Retiring in Florida has long been on the sunny-hued wishlist for many Americans, but do you have enough in your retirement savings to transform this dream into reality? Financial planning isn’t always a day at the beach, but retirement is about more than just surviving; it’s about enjoying the fruits of your labor in your golden years. Without sufficient savings, you might find yourself cutting back on the very things that make retirement enjoyable, which means you may have to reconsider if Florida is in your future.
GOBankingRates recently did a study to discover the minimum savings you need in every state to retire. This was based on several variables including cost of living, Social Security income, healthcare and more. Here are some key takeaways:
The national average Social Security income is $21,567, which is good to know when comparing how far your benefits will get you in Florida.
Though the minimum needed to retire in Florida for 20 years is around $736,588, the study also shows that for 25 years of retirement, you need at least $920,736, and for 30 years, you need more than $1.1 million.
Florida’s average annual cost of living, including total expenditures is $58,396, but is closer to $36,829 after Social Security is factored into the equation.
Social Security and $737K Only Buys You 20 Years of Retirement
So many financial experts and economists float the idea that everyone should have $1 million to retire. Well, if only wishing made it so, everyone would have stacked retirement savings. However, when it comes to brass tax, it’s good to have hard figures to see how far your finances and investments will keep you comfortable upon retirement.
Here are five reasons why you need at least $737,000 in your savings, plus Social Security, to retire in Florida for 20 years.
Rising Housing Costs
Average Annual Housing Cost: $12,557
While Florida can be seen in some areas as an affordable place to live, the reality is that housing costs have been on the rise, particularly in popular retirement destinations. This is a simple case of supply and demand, so whether you’re considering buying a home or renting, you’ll need to budget carefully. GOBankingRates found the average annual housing costs to be around $12,557.
As you age, healthcare inevitably becomes a more significant part of your budget. While Florida is known for its excellent healthcare facilities, especially for seniors, quality care comes with a premium price tag in the United States. Medicare will cover some costs, but out-of-pocket expenses, deductibles, co-pays and services not covered by your coverage can result in looming debt.
Long-term care is another consideration, with the median costs of a private room in a nursing home in Florida reaching thousands of dollars per month. Planning for these expenses is crucial to ensure you won’t run out of money in retirement. Outside of this, GOBankingRates found the average annual cost of housing to be $7,321.
High Grocery and Utility Bills
Average Annual Cost of Groceries: $4,783
Average Annual Cost of Utilities: $4,189
Inflation is a reality that affects all retirees on a fixed income, especially when it comes to necessities such as food, water and electricity. Even with Social Security and a well-planned retirement fund, the rising costs of goods and services can erode your purchasing power over time. GOBankingRates estimates the cost of groceries to be around $4,783 a year and utilities come in at $4,189 annually.
Your Car Is Costing You
Average Annual Cost of Transportation: $4,805
No matter how well you plan, life is full of surprises, and unexpected expenses such as car maintenance or just how much it will take to fill up your tank can be unpredictable. Having a financial cushion or emergency fund beyond your basic living expenses is crucial to ensuring that you can handle these surprises without jeopardizing your retirement security. GOBankingRates discovered that on average Floridians pay about $4,805 each year.
The Cost of Living Before and After Social Security
Average Annual Total Cost of Living: $58,396
Average Annual Total Cost of Living After Social Security: $36,829
Minimum Needed for 20 Years of Retirement: $736,588
Minimum Needed for 25 Years of Retirement: $920,736
Minimum Needed for 20 Years of Retirement: $1,105,989
Florida is a diverse state with a wide range of living costs depending on where you choose to retire. While some areas like Ocala and Lakeland are more affordable, others like Boca Raton, Naples, Miami and the Florida Keys can be prohibitively expensive. In these high-cost areas, you’ll need a larger nest egg to enjoy the amenities and lifestyle that attracted you there in the first place.
Researching the cost of living in different parts of Florida and aligning it with your budget is essential. Social Security benefits are a nice cushion but aren’t sustainable to live off of alone in many areas of Florida.
Final Take To GO
The bottom line is that retiring in Florida can be a dream come true, but it requires careful financial planning and the ability to save now for what you’ll need later. A retirement fund of at least $737,000, supplemented by Social Security, will provide a solid foundation for a comfortable and enjoyable retirement for at least 20 years in the Sunshine State.
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