August 23, 2010 and updated Oct, 2013 — Note: We updated and added to this article in early 2017: See “Which State Is Better for Retirement: Arizona vs. Florida“.
In the competitive world of retirement destinations, how do various states stack up against each other? Their are some natural rivalries that make for interesting discussions, such as: the biggies (AZ vs. FL), north vs south (as in North Carolina vs. South Carolina), the northwest (Oregon vs. Washington), the mid-Atlantic (VA vs. DE vs. NJ), and so on. To air these differences and comparisons for your further education, this article will be the first in our series comparing retirement states. We welcome ideas for future comparisons.
Our approach in this article will be to evaluate various factors for each state, letting our readers draw their own conclusions from the facts. As always, reader input is extremely important. We encourage you to use the Comments section below to tell your stories and express your preferences.
Population (Data from Wikipedia and the Census Bureau).
Arizona is the smaller of the two states. Its 2012 population was 6,553,255 as compared to Florida’s 19,317,568. In 2010 AZ had 826,000 people 65 or over (13%) while Florida had many more, 3,105,000, plus a slightly higher proportion over 65 (17%). In our experience, most retirees who immigrate to Arizona tend to be from west of the Mississippi and east of California. Florida immigrants tend to be from the northeast and midwest.
Economics and Home Prices.
In the 2006-2008 period the Census Bureau estimated the median value of owner-owned Arizona home to be $243,600, slightly higher than the $226,300 figure in Florida. The 2011 median household income in Arizona was $54,448, a bit higher than Florida’s $45,040. Both markets are seriously overbuilt, and both have experienced severe declines in housing values since 2006, although they have recovered somewhat since 2011. For example, Zillow estimated that Arizona’s median home value was $173,000 in mid 2013 (vs. $270,000 in mid 2006). The same source put Florida’s mid 2013 median home value at $143,900 (vs. $256,000 in mid 2007). Both states face a difficult future, since they both relied on fast growth to provide tax revenues. Now facing zero or negative growth, their low-tax environments could prove a challenge.
In the area of climate there are striking differences between the 2 states. Most of Arizona has slightly cooler winters than Florida, and in the northern parts of AZ there is not only snowfall but a ski resort. A desert state, AZ’s humidity and rainfall are far lower than Florida’s. Comparing 2 central cities in each state, the average January low in Phoenix is 48 vs. 50 in Orlando. The average July high in Phoenix is a blistering 104 vs. Orlando’s 92. The wettest month in Phoenix is March (1″), while June is Florida’s wettest (7.3″).
Florida is one of the most tax-friendly states in the U.S. (the Tax Foundation ranked its State and Local Tax Burden the 27th highest in 2010). It has no income tax and a 6% sales tax. Counties and states can and do charge additional sales taxes)and no inheritance or estate taxes. Its Save Our Homes initiative prevents property tax assessments from going up higher than the rate of inflation, a major help in keeping property taxes down for seniors. Arizona is also considered a tax-friendly state (ranked 40th highest), although it does have both an income tax (highest marginal rate is 4.54% on joint income of $300,000) and a sales tax (6.6%). Retirees are generally not very affected by the AZ income tax, as Social security income is not taxable in Arizona. In-state and military pensions have a $2500 exemption. Property tax protections are a big reason for Arizona’s tax-friendly ranking. See our Florida and Arizona Retirement Guides for more on taxes.
Physical Environment and Diversity
Both Florida and Arizona are good sized states with a fair amount of diversity within each state. Arizona would probably win the geographic and physical diversity prize between the 2 however. The Grand Canyon State has much higher elevations (Flagstaff is just under 7,000′) and a greater range of climates, ranging from temperate Flagstaff to very hot Tucson in the south. Arizona has plenty of mountains, forests, national parks, and deserts. Florida has several geographic features that Arizona does not have, and that is a gigantic coastline (over 2,200 miles of tidal coastline), over 11,000 miles of rivers and streams, plus many large lakes.
Places to Live
Florida has many more cities and towns, so it probably has to win in any “choice” contest. It has towns and cities along the gulf (Pensacola), along the north coast (St. Augustine), in the interior (Ocala), and in the southeast (Miami), and southwest (Fort Myers). Florida has any number of college towns, large and small. It also has many charming smaller towns such as Winter Park, Lake Mary, and Key West. Arizona, by contrast, is mostly concentrated around the Phoenix area, with smaller offshoots to the north (Sedona, Prescott, Flagstaff), and south (Tucson). Most of the towns around the Phoenix area are suburban and often predominated by new growth. Arizona has some nice places to live, but they are fewer in number.
Choice of Active Communities
At Topretirements we count 76 communities in our Arizona Directory of Active Communities, vs. 211 in our Florida Directory. Arizona has the original active adult community (Sun City), but Florida probably gets the edge for the diversity of communities available in that state.
The relative popularity of states as retirement destinations is hotly contested, but unfortunately, not well supported by data. Del Webb conducted a recent survey that found that the Carolinas (both North and South) had gone ahead of Florida and Arizona as preferred retirement destinations. That survey, however, should probably be viewed as future indications rather than past performance, since more retirees currently live in AZ and FL. Meanwhile at Topretirements, we receive more visits to our Florida retirement guide than any other, followed by North Carolina, Tennessee, California, South Carolina, Arizona, and Texas. (all of our guides can be found at //www.topretirements.com/state/).
Arizona is generally considered a Republican and a conservative state, and has voted that way in Presidential elections since 2000. The governor and both Senators are Republicans, although it has 5 dems and 4 repubs as Representatives in the House. Florida is more mixed, with certain portions being more conservative (the center and north) while others more progressive. FL has a Republican Governor, one of each party for Senator, and its Representatives are 17 (R) and 10 (D). In the 2012 Presidential election Obama won its electoral college votes.
Aesthetics and Intangibles
Both states have their admirers and each has its detractors. Both have many new communities that lack charm and good transportation. Rather than take sides on the issue, we recommend that you visit cities and towns in both states and see if you can’t find the place of your dreams. Certainly both states have some of the most desirable communities in the world, waiting for you to discover them.
For your reference:
State Retirement Guides
Gulf Coast Retirement: Sun, Tax-friendly, and a Lower Coast of Living
Retirement 101 Mid-Atlantic States: MD, DE, VA, NJ
Florida Retirement 101
Dueling Carolinas: NC vs. SC
Dueling States: Arizona vs. Florida
Dueling States Mid-South: TN, GA, KY, AL
California Retirement 101
Retirement in the Southwest: AZ, NM, and Utah
The Mountain States: CO, ID, MT, NV, UT, WY
The Pacific Northwest: Oregon vs. Washington
What state do you prefer? Let us know in the comments section below.