What Does It Cost To Retire In Tampa?

A news report estimate makes it seem like it is very expensive to live in Tampa, Florida.

The budget assumed breaks down roughly as follows:

But don't believe the hype. In 2021, Tampa, FL had a median household income of $59,893. https://datausa.io/profile/geo/tampa-fl That's what 50% of whole households are living off there.  Nationally, the average retiree lives on about $30,000 a year.

Suppose you want to retire in Florida (which is what the person in the Facebook post that I am reacting to in this post was talking about).

The average rent for a one bedroom, which is what a retiree typically needs, is less than $1,600/month, which trims $4,800 a year from the total. 

$450 a month for food is high, $300 a month is probably plenty for two people who can usually cook from scratch (which you have more time to do when retired), which saves $1,800 a year. 

I can't imagine why someone with Medicare, a Medicare supplemental insurance and renter's insurance for someone age 65+ (car insurance goes in the vehicle line item as shown) would pay $700 a month for insurance and medical expenses that aren't covered, it would be not more than $400, a reduction of $3,600 a year. 

$9,000 a month, year in and year out for "disasters" is absurd if you rent your home and have the insurance describe above, and already have emergency funds saved upon from your career that you are living off in retirement. 

And $16,800 a year in taxes isn't a thing if you are retired (Florida doesn't even have a state income tax). 

$12,000-$18,000 a year for a car is also high - I pay less than $4,000 a year for a car as a working adult who makes business trips all over the state now and then including the purchase price of the car spread over its useful life of 100,000 miles, car insurance, gas, maintenance, car washes, etc., so reduce that line by $8,000 a year. 

This is $44,000 a year less than the $90,000 a year shown ($46,000 a year), which is quite a bit less than the median income in Tampa. 

You certainly need more than Social Security to live comfortably in retirement, which averages $18,000 a year or so. https://www.fool.com/.../average-social-security-benefit.../ But a retired couple can live comfortably in Tampa for a lot less than $90,000 a year. Indeed, they can live modestly but comfortably, for about half that amount.

They can probably live comfortably enough there with Social Security and Medicare with a nest egg of $700,000 in some reasonable income based investments generating a very manageable 4% of principal, i.e. $28,000, of distributed income each year, which is the industry standard. Any additional returns on the principal increasing the principal to deal with inflation (and you can deplete some of the principal over time to deal with additional inflation since you don't live forever and don't need to die with lots of money in the bank). 

Of course, it is a matter of degree and a bit more is more comfortable and a bit less is tighter. My budget is a lower middle class to middle middle class budget.

You can reduce the size of the nest egg quite a bit, and also hedge against inflation in rent, if you own a modest 1 bedroom condo in Tampa instead. 

You can buy a decent 1 bedroom condo in Tampa for about $150,000, and then you're just paying homeowners insurance, property tax, the HOA fee, and utilities, which isn't nothing (about $100 a month of property tax, $260 a month of HOA and $100 a month of condo insurance in excess of the renter's insurance cost estimated above, and $140 a month in electricity) but $700 a month is a lot less than $1,600 a month - $10,800 a year less which reduces the size of the nest egg you need from $700K to $430K, while costing only $150K and hedging against increased rent in the future (buying is cheaper because current mortgage interest rates of 7%-8% are higher than current investment returns in an income oriented fund).

So, if you sell you current home purchased for a larger family you can net a lot of the $580K you need to have saved to live in retirement. Also, by living in a condo you reduce the physical maintenance work you need to do in retirement if you own a non-condo home when that gets harder. 

Say you have $380K in home equity net of costs of sale, which would be a pretty modest house in lots of the U.S. if you bought it 30-40 years ago and paid it off, then you only need $200K of retirement savings, which isn't heaps for a married couple over their entire careers.

Also, by the time that one of you needs to live in a nursing home, you will probably be able to qualify for Medicaid to pay for it given what the "community spouse" is allowed to have, without having to "pay down" much of the retirement nest egg.