The No Income Tax State Retirees Leave Fastest Is the One They Moved to First
Florida collects more retirees than any other state and loses nearly as many, and the math behind that churn reveals something surprising about where the real costs are hiding.
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For a variety of reasons, Florida gets more retirees than any other state and loses nearly as many. In 2025, 45,696 retirees moved in, and 44,881 moved out, for a net gain of just 815. Many leaving are “halfbacks,” retirees who move partway back north to the Carolinas, Tennessee, Georgia, or Virginia. Several factors determine whether Florida becomes a retiree’s final move.
What a Florida Retirement Costs a Couple at 66
The average U.S. household spends $78,535 a year. Florida’s living costs run 103.414, so the adjusted figure comes to about $81,200. Here is how that budget breaks down for a couple who own a home at the state’s $388,000 median sale price outright:
| Line item | Annual |
|---|---|
| Homeowners insurance (statewide average) | $6,408 |
| Property tax (assumed 1.6% of value after the $50,000 exemption for primary homes) | $5,408 |
| Medicare Part B, two people | $4,870 |
| Medigap, Part D, out-of-pocket (assumed) | $6,000 |
| Food, USDA moderate plan, upper end | $10,200 |
| Utilities, vehicles, maintenance, travel, gifts, federal tax, reserves | $48,330 |
Part B costs $202.90 per person per month. The food line uses the top of the $770 to $850 monthly moderate-plan range for two adults. The last row is large because Florida houses age fast, roofs determine insurance availability, and federal tax on IRA withdrawals still applies.
Turning $81,000 Into a Portfolio Target
An aged couple collecting Social Security averages $3,208 a month, or $38,496 a year. The gap comes to $42,720. Covering it at a 4% withdrawal rate takes about $1.07 million. Over 30 years, a 3.5% rate is safer and raises the target to roughly $1.22 million. If the higher earner waits until 70 to claim, the benefit grows 8% for each year past full retirement age, the gap shrinks, and the surviving spouse keeps the larger check. With the 2027 cost-of-living adjustment tracking at 3.3%, a bigger inflation-protected base is worth more.
Why Florida’s Insurance Bill Sends Retirees North
The insurance premium functions as a liability funded from savings. Paying $6,408 a year at a 4% withdrawal rate requires $160,200 of portfolio. The typical U.S. premium of $2,395 requires $59,875. That’s about $100,000 in savings, tied to a single line that keeps rising.
On the tax side, North Carolina charges a flat 3.99% and does not tax Social Security. On this couple’s withdrawals, that comes to about $1,700 before deductions. The rate falls to 3.49% in 2027 and 2.99% in 2028. The insurance difference of roughly $4,000 tops the income tax Florida saves, explaining why halfback moves look reasonable on paper. Florida ranks 4th overall for tax competitiveness but 21st on property tax.
Florida’s Homestead Clock Rewards Staying Put
Time in Florida adds value through the homestead assessment cap. Save Our Homes limits yearly assessed-value increases to 3% or the change in CPI, whichever is lower. Up to $500,000 of that benefit can move with you to another Florida home. It does not cross state lines, so a halfback gives up a decade of capped assessments and pays a second round of selling and moving costs.
The November ballot could make staying more valuable. The proposed amendment would raise the exemption for primary homes from $50,000 to $150,000 in 2027 and then to $250,000 in 2028. School taxes are excluded, and passage requires 60% voter approval.
To qualify, owners must be Florida residents by Dec. 31, 2026. Buyers coming later face a five-year wait. Assuming 10 mills of non-school tax, the extra exemption is worth about $2,000 a year, or $50,000 of portfolio at 4%. That offsets about half the insurance penalty for those already settled in the state.
What It Takes to Make Florida the Final Move
A couple at 66 needs roughly $1.1 million to $1.2 million on top of average Social Security, withdrawn at 3.5% to 4%. Those withdrawal rates generally assume portfolio returns slightly above inflation. Newer, inland construction with wind-mitigation credits, an insurance budget that assumes growth faster than CPI, and an early residence to start the homestead cap shape the math. Florida’s advantage comes from staying long enough for the capped assessment to build, and insurance premiums determine whether a couple can afford to stay that long.
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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.
