Keeping one home near the grandkids and buying a second one in Florida sounds like the perfect retirement compromise, but couples who have tried it say the financial penalty is far steeper than either spouse expected.<\/p>\n
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As retirement approaches, couples often face a tough choice<\/a> about where to live. One spouse has spent years dreaming about winters in Florida. The other wants to stay close to the grandkids, so they try to split the difference by keeping the house up north, buying a place in Florida, and spending part of the year in each. This sounds like a reasonable compromise, but maintaining two homes can make it the most expensive option, and the added cost can change how much you need in your retirement portfolio.<\/p>\n A recent Wall Street Journal feature on retirees who moved to low-tax states found that many of them spend about what they did before, and some spend more. One Lakewood Ranch retiree saw his property taxes rise by more than $2,200 a year, and his HOA dues rose by more than $700 a month. Those surprises cost more for a couple that owns two homes.<\/p>\n Three Budgets for the Same Couple<\/p>\n Picture a 67-year-old couple who own their home outright near the kids. Each claims Social Security<\/a> at the SSA\u2019s typical retiree benefit of $2,084.40 a month, totaling about $50,000 a year for the two of them. Medicare Part B<\/a> runs $202.90 a month per person, or $4,870 annually. The healthcare line below adds Medigap and Part D<\/a> on top of that.<\/p>\n Line item Food, utilities, transport, travel Healthcare Northern home running costs Florida home (tax, insurance, HOA, maintenance) Travel between family and home Reserves, vehicles, gifts, income taxes Total Florida\u2019s biggest drawback is insurance, as the average homeowners insurance premium is holding at $8,471 annually, the highest in the country. But there are also some meaningful savings on the other side. Florida has no individual income tax, ranking Number 1 in the Tax Foundation\u2019s index, and a 2023 Vanguard study found that retirees who move to cheaper areas can free up about $100,000 in home<\/p>\n How Much More Portfolio the Compromise Requires<\/p>\n Subtract Social Security from each budget and divide what\u2019s left by 4%<\/a>. That rate matches a horizon of 25 to 30 years that starts at 67. Staying put takes about $1.375 million. Moving to Florida takes about $1.575 million. Splitting the year takes about $2.225 million, which is $850,000 more than staying near the kids.<\/p>\n Waiting to claim helps because every year of delay past the standard retirement age adds 8% to the benefit<\/a>, per the SSA. Waiting until 70 raises combined benefits to roughly $62,000. That cuts the split-year target to about $1.925 million. It remains the most expensive option.<\/p>\n Homestead Rules Punish the Two-Home Couple<\/p>\n Many two-home budgets overlook that Florida\u2019s homestead protections apply only to a permanent residence. That includes an exemption of up to $51,411 for the 2026 tax year and a 3% annual cap on assessment increases. Staying domiciled up north leaves their Florida house classified as non-homestead property. Its assessment cap is 10%, so in practice the assessed value tracks the market.<\/p>\n Take a $500,000 house that grows 6% a year. After ten years, the homestead assessment would be about $672,000. The non-homestead assessment would be about $895,000. At 18 mills, that difference adds about $4,000 to the yearly tax bill by year ten.<\/p>\n
\nStay near kids
\nMove to Florida
\nSplit the year<\/p>\n
\n$60,000
\n$60,000
\n$60,000<\/p>\n
\n$14,000
\n$14,000
\n$14,000<\/p>\n
\n$16,000
\nNone
\n$16,000<\/p>\n
\nNone
\n$20,000
\n$25,000<\/p>\n
\nNone
\n$6,000
\n$4,000<\/p>\n
\n$15,000
\n$13,000
\n$20,000<\/p>\n
\n$105,000
\n$113,000
\n$139,000<\/p>\n