Arizona or Florida: Which Should You Retire In?

The beauty of retirement is that you get to choose where to spend your golden years. For most people, the weather plays a crucial role when picking out a retirement destination; therefore, it is no surprise that Florida and Arizona rank high among the best places for retirees in the US. So, which of the two states should you choose? 

Choosing between Arizona or Florida to retire in boils down to your preferences for the scenery, housing options, and lifestyle you want to lead during retirement. Both states enjoy warm weather even during winters, are tax-friendly for retirees, and have living costs almost par.  

The Grand Canyon State vs. the Sunshine State: An Overview

Arizona, also known as the Grand Canyon State or the Copper state, has the 14th largest population and is the 6th largest state. It is found in the country’s southwestern region and borders New Mexico, Utah, and Nevada, among other states. 

On the other hand, Florida is the most southeastern state of the United States. It also boasts of a large population, ranking third among all fifty states. Florida primarily relies on tourism, which explains the large expatriate population. Further, the state receives thousands of tourists each year, thanks to its warm climate. 

Both Arizona and Florida are favorites for retirees. They offer excellent outdoor activities to keep you occupied, and both have fantastic weather during the winter. Let’s have an in-depth look at how they compare and contrast. 

Weather & Climate

For most retirees, the weather in their dream retirement states influences their choices heavily. After all, your body isn’t what it used to be, and the last thing it needs is a harsh weather season. 

Both Florida and Arizona have fantastic climates, which are mainly warm with some mild winters. Many snowbirds find themselves in these two states as they chase the vibrant winter life in the states. 

During the winters, you’ll get to enjoy some generally warmer weather than in other states, which means you can still go for a grocery run without freezing to death. Besides, you have lower utility bills, seeing as you don’t need to leave your heating system running during this season. 

That said, Arizona’s weather differs slightly from Florida’s. 

Arizona is drier than Florida, recording a maximum of 60 inches of annual rainfall in the mountainous region and only 3 inches in the arid areas. 

On the other hand, Florida is quite humid, making the weather feel hotter than Arizona. Most people find Arizona’s heat more comfortable since it is more of a dry heat than a humid one. 

Florida’s summers can get quite unbearable, thanks to the dangerously high temperatures. Although you can always use an air conditioner to remain comfortable when indoors, getting around during the summer will take some time before you’re used to the heat. 

Another significant difference between the two is that Florida is prone to thunderstorms and hurricanes, thanks to the humid and rainy weather. The thunderstorms are notorious for causing floods, which lead to property destruction and loss of lives in some extreme cases.  

Therefore, if your biggest concern is the weather, you may be better off in Arizona, where there are less thunderstorms, and the heat is more bearable. 

Scenery & Attractions

If you want to spend your retirement years exploring around, you undoubtedly want to settle in a state that has much to offer. On this front, choosing between Florida and Arizona becomes a much easier task. 

Arizona boasts of a unique scenery that attracts thousands of tourists each year. The state is home to the Grand Canyon, which is quite a sight, and you’ll undoubtedly want to tour the place should you retire in Arizona. Additionally, the Grand Canyon state includes some breathtaking sights, including the snow-capped mountains like Humphrey’s Peak and deserts such as the Sonoran Desert. 

Arizona is also home to some spectacular sights such as the Petrified Forest National Park, the Canyon de Chelly full of scenic overlooks, and the Havasu Falls, whose baby blue water is quite stunning. 

Florida has an almost similar scenery throughout the state. The lakes and rivers present all-around play a crucial role in maintaining the Sunshine State’s lush green scenery. Florida is mainly flat, with only the beach to break the monotony of the scenery. 

Still, Florida has enchanting views to offer. Ocean Drive on Miami Beach is one of the best neighborhoods for art deco buildings, and architecture lovers will feel right at home. The Everglades National Park is found in this state and is home to several endangered species. You can also visit the Dry Tortugas National Park for the marine and birdlife in Florida. 

Additionally, Florida is a haven for history lovers. The state is home to the Ancient Spanish Monastery, also dubbed as the biggest jigsaw puzzle in history. 

