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Florida offers Social Security recipients the financial equivalent of an open-arms welcome because it imposes no income tax on government retirement benefits or, in fact, on other types of income. This means retirees who rely on monthly Social Security checks can focus a greater portion of their financial resources on supporting their retirement lifestyle. In Florida, Social Security contributes more than $93 billion in retirement benefits to nearly 5 million retirees and their families. In addition to tax-free Social Security benefits, these beneficiaries also enjoy lower property taxes than most states, as well as sales taxes that are no higher than the national average.
Social Security is a central financial support for most retirement plans. Find out how to make the most of your government retirement benefits with the help of a financial advisor.
Although Florida does not collect direct taxes on Social Security payments, Florida still receives significant economic value from government benefits. Through all of 2022, state residents received just over $93 billion from Old-Age, Survivors and Disability Insurance (OASDI), the main social security program for retirees, their dependents and disabled workers, according to the Social Security Administration’s latest annual report. Of that, just over $73.9 billion went to retired workers and just over $9.5 billion was paid to survivors, while disability benefits totaled almost $9.7 billion.
The payments totaled nearly five million Floridians as of December 2022. Broken down by type of benefit, more than 3.8 million of those receiving pension benefits were retirees, 129,472 were spouses and 48,385 were children. Survivor benefits were paid to 265,699 widows or widowers and parents and 122,778 children. Disability beneficiaries include 498,785 employees, 5,958 spouses, and 72,384 children.
Floridians also receive benefits from Social Security’s other major benefit program, Supplemental Security Income (SSI), which supports low-income, elderly, blind, or disabled people. In 2022, SSI paid just over $4 billion in Florida. The bulk of that, nearly $3.1 billion, went to 396,852 low-income disabled people. Nearly $880 million was paid out to 147,156 elderly SSI recipients, while 3,562 blind people received about $27 million.
From a tax perspective, Florida is one of the friendliest states in the country for retirees. For starters, it’s one of the few states without an income tax. As a result, Florida does not collect income taxes on Social Security benefits. That also means that other sources of income for retirees, including withdrawals from retirement accounts, investment returns, and public and private pensions, are also tax-free. Federal income taxes may still apply and may be assessed on Social Security benefits under certain circumstances.
Florida’s tax freedom extends to estates and inheritances, although federal estate taxes may come into play here as well. Finally, Florida sales tax rates are about the same as the average state. At 0.86%, the average effective property tax rate in Florida is slightly lower than the national average of 1.01%.
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Florida is part of Social Security’s Fourth Region, headquartered in Atlanta. In addition to Florida, the region spans seven other southern states, including Alabama, Georgia, Kentucky, Mississippi, North Carolina, South Carolina and Tennessee. This region has more than 50 offices in Florida cities from Allapattah to Winterhaven. Larger cities, including Jacksonville and Miami, have multiple locations.
To find the office nearest to you, Floridians can use Social Security’s office locator. This online tool uses an information locator’s postcode to identify the local office, including the address, directions to the location and opening hours. Social Security’s main website, SSA.gov, is also a way to reach the agency. Users can apply for most types of benefits, view their work history, and receive and estimate their future benefits by using the website. Social Security also has a toll-free telephone number, 800-772-1213, available Monday through Friday between 8 a.m. and 7 p.m. local time.
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In addition to the warm weather, Florida’s appeal to retirees also extends to tax treatment. The state does not impose income taxes on any income, including Social Security benefits and other sources of retiree income, such as pensions, retirement account withdrawals, and investment returns. Nearly 5 million Florida residents received more than $93 billion in payments from Social Security’s main OASDI program in 2022. Social Security also paid out about $4 billion through its SSI program for low-income people in Florida.
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