Florida homeowners insurance costs up to $15,000 annually versus $2,500 in Arizona, a 30-year gap that can exceed $350,000 and dwarfs any income tax savings.
After buying a home, a $1 million couple invests roughly $600,000, generating about $78,000 annually. That amount barely matches average U.S. household spending of $78,535.
Arizona's 2.5% flat income tax is a minor drag of roughly $1,250 per $50,000 withdrawn, making it the more forgiving state for retirees with exactly $1 million.
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There are plenty of people who have a million dollars, want sunshine, and their bodies are done with winter. Is it Arizona or Florida? Both states pitch themselves hard to retirees, and both deserve the pitch. For a specific dollar figure, the answer clearly favors one state. The two states diverge on housing carrying costs, tax treatment of retirement income, and one enormous line item that quietly rewrites the whole budget over a thirty-year horizon.
Here is what it actually takes to make a $1 million portfolio work in each state, and where the math breaks in ways the brochures do not mention.
Start with the headline. The BEA's Regional Price Parities put Arizona's cost of living index at 100.677 and Florida's at 103.414. Arizona sits just below the national average, Florida a couple of points above. On a $60,000 retirement budget, that gap is real but not decisive. It is roughly the difference between an extra dinner out each week and skipping it.
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Housing is where the gap widens or narrows depending on where you actually land. The Case-Shiller National Home Price Index sits at 332.7 as of April 2026, up 0.8% month over month and in the 90th percentile historically. Both Phoenix and the Florida metros ride at or above that trajectory. A retiree paying cash for a modest single-family home is likely writing a check between $375,000 and $475,000 in either state's mid-tier suburbs. That leaves roughly $525,000 to $625,000 of the million to actually fund the retirement, and it is why the annual math gets tight fast.
Source: Yahoo Finance Top News — This article was automatically imported from the source. Read full article at original source →
