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Wednesday, May 31, 2023

Florida Too Expensive to Retire? Try Alabama

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Florida Too Expensive to Retire? Try Alabama

Glance at the list of states most popular for retirement in the US and Florida will probably be at the top. In one poll, 39% of Floridians cited retirement as their reason for moving to the Sunshine State. That reason was higher than any state on the list, with South Carolina a close second. People like the warm weather, the abundant coastline, and the lack of state income taxes.

But all that attention from retirees is causing another problem: lack of housing and high demand equal skyrocketing home prices and cost of living. When a state gets too expensive to live in, it can cause trouble for retirees with big dreams and small pockets.

A potential solution? Florida’s gulf coast neighbor to the west: Alabama.

Alabama Delivers Beaches Without the High Housing Costs

Beach houses in Alabama

Warm weather and coastline aren’t hard to find on the Gulf Coast. That’s why some retirees who are turned off by Florida’s higher prices have started moving west, particularly to the gulf state of Alabama.

Alabama areas along the coast typically have lower median incomes than those in Florida, which translates to lower home prices. For retirees who have built up their retirement nest egg, that means it’s possible to buy more home for their cash while still enjoying the beachfront they dreamed of for retirement.

For example, the Daily Mail notes the median home price in Baldwin County, Alabama was a modest $355,000 despite the proximity to the oceanfront. Contrast that with Florida destinations like Fort Lauderdale or Fort Myers, and you begin to see the impact this can have on home prices. In those areas, the home prices tend to average about $378,000 and $411,000.

That may be why Baldwin County has been experiencing about 3% growth for the better part of a decade, while similar areas in Florida, such as Broward County, have only experienced 1% growth. The secret may be getting out.

More Benefits of Alabama for Retirement

Given that both states share coastline with the Gulf of Mexico, it’s probably fair to say that the waterfront views are similar. All else being equal, a retiree might simply look around for the best home values and choose to live there.

Retired couple watching the sunrise

Of course, it’s not always as simple as that. Other elements must be considered in choosing a place to retire, including the cost of local services. If it’s more expensive to pay for essential services in Alabama than it is in Florida, the lower home costs may not be so enticing.

But one reason the home prices are lower in areas like Baldwin County is the lower median income. And lower median income tends to mean lower prices on average services. Retirees told the Wall Street Journal that there’s more bang for buck in the Alabama gulf coast area. The cost of living index backs up this data as Baldwin County scores a 94.5 cost of living index, lower than the national average set at 100.

Other compelling reasons for choosing Alabama over Florida, include:

  • Income taxes: Alabama does have an income tax, but they’re among the lowest in the nation, particularly because they’re so favorable towards seniors who are planning on living in Alabama. So it may not be state-income-tax-free Florida, but for many retirees from the north it’s still a huge cost savings.
  • Activities: With plenty of warm coastline, leisure activities like golf, and a similar amenity makeup to Florida’s panhandle, there’s not a shortage of things that seniors and retirees can do in Florida.
  • Favorable health care costs: Health care costs in Alabama are typically lower than the national average. This is an especially important consideration for retirees who expect to pay for more health care throughout their retirement lives.
  • Low costs overall: Alabama actually ranked first overall in one list of the best places to retire by cost of living. That’s thanks to the third-lowest average cost of living, the third-least total retirement spending anticipated, and the sixth-lowest average monthly ownership cost for senior citizens. It also ranked in the top 20 of states with populations 65 and older, making it a more retirement-friendly state in general if you want to hang out with other retirees.

Add that to the close proximity to the coast and you have a recipe for a great place to retire.

Best Places to Retire In Alabama

There’s no reason Florida can’t be a great place to retire. But for people who want to stretch their dollar for all it’s worth, especially in retirement, Alabama is not only a good Plan B, it might be a good Plan A.

Orange beach in Alabama

A few spots may warrant your attention, according to Retire Guide, like the small town of Orange Beach, which has plenty of senior residents without losing touch with its small-town feel. Fairhope, a small town on the Gulf Coast, is another option recommended for checking out.

And Mobile may not be oceanfront, but it is on the beautiful Mobile Bay and has plenty of waterfront access for boating and fishing.

With interest rates high and mortgage costs correlating with them, how much you spend on housing for retirement matters. Make the most of your budget without sacrificing the oceanfront lifestyle by checking out Alabama.

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Preston Guyton

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