That said, Arizona is a dream retirement destination for anyone who loves the outdoors. There’s plenty to see, different places to explore, and a variety of breathtaking scenes to keep your days occupied. Be sure to catch the breathtaking sunsets, which are a sight to behold in any part of the state. 

Living Costs

When determining what state to retire to, you need to look at the cost of living index. This estimate will give you a rough idea of how retirement life in the said state will be. 

The national average index is set at 100, which means the further a score is from 100, the more affordable it is to live in the state. 

Both states have their living indices costs higher than the national average at 102.2 and 102.8 for Arizona and Florida. Therefore, retiring in any of these two states will have you spending more than the US’s average retiree. 

A closer look at the costs’ breakdown reveals that retirees in Florida will spend more on groceries, which has an index of 102.8 compared to Arizona’s 96.1. The Sunshine State also has a higher transportation index, although residents get to enjoy lower housing costs. 

In Arizona, health costs are relatively lower than Florida’s, with an index of 95.2. Utilities come in high at 102.7, while the median home cost is $249,300 against the nation’s $231,200. 

Although living in Arizona and Florida can be quite expensive, two of Arizona’s cities made it to the top 10 list for the lowest living cost. A 2020 report by move.org on the US cities with the lowest living costs placed Tucson at fourth place and Mesa at eighth.  

Retirement Income & Sales Taxes

One of your biggest concerns as a retiree is how to cut down costs. After all, there are high chances that you don’t have a regular stream of income as before. Therefore, finding a state where the taxes on retirement income are kept to a minimum becomes crucial. 

Arizona is considered moderately tax-friendly for retirees. The state doesn’t tax Social Security retirement benefits like most US states. However, you are likely going to incur some taxes from the federal government. 

Other forms of retirement income in the state are taxed as regular income. This includes income from retirement savings accounts such as 401(k) and 403(b). Retirees will need to combine this income with that from other sources such as wages to compute the total income. 

The income tax ranges between 2.59% and 4.50% in the state. 

The state’s sales tax rate is 5.6%, with the local sales tax averaging 2.8%. Therefore, a senior living in Arizona will pay an average of 8.4% total sales tax. Although food can be quite expensive in the state, Arizona doesn’t impose taxes on grocery sales and prescription drugs. Additionally, there’s no estate or property tax in the state. 

In terms of income taxes, Florida provides a better option for retirees. The Sunshine State doesn’t impose any income tax on retirees. This means that private and public pensions, IRA income, 401(k) withdrawals, and any other income source remain untaxed. 

The state then imposes higher taxes on certain commodities to cover the deficit. Gas, car registration, and liquor have slightly higher taxes than in other states. Retirees who fall under the high-income bracket still get to save big on the taxes, although low and middle-income earners may have to spend a tad more on their daily needs. 

Housing Options & Property Taxes

You’ll undoubtedly need a place to stay, and two of your options are either to buy or to rent. Your decision on this will depend on the state, city, and taxes imposed on the property in that area. 

Housing Options

Keep in mind that both states are a hotspot for snowbirds. Therefore, you’ll need to book your rental property early in advance so you can get the best prices at the best locations. The snowbird peak season runs from January to March/April in most places. Usually, snowbirds will book the same property for the next year as they leave during spring, while others will start looking in August. 

If you’re looking to own a home in Arizona, your best bet is to start looking in late spring. At this time, most of the snowbirds have left, which means you have a wider variety and less competition. 

However, you can still go window shopping during the summer and fall. Although you’ll probably have fewer options, the remaining sellers will likely be more willing to negotiate the prices.  

Property Taxes

Owning a house in Arizona exposes seniors to the state’s property taxes, which are, thankfully, relatively low. The median annual property tax bill for homeowners is $1578, which is $1000 lower than the national median. 

Additionally, Arizona imposes a property valuation freeze for homeowners whose income is below a specified threshold. The freeze ensures that the property’s value doesn’t increase, thereby reducing the chances of increasing property taxes. 

For a property valuation freeze, the owners must have the property listed as their primary residence and have lived in it for at least two years. An individual homeowner’s income threshold is $38,112, while that owned by two or more people has its income level set at $47,640. 

Baby boomers over the age of 70 years even get to defer their tax payments. By deferring, taxes on the property won’t be due until the retiree sells the house or dies. 

