Retirement Challenges Drive Americans to Florida Despite Rising Costs
Americans anticipate outliving their retirement savings by a decade. A whole decade. According to a new survey report by the nonprofit Transamerica Center for Retirement Studies® (TCRS) in collaboration with Transamerica Institute®, only 17% of Americans are confident that they can maintain a comfortable lifestyle in their retirement. Meanwhile, an alarming 50% express concerns about the possibility of outliving their savings. The apprehension intensifies with the fear that Social Security benefits may diminish or vanish altogether in the years to come. While it's not entirely accurate, it's worth noting that some of these concerns, to a certain extent, are grounded in plausible considerations.
This is because, over the years, Americans have been having fewer children and enjoying longer lifespans. This has led to an aging population, with baby boomers now officially entering the Peak 65 period — the phase where they are reaching the age of 65 at a rate unprecedented in history. Since there is a lower working population to support these aging boomers, Social Security funds are projected to deplete as well. When is that going to happen? Also within a decade. That's right: 2034 is the year retirees may get fewer benefits than they're entitled to.
This has led to a growing trend, driven by both the lack of substantial retirement savings among Americans and the aforementioned reason, where more and more individuals are opting to move to more affordable places to retire. As such, an increasing number of potential retirees are showing interest in the Sunshine State of Florida. According to a study by U-Haul Holding Company (NYSE:UHAL), Florida was the second most popular destination to move to in the year 2022. The state took the same spot in 2023 as well, leveraging on factors such as low cost of living, lack of taxes on retirement income, and sunny weather.
"There are many other reasons why people are coming to Florida and have come in previous years. We have a lower cost (of living) than other states. There is no state income tax – that's a huge factor. The warm weather. Basically, we have summer weather all year long. Attractions. Our beaches. The activities. There's just so much to do”.
Last year, Redfin Corporation (NASDAQ:RDFN) conducted a similar study to assess migration and relocation trends. Based on the searches of more than two million Redfin Corporation (NASDAQ:RDFN).com users, the study reveals that 26% of homebuyers are looking to move to a different part of the country, up from 24% a year ago. Even though these migration trends aren't shocking, what is surprising is that these homebuyers are looking to move to affordable areas that come with increased climatic risks. For example, Las Vegas and Sacramento face severe heat risk, Tampa and Cape Coral have an extreme risk of flooding, while places like Orlando and North Port Sarasota have extreme wind and hurricane risk, notes Redfin Corporation (NASDAQ:RDFN).
Considering these risks, these may be some of the worst places to retire in Florida, yet homebuyers looking to move here are lured by lower-than-median home prices. As the Sunshine State continues to attract retirees and individuals alike, the growing influx of people has gradually elevated the cost of living and reduced housing affordability in various areas across Florida. Many cities are not as cheap as they once used to be, which is why retirees are fleeing Florida instead.
13 Florida Cities That Are Getting Too Expensive for Retirees, bolt, night, thunderstorm, thunder, weather, lightning, danger, rain, electric, urban, flash, building, dark, city, blue, sky, nature
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Methodology
To compile the list of Florida cities that are getting too expensive for retirees, we have ranked the most expensive cities as reported by Finance Buzz, Go Banking, and Business Insider, to name a few. Next, we ranked these Florida cities based on their cost of living index, as well as their 1-year and 5–year percentage changes in median home prices. Scoring on these factors, we summed up individual scores to generate a unique Insider Monkeys score. Places were then ranked in ascending order from the lowest to the highest scores.
By the way, Insider Monkey is an investing website that tracks the movements of corporate insiders and hedge funds. By using a similar consensus approach, we identify the best stock picks of more than 900 hedge funds investing in US stocks. The top 10 consensus stock picks of hedge funds outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). Whether you are a beginner investor or a professional one looking for the best stocks to buy, you can benefit from the wisdom of hedge funds and corporate insiders.
Here are the Florida Cities That Are Getting Too Expensive for Retirees:
13. Orlando
Insider Monkey Score: 20
Median Home Price: $369,000
1-Year Percentage Change: 7.6%
5-Year Percentage Change: 53.75%
Cost of Living Index: 106
Contemplating a move to Orlando with Disney World in mind may indeed be enticing, especially considering the added joy it would bring to visits from your grandkids. However, Orlando is indeed getting expensive for the average retiree. The cost of living is now 6% higher than the national average, and the median home price has witnessed a 7.6% hike since last year. Back in January 2019, the median home price of a home in Orlando stood at $240,000 only, signifying a 54% percentage increase. According to the Redfin database, over 34% of homebuyers in Orlando searched to move out of the area between November 2023 to January 2024.
