo in Kings Point (Sun City Center): $1,330.60 monthly
- $329,000, three-bed, two-bath single family residence in Stone Creek (Ocala): $1,751.08 monthly
- $1,049,000 three-bed, two-bath single-family residence in The Villages: $5,583.22 monthly
HOA Fees
While you can expect HOA fees in any planned community, they can vary widely. It’s also worth noting that HOA fees aren’t aligned with mortgage costs. For example, a $125,000 condo in Lime Bay has a $530 HOA fee, while a three-bed, two-bath $1,049,000 home in The Villages has a $195 HOA fee. Since HOA fees can vary from less than $200 to over $700, it’s essential to ask what they cover and how often they’re collected. While some are monthly payments, others are quarterly.
Amenities
Active retirement communities typically come with a variety of onsite recreation opportunities. These can range from pools and lounges to golf courses, lakes, and miles of bike and hiking trails. These amenities may be included in the cost of the home or HOA fees or may require added membership fees.
Home Insurance
According to MarketWatch, the average cost of home insurance in Florida is $3,391 annually or about $283 per month for $350,000 in dwelling coverage with a deductible of $1,000. However, it’s crucial to understand that costs can stray far from average in the southern part of the state. Due to the prevalence of hurricanes, premiums in Southern Florida average closer to $6,000 per year or $500 monthly. It’s also worth noting that $350,000 dwelling coverage is not nearly enough coverage for a $500,000 or a $1,000,000 home.
Utilities
The combined costs of various utilities can quickly add up, cutting into your monthly budget if you forget to make accurate plans. Utility costs in Florida typically include:
- Electricity: $130 average monthly
- Gas: $136 average monthly (Some homes may not have gas but will likely have slightly higher electrical costs as a result.)
- Cable & Internet: $111 average monthly
- Water: $34 average monthly
Groceries
When planning for retirement, soaring grocery costs and price variances from state to state are easy to overlook. However, forgetting to budget for these expenses can leave you sorely underfunded. Florida is the fifth most expensive state in the nation to buy groceries, with households without children spending an average of $287.27 a week or $1,149.08 monthly.
Taxes
The median effective real estate tax rate in Florida is 83%. The median cost of taxes for homeowners is $2,616 annually. While 83% isn’t among the lowest rates in the country, it’s significantly less expensive than New Jersey’s whopping 2.3% rate. The amount of taxes you’ll pay will depend on factors like your home’s age and value.
For example, a two-bed, two-bath $314,247 home in The Villages has a tax rate of $1,705.64 ($142 monthly). A three-bed, two-bath $1,049,000 home in the same community has a $3,818.66 tax bill ($318 monthly). A two-bed, two-bath $155,000 condo in Leisureville built in 1969 has a $407 tax bill ($34 monthly). A three-bed, three-bath $579,900 single-family residence built in 2021 in On Top of the World has a $4,802 annual tax bill ($400 monthly).
Finding Your Ideal 55+ Community to Retire in Florida
At the end of the day, planning for retirement isn’t about a magic monetary value in your bank account, it’s about creating a strategy that allows you to enjoy your retirement without financial stress. For many retirees, the average cost of living in Florida is achievable.
Finding the right 55+ community can help you maximize your budget and find the retirement lifestyle you’ll enjoy. If you’re looking for the ideal place to retire in Florida, the real estate experts at 55places.com can help. Reach out to us today to learn more about how we can help you find your ideal 55+ community.
