Texas vs Florida – Which is Better for Retirement?

You have reached the point of life that you have long waited for: retirement. Decades of work and planning have gone into getting ready for this new chapter of your life and now you’re facing the decision about where you are going to spend your retirement.

Colder weather just doesn’t settle well with your bones like it used to. You can feel the weather on the way and winter is no longer a time to look forward to, but a time to dread. It makes you achy and try as you might you just can’t get warm.

Escape seems the only option, and so you’ve narrowed down your choices to two states along the southern border of the United States: Texas vs Florida.

But which of these two states is the best place for retirement? How do you choose? Let’s take a closer look at each…

Affordability

The first question that is likely to come to your mind is what the sticker price is going to be. Retirees are typically living off a fixed income and need to be as frugal with their money as possible. While there are great jobs for seniors, not everyone wants to continue working. The price of retirement matters to them, and they need something economical. How do Texas and Florida compare to one another in this department?

Is Texas an Affordable Place to Live?

The cost of living in Texas is widely considered as being very low compared to other states. Many even argue that it is significantly less than what it costs to live in Florida. According to research from 2020, to retire comfortably in Texas, you’ll need $58,000/year. You can live in Texas for less, of course, but if you want to avoid feeling like you need to be incredibly conscious of what you spend, that’s a good number to shoot for.

Taxes also need to be considered anytime somebody is talking about moving to a new state. What do they look like here? Many seniors end up picking up part-time work after they retire, whether to help make ends meet, to put a little extra money in their pocket, or simply because they enjoy getting to interact with new people on a daily basis.

If this is you, you’re in luck. Texas doesn’t have an income tax, so you’ll be able to keep much more of your paycheck than, say, somebody who works the same job in California will. There are other taxes that you need to be aware of, however.

There’s no personal property tax in Texas either (unless you use your property for business purposes), so Texas is one of the few states in the Union in which you don’t rent your home from the government. It’s rather nice to be able to own your own property, especially if you’re on a fixed income that forces you to stretch every dollar that you bring in.

For instance, the sales tax. In Texas, it’s 6.25%. Not terrible compared to other states, but it’s there.

Many retirees are concerned about estate taxes. To work hard and save your money so that you can gift it to your children, grandchildren, and friends when you are gone only to have it taken from them in the form of a death tax is obscene to many and is the reason that so many seniors put their assets into trusts.

Escaping to a state that doesn’t have a death tax, however, is another “financial weapon” that many retirees resort to, and Texas just so happens to be one of those states. After you pass, Texas doesn’t take your assets like many other states do.

Other taxes to know about are that gas in Texas is taxed at 20 cents/gallon, and counties may tack on their own sales taxes to purchases as well. In some parts of taxes, these county sales taxes can make your sales tax be as high as 8.25% of your purchase. So, you may want to “shop around” a bit when it comes to finding a county in Texas to retire in.

Is Florida an Affordable Place to Live?

In 2020, to comfortably retire in Florida, you would have needed $62,000/year throughout your retirement. With inflation, that number is likely to be higher in 2022, but the point is that Florida is slightly more expensive to live in than Texas.

How much it costs to live someplace largely depends on what part of the state one lives, of course, with busy metropolitan areas typically costing more than rural areas, but overall, Florida still costs more.

Like Texas, Florida has no personal income tax. This means that if you do end up picking up part-time work as you retire, you’ll be able to keep as much of your paycheck as possible. The tax structure in Florida is similar to Texas in other ways as well.

For example, there’s no estate tax on your assets after you pass. Your death is not a taxable event in Florida.

Sales tax is comparable to Texas, being 6% (compared to Texas’ 6.25%), but if you like to travel, there’s a tax of 42 cents/gallon in Florida.

Florida does have property taxes, as well, and they’re somewhat confusing. An exemption to property taxes can be achieved of up to $50,000, though, if one is 65+ years old or disabled.

Climate

When people think of either Florida or Texas, one of the first words that comes to mind is “hot.” Both states have heat in abundance. Let’s take a closer look at the intricacies of the weather in each state, though, to give us a better understanding as to what the pros and cons of each are.

What’s the Climate Like in Texas?

Texas is going to be hot no matter where you are, but the state is massive (it’s the only state in the continental US with its own electric grid), and so, there are a few climates and geographies within the state.

