Florida has long been one of the country’s most popular retirement destinations. Warm weather, no state income tax and plenty of communities designed for seniors make it especially appealing to those looking for a fresh start after leaving the workforce.
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But without careful planning on how to manage your money, your retirement could be uncomfortable. Below are four things experts recommend retirees not to do with their money in certain Florida cities.
Also here is your complete guide to retiring in Florida.
Don’t Overspend on Housing
It’s tempting to upgrade your lifestyle when you move to Florida, especially if you’re coming from a higher-cost state. But overspending on housing can eat away at your retirement savings faster than expected.
“Housing costs are likely cheaper in Panama City than in some other parts of the state, but we still have flooding risks and high temperatures like the rest of Florida. That can mean paying more for home insurance and higher energy costs,” said Alex Astin, financial advisor at Burns Estate Planning.
If you’re on a fixed income, unexpected costs like HOA fees, assessments or hurricane repairs can strain your budget.
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Don’t Budget Too Little for Healthcare and Long-Term Care
Healthcare is often one of the largest expenses in retirement and in Florida, it comes with unique challenges. While larger cities may offer a variety of hospitals and specialists, smaller towns like Panama City don’t always have access to high-level medical care. That can mean traveling for certain treatments, which adds to the cost.
“Because Panama City is a small town, like many other small towns in Florida, high-level healthcare can be hard to come by. Retirees should be prepared to spend extra for out-of-town trips for some medical needs,” Astin said.
Long-term care is another big financial hurdle. According to Astin, it can cost anywhere from $60,000 to $130,000 annually depending on your needs. “Be prepared to spend more money than expected to get a room in a good facility because they are in short supply,” Astin added.
Don’t Leave Too Much Cash Sitting Idle
Keeping too much money in checking or savings accounts may feel safe, but it can slowly erode your financial security. With inflation, you risk losing purchasing power each year with your idle cash.
“As the Federal Reserve continues its rate-cutting cycle, the excess money sitting in their checking, savings and money market accounts is earning less and less, often far less than the current inflation rate,” said Michael Fiammetta, financial advisor at 4 Generations Wealth Management. “This means what their money can buy today won’t keep pace to afford those same things a year from now and with more time, it only gets worse.”
Putting idle cash in investments that outpace inflation can help you protect your money from losing purchasing power.
Don’t Overlook Estate Planning
Nearly 80% of U.S. adults lack a will or trust. “In cities like Sarasota, West Palm Beach and Boca Raton, where a lot or most of one’s net worth may be held in their home. Not having a will or trust or clear beneficiary designations on the deed or title of those assets may cause significant delays, legal costs and potential tension and disagreements between your loved ones over your final wishes,” Fiammetta said.
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This article originally appeared on GOBankingRates.com: 4 Things Retirees Shouldn’t Do With Their Money in Panama and Similar Florida Cities
