Florida is considered by many to be the quintessential retirement state but experts suggest it may not be the best place to pitch up for your later years.

While its weather and access to the coast is desirable, it is especially vulnerable to natural disasters like hurricanes, meaning its home insurance premiums are more expensive than anywhere else in the country.

Homeowners paid an average annual premium of $7,788 in 2022, according to insurance agency Insurify – almost five times the national average of $1,636.

And even though the Sunshine State state imposes no income tax, citizens may see themselves being taxed in other ways even less friendly to retirees – including on purchases and on their homes. 

With good weather for much of the year and access to the coast, Florida has become known as the quintessential retirement state

With good weather for much of the year and access to the coast, Florida has become known as the quintessential retirement state

With good weather for much of the year and access to the coast, Florida has become known as the quintessential retirement state

Florida homeowners paid an average annual premium of $7,788 in 2022, making it the country's most expensive state for home insurance. Pictured: The aftermath of Hurricane Michael in 2018

Florida homeowners paid an average annual premium of $7,788 in 2022, making it the country's most expensive state for home insurance. Pictured: The aftermath of Hurricane Michael in 2018

Florida homeowners paid an average annual premium of $7,788 in 2022, making it the country’s most expensive state for home insurance. Pictured: The aftermath of Hurricane Michael in 2018

‘Florida is prone to natural disasters, particularly hurricanes,’ John Grace, president and founder of Investor’s Advantage Corp, told GoBankingRates.

‘While homeowner’s insurance is essential, premiums in Florida can be substantially higher due to the increased risk of hurricane damage. Retirees should carefully consider these insurance costs in their financial planning,’ he added.

‘Moreover, climate change could exacerbate these risks in the future, potentially leading to even higher insurance costs and property damage concerns.’    

In July, former President Donald Trump called out Florida governor Ron DeSantis, his rival for the upcoming Republican presidential nomination, for failing to take action to mitigate the cost of expensive home insurance in his state.

‘We want him to get home and take care of insurance, because you have the highest insurance in the nation,’ Trump said at the time.

Days prior, national insurer Farmers Insurance said it will no longer offer insurance plans in Florida.

Not only are houses in Florida more expensive to insure, their value is notoriously volatile. That could cause problems for retirees that have more wealth tied up in property.

‘Florida’s real estate market can be volatile, with property values fluctuating dramatically,’ finance expert Mark Smith told GoBankingRates.

‘This volatility can affect your long-term financial stability, especially if you rely on real estate investments as part of your retirement strategy,’ he added. 

While Florida has no state income tax, it relies heavily on sales tax and property taxes to generate revenue. Pictured is a Florida rental vacation home

While Florida has no state income tax, it relies heavily on sales tax and property taxes to generate revenue. Pictured is a Florida rental vacation home

While Florida has no state income tax, it relies heavily on sales tax and property taxes to generate revenue. Pictured is a Florida rental vacation home

Damaged property after the arrival of Hurricane Idalia in Horseshoe Beach, Florida, in August

Damaged property after the arrival of Hurricane Idalia in Horseshoe Beach, Florida, in August

Damaged property after the arrival of Hurricane Idalia in Horseshoe Beach, Florida, in August

Part of Florida’s allure to many lies in its laid back approach to taxation.

But although it has no state income tax, Grace suggested it may not actually be cheaper overall.

‘Some counties in Florida have high property tax rates, especially in desirable retirement communities,’ he said.

With an effective property tax rate of 0.91 percent, it has the 26th largest property tax as a percentage of housing value of all the states, according to Tax Foundation.

‘Retirees should research property tax rates and sales tax implications in their desired Florida retirement location to ensure it aligns with their budget,’ he added.

Florida has an average combined state and local sales tax rate of around 7 percent, which complements its big tourism industry. 

Retirement experts suggest therefore that for some other states may be more desirable retirement destinations.

Grace suggested retirees should consider states like Colorado, Texas or Nevada.

‘Colorado offers a wide range of outdoor activities,’ he said. ‘It also boasts a relatively low property tax rate, and many cities provide a mix of cultural amenities and recreational opportunities.’

Like Florida, Texas has no state income tax.

‘Cities like Austin, Houston, and Dallas offer diverse cultural scenes, and the cost of living can be relatively lower compared to other major metropolitan areas,’ he said.

It comes as a study by Bankrate this year found that Florida was no longer the best state in which to spend your twilight years, with Iowa taking over the top spot

It marked a significant change from the 2022 ranking. This year, Florida plummeted from first place to eighth in the best retirement hotspots. 

Bankrate ranked all 50 states on affordability, overall well-being, quality and cost of healthcare, weather and crime

Bankrate ranked all 50 states on affordability, overall well-being, quality and cost of healthcare, weather and crime

Bankrate ranked all 50 states on affordability, overall well-being, quality and cost of healthcare, weather and crime

Iowa was ranked as the best state to retire due to its reasonable cost of living, affordable but high quality healthcare, and low crime levels

Iowa was ranked as the best state to retire due to its reasonable cost of living, affordable but high quality healthcare, and low crime levels

Iowa was ranked as the best state to retire due to its reasonable cost of living, affordable but high quality healthcare, and low crime levels

The annual retirement study considered affordability, overall well-being, quality and cost of healthcare, weather and crime. 

While the weather in Iowa is colder than in Florida, the Hawkeye State is the sixth cheapest place to live in the US, according to the Council for Community and Economic Research, making it an attractive home for retirees looking to stretch their fixed income in the current economy.

Lower housing costs also helped prop the state up when it came to affordability, Bankrate said, and the price of homeowners insurance is below the national average. 

According to data from real estate company Redfin, the average home price in Iowa is $239,000 – well below the nationwide typical home price of $388,800.

While the state lands near the middle of the pack when it comes to taxes, it topped the ranking for high-quality healthcare services and low healthcare costs.

Plus, nearly 20 percent of the population in Iowa is aged 65 and older, according to Census data, making it easier for retirees to meet others of a similar age. 

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