Why Living in Florida Pays Off—Literally

I live in Southern Florida, and I absolutely love it. There’s the unbeatable weather, easy access to world-class beaches and parks, and a public education system that’s performing better every year. But the real icing on the cake? Florida's tax advantages.

Compared to states like California and New Jersey, Florida offers one of the most tax-friendly environments in the country—which is exactly why so many people are packing up and heading to the Sunshine State.

Here’s what makes Florida’s tax landscape so appealing in 2025:

NO personal income tax
NO state estate or inheritance tax
NO tax on investment income (intangibles)

If you’re moving from a high-tax state, like California where a head of household earning $350,000 could pay nearly $28,000 a year in state income tax, those savings can stack up fast.

So the big question is: What should Floridians do with all that extra cash?

Let’s break it down...

6 Smart Ways Floridians Can Invest Their Tax Savings

1. Build (or Beef Up) Your Emergency Fund

I get it—this doesn’t sound exciting. But it’s essential. Think of it like hurricane shutters for your finances. A solid emergency fund (typically 3–6 months of expenses) keeps you prepared for life’s curveballs: job loss, medical bills, or a cypress tree crashing through your roof after a tropical storm.

Pro tip: Keep emergency funds in a high-yield savings account to earn a little interest while it waits.

2. Supercharge Your Retirement Accounts

Want to retire on your terms and not just live off early bird specials? Then invest those tax savings into your 401(k), IRA, or Roth IRA. The earlier you start, the more you benefit from compound growth—and you may even get additional federal tax breaks.

Retirement in Florida is way more fun when you can afford beachfront dining and spontaneous weekend getaways to the Keys.

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3. Open a Health Savings Account (HSA)

An HSA is one of the only truly tax-free investing tools:

• Tax-free in

• Tax-free growth

• Tax-free withdrawals (for qualified medical expenses)

Just make sure to actually invest the money within your HSA—don’t let it sit idle!

Bonus: After age 65, HSA withdrawals can be used for anything, not just healthcare—though regular income tax will apply.

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4. Save for Education with a 529 Plan

Whether it's for your kids, grandkids, or even yourself, 529 plans are a tax-efficient way to pay for education. Use them for K–12 tuition, college, or even trade schools.

Florida’s prepaid tuition and 529 options offer flexibility and serious long-term benefits.

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Already Checked Off the Basics? Here’s What’s Next:

5. Consider Real Estate or REITs

Florida’s real estate market continues to show strength in 2025. While direct property ownership isn’t for everyone, REITs (real estate investment trusts) offer an easy entry point.

Think of REITs like stock in real estate—they let you invest in property without owning an entire building.

Check out REITs Across America to browse Florida-focused options.

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6. Start That Business You’ve Been Dreaming About

Florida ranks among the top states for entrepreneurs. Low startup costs, no state income tax, and a thriving economy make it ideal for launching your passion project.

WalletHub recently ranked Florida #4 for starting a business in 2025. It’s the perfect place to turn your side hustle into your main gig.

If you have questions about the investment methods outlined in this article or want to discuss investment management, feel free to contact me at F5 Financial’s Venice, FL office or directly book a meeting with me at this link.  

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