The Retirees Who Skipped Florida for Delaware Say One Thing Sold Them and It Was Not the Taxes
Thousands of mid-Atlantic retirees are skipping the Sunbelt and staying close to home, and the reason has almost nothing to do with the tax breaks Delaware actually offers them.
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Couples in the Philadelphia suburbs, Baltimore, North Jersey, and Washington face a choice when retiring: Florida or closer to home? More and more are surprisingly choosing Delaware. The senior housing industry calls this the “half-back phenomenon”: retirees who move south and later return partway, or who never leave at all.
Taxes dominate coverage, but the reason that keeps coming up is distance. From much of Delaware, children and grandchildren are a few hours away by car, and weekly babysitting remains possible. What follows is what that choice costs and what it takes to pay for it.
Delaware Costs Less Than Florida by the Government’s Own Yardstick
The Bureau of Economic Analysis places Delaware’s regional price parity at 99.808 and Florida’s at 103.414. On that scale, 100 is the national average. The BLS says the average household spends $78,535 a year. Adjusted for local prices, that comes to about $78,400 in Delaware and $81,200 in Florida. Delaware runs about $2,800 a year cheaper before taxes.
Medicare Part B costs $202.90 per person per month, or about $4,870 a year for a couple. That places the working budget near $83,300 in Delaware and $86,100 in Florida. Housing, food, utilities, and out-of-pocket care are all inside the BLS baseline. Gas is running $4.48 a gallon nationally.
Delaware’s Tax Numbers Look Worse on Paper Than They Are for Retirees
Per-capita state and local taxes adjusted for income are $8,130 in Delaware and $5,110 in Florida. That $3,020 gap nearly wipes out Delaware’s cost-of-living edge. Category rankings tell a different story. In the 2025 State Tax Competitiveness Index, Delaware ranks 1st for property tax and 2nd for sales tax, but falls to 42nd on individual income tax and 50th on corporate tax. The corporate ranking concerns businesses, not households.
Retirees get a break on income tax. Delaware doesn’t tax Social Security, and people age 60 or older can exclude up to $12,500 each in pension and eligible retirement income. A couple drawing about $33,150 from savings has $25,000 excluded, leaving only about $8,150 taxable in Delaware. Florida has no income tax, but homeowners insurance in coastal Florida has become very expensive.
How Much a Delaware Couple Needs Saved
The SSA’s average retired-worker benefit is $2,087.52 a month. For two retired workers, that’s about $50,100 a year. Subtract that from the Delaware budget and savings must cover roughly $33,150 a year. At a 4% withdrawal rate, that takes about $829,000. For Florida, the gap is $36,000, so you’d need about $900,000.
When you claim Social Security, it changes these numbers more than location. Each year you wait past full retirement age of 67 adds 8% to your check, so waiting until 70 means benefits about 24% larger. That reduces the Delaware gap to about $21,100 and savings needed to about $528,000. The 2027 cost-of-living adjustment is on track for 3.3%.
Today’s Real Yields Allow a Higher Safe Withdrawal
The 30-year inflation-protected Treasury yield is 3.22%, and the 10-year is 2.83%. A 30-year ladder of these bonds at 3.22% pays about 5.25% of its starting value each year, with payments increasing with inflation. Covering the $33,150 gap takes about $631,500 instead of $829,000. The ladder runs out in year 30 and leaves nothing for heirs. Many couples split the money, using the ladder for core spending and stock index funds for longevity risk.
What It Takes to Make Delaware Work
A couple with average Social Security benefits needs about $830,000 to fund an average Delaware lifestyle at a 4% withdrawal rate. Using an inflation-protected ladder at today’s real yields brings that to about $630,000. Claiming at 70 brings the 4% target to about $530,000. Delaware and Florida come out close on money alone: Delaware’s lower prices roughly cancel Florida’s lower overall taxes. Delaware’s retiree tax breaks reduce its bill further, and you avoid Florida’s insurance costs. Delaware’s real advantage is proximity to family, which can be the easy deciding factor for any person or couple deciding between the two.
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David Beren has been a Flywheel Publishing contributor since 2022. Writing for 24/7 Wall St. since 2023, David loves to write about topics of all shapes and sizes. As a technology expert, David focuses heavily on consumer electronics brands, automobiles, and general technology. He has previously written for LifeWire, formerly About.com. As a part-time freelance writer, David’s “day job” has been working on and leading social media for multiple Fortune 100 brands. David loves the flexibility of this field and its ability to reach customers exactly where they like to spend their time. Additionally, David previously published his own blog, TmoNews.com, which reached 3 million readers in its first year. In addition to freelance and social media work, David loves to spend time with his family and children and relive the glory days of video game consoles by playing any retro game console he can get his hands on.
