5 Steps to Building Wealth in Florida
Advice Sunshine State residents can put into action.
Article published: July 29, 2025
Building wealth in Florida requires smart planning. Whether you’re just starting out or looking to take your finances to the next level, a disciplined approach can help you grow your money and protect it against risk – including inflation, taxes, real estate values and job market fluctuations. So, if you’re wondering how to accumulate wealth in Florida we’ll show you what moves you can consider making now, and why having a personalized financial plan can make all the difference.
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1. ELIMINATE HIGH-INTEREST DEBT IN FLORIDA
You can’t build wealth if your savings are constantly drained by debt. Credit card debt is the most insidious, as it typically has a high interest rate that can trap you in a vicious cycle.
Florida residents carry above-average credit card balances. With the high cost of living in Miami and the surrounding areas, it’s not surprising. All in all, credit card holders in Florida had an average balance of $7,392 in 2024.
Focus on eliminating your credit card debt before you start investing. Here’s one popular strategy: If you have multiple cards, pay more on the one with the highest rate first; then when that’s paid off, move to the next highest and so on. Always pay at least the minimum on your lower interest cards.
On the other hand, auto, college and mortgage loans typically have much lower interest rates and in the case of mortgages can contribute to building home equity, so you should pay those according to schedule. Unless you already have your other debts covered and you have substantial cash reserves, don’t be tempted to pay off these types of debts early.
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2. BUILD EMERGENCY CASH RESERVES FOR FLORIDA LIVING COSTS
The amount you should keep in cash reserves depends on two factors – your monthly expenses and the stability of your income. So, consider:
- What are your mandatory monthly living expenses? ÌýThis may depend on where you live in Florida. The average rent in Florida is $2,450 and the median home sale price is $378,666 – both are just a bit above the national figures, according to Zillow. These numbers can be much higher if you want to live in Miami or any other popular or upscale area.
- How stable is your income? For example, are layoffs possible? Are you a business owner with fluctuating income or rental income? The more stable your income, the lower your reserves can be.
- Do you have any large, one-time expenses coming up?
Generally, your reserves should be somewhere between three and 24 months’ worth of spending, depending on how stable your income is. Be thoughtful about where you keep your cash – make sure your choice matches your needs and you’re getting a good yield.
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3. MAXIMIZE FLORIDA RETIREMENT OPPORTUNITIES
After addressing your emergency fund, you can shift your focus to retirement planning. Your employer’s retirement plan is a great place to start. Many employers allow you to contribute to a 401k plan or 403b and offer a match on some of the money you save. If you can’t max out your contributions, try to contribute at least enough to earn your employer match (it’s free money, after all). Then, consider increasing the amount every year until you reach the maximum. Make sure to operate within your comfort zone and make only pretax contributions.
If you’re married and one spouse does not have a retirement plan at work, consider investing in a spousal IRA as part of your financial planning. The self-employed have options too, so don’t forgo this valuable savings vehicle. The more money you save, the more money you can accumulate, which can bring you closer to financial freedom.
Florida’s top employers come from a wide range of industries, from tourism and entertainment, such as Disney, to aerospace with Raytheon.ÌýÌý If you work for one of these employers, they may offer defined contribution savings plans and offer a company match.Ìý
If you’re retiring in Florida, you won’t have a state income tax. That results in some additional good news: Florida doesn’t tax Social Security payments. And if you’re lucky enough to have a government pension, those payments are also state tax-exempt.
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4. INVEST IN IRAS FOR TAX EFFICIENCY IN FLORIDA
Florida’s cost of living may or may not work in your favor depending on where you choose to live in the state. However, Florida has one clear advantage: The state does not have a personal income tax.
No state personal income tax means no state taxes on social security, capital gains and investment income. The state also doesn’t have inheritance or estate taxes. ÌýIn fact, the Tax Foundation ranks Florida as having one of the lowest tax burdens of any state. Of course, it has a sales tax, but with a combined state and average local sales tax rate of 6.95%, Florida doesn’t rank high there either. However, that doesn’t mean you escape federal taxes, so you will want to create tax strategies that help you get the most from your wealth.
