That picture-perfect retirement destination may actually become a financial or physical nightmare and here’s why.
Florida
Florida has no state income tax, and for retirees who have planned accordingly, it can seem like paradise.
However, Florida homeowners are finding themselves “insurance poor” as companies are hiking premiums and fleeing the state altogether.
Catastrophic coverage isn’t just based on hurricanes anymore. Protecting your home from rising sea levels and sinkholes is pricing fixed-income retirees right out of the state.
You may find that instead of enjoying your tax-free retirement, you’re just paying your exorbitant home insurance payment every month.
Arizona
Living in the desert is great, until you realize you’re basically a prisoner in your own home for four months out of the year.
Arizona’s “urban heat island” effect doesn’t even allow temperatures to cool at night in certain metro areas like Phoenix.
You basically can’t walk to your mailbox after dark because it’s dangerous.
Talk to any retiree who came here for warmth and they’ll tell you about how inactive they’ve become. I’ve heard more than one retiree mention how lonely it can feel being cooped up inside all day, every day.
New Jersey
Sure, everyone’s aware of the hefty property taxes in New Jersey, but the state’s rather unpleasant “Exit Tax” upon selling your home often catches people off guard.
Essentially, the state freezes a percent of your home’s gain at closing and holds it until you leave. And it can really kill your moving budget.
Furthermore, the less obvious reality is that after a demanding career, dealing with New Jersey’s crowds and traffic comes across as quite aggressive.
Illinois
Illinoisans find themselves living in fear of property taxes due to the state’s large unfunded pension liability.
Since property owners always get squeezed when a local budget comes up short, retirees are always one budget away from not being able to afford their home. They’re on a fixed income, so they can’t just pick up extra work to cover a budget deficit like others might.
Many pensioners say they feel like they don’t know if they can continue to live in the neighborhood they love if their state legislators continue to mismanage their pensions.
California
Retirees who sought California’s scenic foothills or coastal canyons are finding themselves redlined by insurers because of wildfire danger.
Once dropped by a standard carrier, you’re pushed into the expensive and bare-bones coverage of the state’s FAIR Plan.
Many seniors find themselves unable to sell their houses, even after years of investment, since potential buyers struggle to secure insurance.
Living among the redwoods/cliffs has gone from a peaceful retirement to an annual evacuation season followed by forced and expensive brush-clearing requirements.
Hawaii
All those hours in the sun can come with a price. Retirees often find that specialized medical care on the islands can be both inconvenient and expensive. Complex conditions require you to travel to the mainland for every appointment.
Constant trips back and forth become tiresome and costly. Not to mention the insane shipping markup on everything from gallons of milk to gallons of gas.
Many retirees end up giving in to the profound isolation, often called “island fever,” and relocate back to the mainland to be nearer their relatives and major medical facilities.
Texas
Texas is advertised as a tax-friendly haven, mainly because of its lack of state income tax.
But they make up for it by charging some of the highest property taxes in the nation.
Many retirees who downsize to a much cheaper home in Texas are usually shocked to discover that their tax bill is many times higher than what they paid back in the Midwest/Northeast.
These taxes go up with your home value, so if you live in a state with a hot real estate market you are actually punished because your annual bill will go up even if your income doesn’t.
Sources: Please see here for a complete listing of all sources that were consulted in the preparation of this article.
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