To be eligible for tax deferment, homeowners need to have lived in the house for six years or in Arizona for ten years. Their total taxable income from all sources must also not exceed $10,000. 

Finally, without the estate tax or inheritance tax, retirees can pass on their property to their family without incurring more costs. 

Most local governments in Florida rely on property taxes as their revenue. Surprisingly, the rates aren’t as high as you’d expect and are only slightly shy of the national average. The median value of homes in Florida is $245,100, while the effective property tax rate is 0.83% against the country’s 1.07%

Retirees who are senior residents of the state qualify for homestead exemption for property taxes. They can apply to have $25,000 of their home’s value slashed from property taxes. Non-school property owners whose property’s value is between $50,000 and $75,000 can apply to have a further $25,000 exempted.

Some counties in Florida even offer a $50,000 exemption for baby boomers who are over 65 years. 

Like Arizona, Florida doesn’t impose inheritance or estate tax. 

Retirement Communities

If renting or owning a home in Arizona and Florida isn’t suitable, you’ll need to find some other housing options. Luckily, both states are a popular destination for retirees, which has created a vibrant senior community in both states. 

Arizona was the first state to create an active community for its seniors that were up to modern standards. The state has a large number of adult communities for seniors over the age of 55. If you’re looking to retire in this state, you get to choose from different retirement community options. 

Arizona is home to different assisted living communities. If you wouldn’t want to live independently, this could be an excellent option. Excellent assisted living communities in the state can be found in Phoenix, Tucson, Mesa, and Flagstaff, among other Arizona cities. 

Other retirement community options include memory care, which is ideal for seniors with dementia, nursing homes, and independent living care. Additionally, retirees can sign up for in-home care to still get to live in their homes and access professional care. 

Many of the retirement communities have a bunch of activities lined up for the senior residents. Therefore, you can be sure that you’ll have plenty to keep you occupied, ranging from spa treats to tennis, basketball, and other games. Besides keeping you busy, these activities provide the perfect opportunity to meet and mingle with your fellow retirees. 

Similarly, the senior community in Florida is just as vibrant. The state is home to the most prominent retirement community, popularly known as The Villages. Other senior housing facilities available include adult family care homes, assisted living facilities, and nursing homes. All these options are beneficial if you have trouble getting around or a prevailing medical condition that requires constant attention.

As is the case in Arizona, the planned communities offer different seniors’ activities to meet and interact with others. Depending on the retirement community you choose, you could find yourself mingling with other baby boomers planned outdoor activities, neighborhood walks, and Bingo sessions. 

Entertainment & Recreation Activities

The one thing you cannot run out of after retirement is time, and you’ll undoubtedly want to explore the arts and culture scene of whatever state you retire in. Both Florida and Arizona have plenty of entertainment choices owing to the influx of tourists in these regions during the winter months. 

Golf lovers will be spoilt for choice over the world-class golf courses available in both states. The state of the art golf courses in these two states places them at first and second position for golfiness (the measure of golf courses’ quality and quantity) by Golf.com.

Besides golf, Arizona is also home to a wide range of sports played by professional teams. Soccer fans can spend their days watching their favorite teams such as the Suns, Diamondbacks, and Cardinals. Basketball fans are also not left behind as there are plenty of games to catch. 

Retiring in Arizona also means that you have access to outdoor recreational activities that require the warm sun. If your body is still up for it, you can choose to go hiking or camping. Water and snow skiing are also great activities to keep you on your feet. 

If you’d rather enjoy the nightlife, you can always head down to Las Vegas, which is not that far away from Arizona. Alternatively, the short trip to the warm beaches in the south of California makes up for some time well spent. 

If you do decide to retire in Arizona, be sure to catch the annual state fair. The fair has been held each year since 1946 and brings over 1 million people to the capital. During this time, you’re bound to see Arizona’s beauty in full light as different cultures blend to celebrate the state. 

In Florida, you get almost the same recreational activities. Whether it is summer or winter, you can keep yourself entertained with the numerous outdoor activities. The numerous hiking trails are paradise to an outdoor lover, and we’d especially recommend the Everglades trail for some beautiful scenery along the way. 