The closer one is to the Gulf of Mexico, the hotter and muggier it is going to be. The more you have to worry about hurricanes as well. If one moves further inland into the heart of Texas, the weather dries out, but it remains very hot. For example, Central Texas is known for being very arid and hot, but it also has about as short of a winter as is possible in the continental United States.

Sunshine is constant throughout Texas regardless of where you are, however. There’s not going to be a lot of dreary, gray days here.

The Piney Woods area is actually considered a tropical climate and is the wettest part of Texas. If you’re used to green and are leaning towards moving towards Texas, this is likely the part of the state that you’re going to be interested in. The further west you get in this state, the browner things become.

What’s the Climate Like in Florida?

Like Texas, Florida is very hot. The heat of Florida is mainly in the morning, however. Daily thunderstorms hit this state, and after the storm passes, it’s not uncommon for the temperature to drop 10-20 degrees.

Yes, Florida gets a lot of rain, with approximately 59” falling on the state per year. Known as “The Sunshine State,” Florida weather is rarely dreary, and the area is filled with blue skies and hot weather. Humidity-wise, the closer one gets to the coast, the muggier things get.

Winters in Florida are considered “cold” when temperatures drop down into the 50s. One regularly witnesses Floridians bundled up like they’re in a Wisconsin winter during the month of January as a result.

Like Texas, Florida is known for its hurricanes as well, with the hurricane season starting on June 1 and ending November 30.

Popular Retirement Areas in Each State

If you’re going to retire in a new state, you want to know what you’re walking into. Being around other people who are in a similar stage of life not only means that there is going to be a social network already developed in the area that one can easily plug into, but it also means that there is a higher chance of amenities being nearby that a retiree will want and need.

Here are some of the most popular areas to retire in each state.

Where Are the Most Popular Areas to Retire in Texas?

Beaumont is a very popular place in this state for retirees to flock to. An hour and a half outside of the city of Houston, Beaumont provides citizens with nearby access to high-grade medical facilities while maintaining a lower cost of living than would be experienced if one lived in Houston proper.

Progresso has widely been touted as the “most affordable” city in all of Texas, making this a town to consider if cost is the main factor in one’s considerations, and Breckenridge has also been noted as being approximately 25% cheaper to live in on average than compared to the rest of the US.

Where Are the Most Popular Areas to Retire in Florida?

In this author’s experience, the entire Gulf Coast of Florida is a very popular place to retire. The entire state is filled with amenities that are a boon to retirees, but west of Orlando along much of the Gulf Coast is filled with retirees. It’s truly hard to pick a bad spot on the Gulf Coast of Florida to retire.

The weather is beautiful, the beaches are white, and the ocean is crystal clear. The daily thunderstorms still hit the area without fail, but it’s a gorgeous are that plenty of other Americans have already chosen to be their retirement vista.

If one goes down to the southern tip of Florida, they’re likely going to want to have a ready understanding of Spanish, as that is just as likely to be heard in conversation while out and about as is English, if not more so.

Texas vs Florida Summary

Choosing which state – Texas vs Florida – to retire in doesn’t have to be a daunting experience. Ultimately, what the final verdict is will depend on the person that is making the choice. If they’re more interested in living in an area where their grandkids will have plenty to do, Florida will likely make the better choice, as there are plenty of theme parks throughout the area and other commercial attractions (particularly in Orlando).

In the same vein, there are some incredibly cheap flights via Allegiant Airlines that can be found flying into and out of Florida. This makes it that much easier for family members from far away to come and visit. I’ve yet to find airline deals anywhere near as low in price to the West as one regularly finds for Florida, so this is something to consider.

For greater privacy (a.k.a., less people), to get away from daily rain, and for greater hurricane protection, inland Texas would serve one better. If one is from the West already, and lack of foliage doesn’t bother them, Texas would once more make one feel more at home. For those who have spent their lives where trees and landscapes are actually green, Florida will feel more natural.

Both states have beautiful beaches, so one doesn’t really have the upper hand over the other in that regards. Both states have comparable taxes, though Texas does seem to have slightly better/lower tax rates than does Florida, particularly with their lack of property tax.

While Florida regularly gets hammered with hurricanes, the northern part of Texas is known for its tornadoes, so a quality tornado shelter – to this author – is a must if one is going to live in Texas.

There’s no clear winner here, as there is a lot to be said for each respective state. What are your thoughts, however? Do you prefer one state over the other? Are there other factors to take into consideration that we didn’t cover above? Which did you choose? Let us know your thoughts in the comments section below.