12. Tarpon Springs
Insider Monkey Score: 20
Median Home Price: $440,000
1-Year Percentage Change: 11.4%
5-Year Percentage Change: 56.02%
Cost of Living Index: 102.8
Tarpon Springs may be beautiful; full of charm and culture, but it's number 12 on our list of Florida cities that are getting too expensive for retirees. Over the past year, median home prices in the area have experienced a notable increase of 11.4%. Considering the broader picture, the 5-year percentage change reveals a growth of 56%. Between the period November 2023 to January 2024, 30% of homebuyers searched to move out of the area. Sarasota has been the most popular destination for those looking to move out of the area.
11. Boca Raton
Insider Monkey Score: 26
Median Home Price: $629,000
1-Year Percentage Change: 1.1%
5-Year Percentage Change: 44.12%
Cost of Living Index: 114.1
While Boca Raton experienced only a 1.1% percentage change in median home price since last year, it is still getting expensive for retirees considering its high cost of living and long-term price hike in home prices. The cost of living in Boca Raton is 14.1% higher than the national average. Moreover, the area has experienced a 44% price hike in home prices over 5 years. In Nov '23 - Jan '24, 26% of homebuyers searched to move out of the area, with Cape Coral being the most popular destination they were looking to move to.
10. Tampa
Insider Monkey Score: 28
Median Home Price: $391,000
1-Year Percentage Change: 0.5%
5-Year Percentage Change: 34.87%
Cost of Living Index: 104.2
Next on our list of Florida cities that are getting too expensive for retirees is Tampa. Even though the city is still comparatively affordable for the average retiree as compared to other places in the Sunshine State, retirees are still complaining that it's not as affordable as it once used to be. The cost of living in the city is now 4.2% higher than the national average, while the median home price has increased by 35% over five years.
9. Naples
Insider Monkey Score: 30
Median Home Price: $780,000
1-Year Percentage Change: 4%
5-Year Percentage Change: 53.84%
Cost of Living Index: 113
Naples is no longer the affordable retirement haven it once used to be. Over 5 years, the median price of a home in Naples has witnessed a spike of 54%. Moreover, the cost of living in the city is now 13% higher than the national average. During the period between Nov '23 - and Jan '24, 39% of Naples homebuyers searched to move out of the area. The most popular destination for these homebuyers was Sarasota, followed by Knoxville and Jacksonville.
8. Miami
Insider Monkey Score: 35
Median Home Price: $599,000
1-Year Percentage Change: 13%
5-Year Percentage Change: 55.62%
Cost of Living Index: 118.9
Those retirees thinking of flocking to Miami for their golden years should think again. Miami is one of the top SouthFlorida cities that are getting too expensive for retirees. The primary reason an average retiree may not be able to live a comfortable life in the city is its high cost of living, which is an estimated 19% higher than the national average. Median home prices have also spiked considerably in the past year as well as over 5 years.
7. Weston
Insider Monkey Score: 35
Median Home Price: $765,000
1-Year Percentage Change: 23.4%
5-Year Percentage Change: 82.14%
Cost of Living Index: 110.5
Weston is another Florida city that is getting quite expensive for retirees. This city has experienced one of the most substantial increases in home prices, evident over both a one-year and five-year period. The cost of living is also 10.5% higher than the national average. In Nov '23 - Jan '24, 26% of Weston homebuyers searched to move out of Weston, and Cape Coral is the most popular destination they are looking to move to.
6. Palm Harbor
Insider Monkey Score: 35
Median Home Price: $445,000
1-Year Percentage Change: 48.8%
5-Year Percentage Change: 39.1%
Cost of Living Index: 102.8
Next up on our list of Florida cities that are getting too expensive for retirees is Palm Harbor. The cost of living in this picturesque locale has steadily risen, posing a financial challenge for those seeking a tranquil retirement. Today, it stands 2.8% higher than the national average. The allure of Palm Harbor's scenic beauty and amenities now comes at a premium, making it a less affordable option for retirees compared to previous times.
