How Florida Retirees Keep More of Their Money in 2026

Florida’s tax-friendly reputation draws retirees every year, but potential 2026 property tax changes, rising insurance costs, and everyday expenses could affect your bottom line. When you purchase through links on our site, we may earn an affiliate commission. Here’s how it works. Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.You are now subscribedYour newsletter sign-up was successfulWant to add more newsletters?Delivered dailyKiplinger TodayProfit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. 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U.S. migration data show the state has recently attracted the largest net inflow of residents age 60 and older.For many retirees, the financial advantages are just as appealing. As a state with no personal income tax, Florida can make retirement income go further. But it's worth noting that those savings don’t tell the whole story.Rising living costs and ongoing tax policy debates, including proposals to eliminate property taxes, mean it's important to understand Florida’s full tax and cost landscape.Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special IssuesProfit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.Profit and prosper with the best of expert advice - straight to your e-mail.Here's more of what you need to knowFlorida doesn't levy a personal state income tax. So, most common sources of retirement income, including Social Security benefits, pensions, and withdrawals from IRAs and 401(k)s, aren't taxed at the state level.Having no personal income tax can also simplify planning. Retirees in the Sunshine State don’t have to manage state-level withholding or track varying tax treatment across income sources.Yes, Florida has no state income tax, and retirees can often keep more of each retirement dollar. But federal taxes still apply, so understanding how your income is taxed by the IRS is key.Example: A retiree with $22,000 in Social Security benefits, $35,000 in pension income, and $13,000 in IRA withdrawals has a combined income of roughly $59,000 in 2026, putting them well above the Social Security taxation threshold.Their IRA and pension withdrawals, after the standard deduction plus the extra standard deduction for age 65 and older, fall mostly in the 12% federal tax bracket.Note: This is a simplified example. Under the new 2025 federal tax law, retirees age 65 and older may qualify for an additional senior bonus deduction of up to $6,000, which can lower their taxable income.For more information, see: How the New Senior Bonus Deduction Works.Property taxes are one of the most important and variable costs retirees face in Florida.Florida’s average effective property tax rate is about 0.79%, according to data compiled by the Tax Foundation. For a $350,000 home, that's roughly $2,765 per year before any additional savings.Notably, Florida offers several programs that can reduce that bill:Retirees must apply through their county property appraiser’s office and meet age/residency and often income requirements. Some counties also offer additional benefits linked to income or veteran status, which can further reduce taxes.As Florida lawmakers continue advancing several property tax reform proposals that could appear on the November 2026 ballot, this year is important not just for current residents but also for retirees deciding when — or where — to move.These proposals range from expanding homestead exemptions to phasing out non‑school property taxes and creating new limits on assessed value growth.If voters approve one or more of these amendments, some changes could take effect as early as 2027, potentially lowering property tax bills for many homeowners.But...nothing is final yet, and the exact measures that make the ballot are still being finalized, so stay tuned.Even without income tax, Florida retirees aren’t tax-free. Sales taxes are a core example.CategoryRate / NotesExample Annual Tax on $30,000 SpendingCombined State & Local Sales Tax~7% (Tax Foundation)~$2,100ExemptionsGroceries and prescription medications generally exempt$0Tip: Florida offers annual sales tax holidays, including periods for back-to-school items, hurricane preparedness supplies, and energy-efficient products, which can help retirees save on essential purchases.Taxes are only part of the equation. Several non-tax costs can significantly affect retirement budgets in Florida.Insurance Costs: As of 2026, homeowners' insurance in Florida is among the highest in the country due to hurricane, tornado, and flood‑related risk. Estimates from the National Association of Insurance Commissioners and recent industry analyses suggest that average annual premiums range from about $3,000 to over $6,000, depending on location, property value, and coverage levels.Housing Costs: According to rental data from Apartments.com average rent in many parts of Florida is about $1,600 to $2,300 per month (~$20,000–$27,000 per year). Though this varies significantly by area and apartment type.Everyday Living Expenses: The latest available data from the Bureau of Labor Statistics’ Consumer Expenditure Survey indicate that households headed by someone age 65 or older typically spent about $61,000 per year on all expenses in 2024, including essentials like food, utilities, transportation, and healthcare.Additional Considerations: While Florida doesn’t tax income at the state level, some public services, like transportation infrastructure and local programs, might be affected by lower income-tax revenue. As a result, some retirees could see differences in the quality or availability of services compared with those of states with income tax.Together, these costs can offset some of the savings from Florida’s tax advantages if you don't plan carefully.Retirees can take a few key steps to maximize Florida’s advantages:Florida’s no-income-tax advantage remains a powerful draw for retirees in 2026, but it’s only part of the picture.Property taxes, sales taxes, insurance costs, and everyday expenses all shape what you actually keep.With major property tax reforms potentially heading to voters in November 2026, this year could mark an important turning point.Retirees who stay informed (and plan accordingly) can maximize their tax savings and lifestyle in the Sunshine State.Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.Kelley R. Taylor is the senior tax editor at Kiplinger.com, where she breaks down federal and state tax rules and news to help readers navigate their finances with confidence. A corporate attorney and business journalist with more than 20 years of experience, Kelley has helped taxpayers make sense of shifting U.S. tax law and policy from the Affordable Care Act (ACA) and the Tax Cuts and Jobs Act (TCJA), to SECURE 2.0, the Inflation Reduction Act, and most recently, the 2025 “Big, Beautiful Bill.” She has covered issues ranging from partnerships, carried interest, compensation and benefits, and tax‑exempt organizations to RMDs, capital gains taxes, and energy tax credits. Her award‑winning work has been featured in numerous national and specialty publications.