Arizona ranks among the top 10 states with a growing population, and many of its new residents are retirees. The climate is warm and dry, and the lifestyle is easy.
But before you pack up the moving van, here are some things — good and bad — that you might want to consider before moving to the state. Being well-informed now may help you avoid wasting money later.
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1. There are plenty of retirees in Arizona
One of the biggest reasons people are moving to Arizona is because they're retiring. So you won’t be alone when you move to the state to start your post-work life.
In fact, 34.5% of people surveyed by moving company United Van Lines said retirement was the main reason for their move to Arizona, beating out family needs or job changes.
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2. It doesn’t tax Social Security
You may want to consider Arizona for retirement because the state doesn’t tax Social Security income.
However, you will want to factor in other taxes when considering whether to move to Arizona. You might have to pay state income taxes, which could include income from your 401(k) retirement account and property taxes.
Arizona also has a 5.6% state sales tax and an average combined state and local sales tax rate of 8.38%. That sales tax puts it at the higher end of sales tax rates in the U.S.
3. Housing prices are going up
Housing prices have gone up, with a median sale price of $438,700 for the state in August. This is higher than a year ago, according to the real estate website Redfin.
Cities are relatively in line with the state average if you’re concerned about higher living costs in more populated areas.
For example, in August, both Phoenix and Tempe had a median sale price of $450,000.
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4. It’s hot, but it’s a dry heat
Arizona can get hot, particularly in the summer, with temperatures above 100 degrees many days. But those temperatures can vary depending on where you live.
For example, Phoenix's average high temperature in July is 106 degrees, while Flagstaff, at an elevation of 6,909 feet, has an average high of 81 degrees that month.
But Arizona doesn’t have much humidity, which can make those hotter days a little more pleasant and less muggy. Florida, on the other hand, can have high humidity every day from June to August.
5. Retirees can find plenty of activities
Arizona can be a great state if you want to be active in retirement.
The state is well known for Grand Canyon National Park, which is good for a short trip to see this natural wonder. You can also spend several days hiking, camping, or participating in other outdoor activities.
And there are plenty of golf courses to check out if you prefer to play golf. Arizona is home to more than 300 courses for you to choose from.
6. You’ll need a car
Arizona is not like living in Chicago or New York when it comes to public transportation. There is some public transportation, but not enough to rely on it to get you from place to place.
Instead, you’ll have to rely on your car to get to most places, mainly because of the sprawl of some of the bigger cities. So factor in the costs of owning and maintaining a car when you put together your estimated retirement budget if you decide to move to Arizona.
Make Money: 8 things to do if you're barely scraping by financially 7. Arizona has a thriving art scene
Arizona may be the place for you if you plan to pursue art as a hobby or side hustle when you retire. The state has plenty of options to display your wares depending on where you settle down.
In fact, with so many retirees, you may want to consider finding a 55+ community in Arizona with space dedicated to your arts and crafts plans.
8. There’s a water shortage
One of the most significant issues facing Arizona right now is a drought, which is affecting the state's water supply.
Because you live in the desert, you have to drink more water. However, the water shortage can also affect issues such as owning a pool or the kind of landscaping you choose.
Many communities require plants that require little to no water or have restricted hours when you can water your landscape.
9. Arizona has a diverse population
Consider moving to Arizona if you like the idea of living among a diverse group of people. The state has a large Spanish-speaking population, with just over 20% of residents speaking Spanish.
It also has a rich Native American heritage with a large population of Native American tribes, including the Navajo Nation and Hopi Tribe.
Avoid these money mistakes: 9 dumbest things smart people waste money on 10. You have to deal with dust
Arizona is a wonderful option if you have seasonal allergies in a state with seasons. But Arizona has its own weather problems: haboobs.
A haboob is a dust storm that sweeps across the desert and occurs frequently in Arizona. While you may not be sneezing and coughing in the spring due to pollen, you may have to learn to live with dust and sand suddenly enveloping your neighborhood.
Bottom line
Before you start thinking about where you want to live when you retire, you should figure out how much you’ll need to retire. Then, it would be best to compare the cost of living where you currently live with that of your desired location in Arizona.
If you move to a different location, you may be surprised by the change in the cost of living.
And if you find you can retire early , be sure your savings will cover a longer retirement.
Money tips that can work for everyone
No matter what your bank account balance is, there's always an opportunity to optimize and improve your finances. Here's a quick checklist of things you can look at today.
Focus on paying off your debt. Debt can hold you back from making progress with your overall financial well-being. Aside from cutting expenses, there are tools that can help you pay off debt faster like balance transfer credit cards and debt counseling.
Earning extra income can give you breathing room. If finances are tight, earning some extra money to supplement your income can make a huge difference. A new job is one option to consider, but if you're not ready to make a big change or already retired, a part-time side job could be a better choice.
Cut your expenses. It sounds painful and so not fun, but it doesn't have to be. Take a look at your biggest expenses because that's where you'll probably find the biggest savings. For example, auto insurance rates have been soaring so shopping around for a new insurance company can be the fastest way to cut your bill. Also, look for ways to cut your grocery bill (despite rising inflation).
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