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Florida extends the financial equivalent of an open-arms welcome to Social Security recipients, since it collects no income taxes on government retirement benefits or, in fact, other types of income. This means retirees depending on monthly Social Security checks can devote more of their financial resources to supporting their retirement lifestyles. In Florida, Social Security contributes more than $93 billion in retirement benefits paid to nearly 5 million retirees and their families. In addition to tax-free Social Security benefits, these beneficiaries also enjoy lower property taxes than in 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.
Though it collects no taxes directly from Social Security payments, Florida still receives sizable economic value from government benefits. In all of 2022, according to the Social Security Administration’s latest annual report, the state’s residents took in just over $93 billion from Old Age, Survivors and Disabilities Insurance (OASDI), the primary Social Security program for retirees, their survivors and disabled workers. Of that, a little over $73.9 billion went to retired workers and just more than $9.5 billion was paid to survivors while disability payments totaled almost $9.7 billion.
The payments went to close to five million Floridians in total in December 2022. Breaking it down by benefit type, more than 3.8 million of those receiving retirement benefits were retirees, 129,472 were spouses and 48,385 were children. Survivors benefits were paid to 265,699 widows or widowers and parents and 122,778 children. Disability beneficiaries include 498,785 workers, 5,958 spouses and 72,384 children.
Floridians also receive benefits from Social Security’s other large benefit program, Supplemental Security Income (SSI), which supports elderly, blind or disabled low-income people. In 2022, SSI paid out slightly more than $4 billion in Florida. The bulk of that, almost $3.1 billion, went to 396,852 disabled low-income people. Almost $880 million was paid out to 147,156 aged SSI recipients, while 3,562 blind people received about $27 million.
From a tax standpoint, Florida is one of the friendliest states in the country for retirees. To begin with, it is one of just a handful states with no state income tax. In consequence, Florida collects no income tax on Social Security benefits. That also means other sources of retiree income, including retirement account withdrawals, investment earnings and public and private pensions are similarly untaxed. Federal income taxes may still apply and can be levied on Social Security benefits in certain circumstances.
Florida’s tax freedom extends to estates and inheritances, although, again, federal estate taxes could come into play. Finally, Florida’s sale tax rates are about the same as the average state. At 0.86%, Florida’s median effective property tax rate is somewhat less than the national median of 1.01%.
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Florida is part of the fourth region of Social Security which is headquartered in Atlanta. In addition to Florida, the region stretches over seven other Southern states, including Alabama, Georgia, Kentucky, Mississippi, North Carolina, South Carolina and Tennessee. This region maintains more than 50 offices in Florida cities from Allapattah to Winterhaven. Larger cities including Jacksonville and Miami have multiple locations.
In order to find the office closest to them, Floridians can use Social Security’s office locator. This online tool uses an information-seeker’s ZIP code to identify the local office, including the address, directions to the location and hours of operation. Social Security’s main website at SSA.gov is also a way to reach the agency. Users can apply for most types of benefits, review their work history and get and estimate of their future benefits by using the website. Social Security also has a toll-free telephone number, 800-772-1213, that is answer between 8:00 a.m. and 7:00 p.m. local time Monday through Friday.
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In addition to the warm weather, Florida’s appeal to retirees extends to tax treatment. The state levies no income taxes on any income, including Social Security benefits as well as other sources of retiree income such as pension, retirement account withdrawals and investment earnings. Nearly 5 million Floridians received over $93 billion in payments from Social Security’s main OASDI program in 2022. Social Security also paid out approximately $4 billion through its SSI program for low-income individuals in Florida.
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