One of the best ways to continue to lower taxes while also bulking up retirement savings is to invest in an IRA every year. Depending on your adjusted gross income, you and/or your spouse may still be eligible to contribute to a deductible IRA even after contributing the maximum to your company retirement plan. Deductible IRAs offer two major benefits: you get a tax deduction for the money you contribute; and any interest, dividends or capital gains that accumulate in the plan are also tax-deferred until withdrawal.
If you’re not eligible to invest in a deductible IRA or you’re in a low tax bracket (12% or less), you should consider a Roth IRA instead. In any case, look to avoid non-deductible IRAs, which do not entitle you to a tax deduction and require complex tax documentation.
Your advisor can provide financial guidance to help you determine your eligibility, compare options and decide which IRA may be best for you.
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5. OPEN A TAXABLE INVESTMENT ACCOUNT TO INVEST BEYOND RETIREMENT
Once your tax-advantaged retirement plan contributions have been exhausted, build assets in an investment account and contribute to it monthly. Additionally, if your plan allows you to contribute after-tax dollars and it will not affect your current lifestyle, consider adding additional after-tax dollars to your 401k plan and converting those dollars to a Roth when permitted.
Taxable accounts are just that – taxable – but they have no contribution limits and you can use the money whenever and for whatever you want. You can invest your money in stocks and bonds to have the best opportunity to grow. We recommend diversification as a key factor that can help you grow your money while helping to control risk.
When you diversify your portfolio, work with your advisor to choose investments aligned to your goals. ÌýYou can choose to invest in industries that are prominent in Florida, like entertainment, tourism and aerospace, along with others that make up the broad market like technology, telecom and energy. You can and should consider investing outside the U.S.!
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WHY LOCAL GUIDANCE MATTERS IN FLORIDA
Florida-based financial advisors understand your cost of living, tax rules and special opportunities. Working locally with ²ÝÁñÉçÇø Engines can help ensure your strategy is tailored to your unique financial landscape. Find a Florida-based financial advisor today.
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COMMON WEALTH-BUILDING QUESTIONS FROM FLORIDA RESIDENTS
Q: How can I build wealth in Florida given its cost of living?
ÌýA: Start by budgeting, reducing high-interest debt and investing in retirement accounts that offer tax advantages in Florida.
Q: Are retirement accounts taxed differently in Florida?
ÌýA: Distributions from retirement accounts like pensions and 401ks are not taxed in Florida as the state does not have a personal income tax.
Q: What are the best investment options for Florida residents?
ÌýA: Choose an allocation appropriate for your goals and risk tolerance. Consider one composed of both U.S. stocks and international stocks and also have some exposure to bonds to help cushion against stock market declines (If you’re in a high tax bracket, consider tax-advantaged Florida municipal bonds).
This may be achieved by investing in ETFs and mutual funds. Generally, you don’t want to have more than 5% in any one stock – including your own employer’s – because more than that could prevent you from achieving adequate diversification. In addition, being overconcentrated in one security can cause unnecessary volatility and risk with your retirement savings.
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GET PERSONALIZED HELP BUILDING WEALTH IN FLORIDA
Now that you know how planning and saving for your future can help you build wealth, it’s time for the next step. ²ÝÁñÉçÇø Engines has advisors across Florida who can help you create wealth-building strategies that fit your goals, risk tolerance and timeline. Find a location near you or schedule a free consultation.
This material was prepared for educational purposes only. Although the information has been gathered from sources believed to be reliable, we do not guarantee its accuracy or completeness.
Investing strategies, such as asset allocation, diversification or rebalancing, do not ensure or guarantee better performance and cannot eliminate the risk of investment losses. All investments have inherent risks, including loss of principal. There are no guarantees that a portfolio employing these or any other strategy will outperform a portfolio that does not engage in such strategies.
Past performance does not guarantee future results.
Neither ²ÝÁñÉçÇø Engines nor its affiliates offer tax or legal advice. Interested parties are strongly encouraged to seek advice from your qualified tax and/or legal professionals to help determine the best options for your particular circumstances.
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