Additionally, you can always spend a day on one of the magnificent beaches and get your body tanned. Florida also has a vibrant arts scene and is home to some incredible cultural attractions, including the New World Symphony and Miami City Ballet. If you are an opera lover, the Opera Tampa Orchestra should be on your bucket list. 

Although both states have an incredible entertainment scene, you are far more likely to find various activities in Arizona than Florida. Therefore, if exploring arts & culture is on your to-do list for retirement, you should probably think of retiring to the Grand Canyon State. Besides, the people there are more open and friendly, so you’ll likely have an easier time exploring the state. 

Quality of Healthcare

Your body isn’t in top-notch condition as it was a few years back, so you’re probably going to need more frequent medical attention. Therefore, when deciding where to retire, you need to choose a state that will cater to your medical needs without incurring extravagant costs. 

If you are on prescription drugs, you’ll likely need a refill every so often. Both Florida and Arizona don’t impose sales taxes on prescription drugs so that you won’t incur additional costs there. 

You are probably going to be using Medicare for your healthcare costs. Although the program is nationwide, the quality of service varies by state, and you must confirm the details before moving your entire life there. 

If you’re using Medicare, your best bet would be to live in Florida, ranked fifth in the top states for people on Medicare. Arizona came in 26th, which isn’t exactly bad but isn’t great either. 

That said, Arizona ranks third for the best states for hospital quality. Thanks to the large senior population, the state has invested in quality local hospitals that are well distributed across the state. Seniors also have access to an active lifestyle, which helps to keep them healthy. 

Despite the state having a large senior population, Florida doesn’t rank as high in terms of hospitals’ quality. However, healthcare in the Sunshine State is still a priority. The state boasts of some of the country’s best-ranked hospitals, including the Southwest Florida Lee Memorial Hospital. 

Choosing between the two states based on healthcare quality can be quite the task. However, in Arizona, you have better chances of accessing quality healthcare when an emergency comes up. 

Crime Rates

With such a large population, both states’ crime rates are scaringly high. Although Arizona has a slightly lower crime rate than Florida, it is still relatively high compared to other states. 

Although most places in Arizona are safe to live in, you are likely to hear some cases of organized crime. The most common crimes include burglary, car thefts, and assaults, with a few murder cases here and there. 

The situation is quite similar in Florida. The Sunshine State is a hub for drug dealers, addicts, gangsters, and homeless people, fueling the crime rate increase. Additionally, the beaches are flooded with petty thieves, and it’s not uncommon for people to lose their belongings while tanning on the public beaches. 

The good news is that both Florida and Arizona have plenty of towns that enjoy lower crime rates. Therefore, if you decide to retire in any of these states, do your due diligence so you can find towns where you can live easily without always being on the lookout for criminals. 

Takeaway

Arizona and Florida are popular retirement state options for baby boomers, and it’s quite clear why. They both offer a wide range of activities to keep the retirees busy and get them to interact with each other. The pleasant warm weather in both states ensures that you remain outdoors for most of the year, even during winter. 

The states come quite close to each other in most of the factors outlined above. That said, the slight differences in the income taxes, the scenery, and the entertainment scene could make all the difference for you when choosing the ideal state. 

Sources

• Alamo: Top 10 Most Beautiful Places to Visit in Arizona
• Conde Nast Traveler: The Most Beautiful Places to Visit in Florida
• Move.org: US Cities with the Lowest Cost of Living
• Best Places: Cost of Living in Arizona
• Best Places: Cost of Living in Florida
• Smart asset: Florida Retirement Tax Friendliness
• Smart Asset: Florida Property Tax
• Smart Asset: Arizona Retirement tax Friendliness
• Retirement Living: Arizona Retirement Communities
• Sunlight Living: How Many Villages are in The Villages, Florida?
• Kiplinger: 9 Things you Must Know About Retiring in Arizona
• Leisure Care: 10 tips for Retiring in Arizona
• Yahoo Finance: It’s the Ultimate Retirement Showdown: Arizona vs. Florida
• Sanibel Real Estate Guide: retiring in Florida vs. Arizona
• Sunlight Living: Arizona vs. Florida for Snowbirds
• State of Florida Living: Florida vs. Arizona for Retirement