Hey Brian, I wanted to pick up on today’s inflation question with one I’d like you to address. You mentioned inflation’s been worse down here since Biden took over but what about the overall cost of living. How does it compare to the rest of the country now?
Bottom Line: Right, so to quickly recap yesterday’s Q&A for anyone who might have missed it...inflation has been running about 2% hotter in the South Florida metro, than even the near 41-year high inflation rate nationally. Good times. But what you’re asking is about how much more expensive it now is to live here generally – compared to the rest of the country. The answer is...15%. The average cost of living is 15% higher in the Miami-Fort Lauderdale-West Palm Beach metro than the country overall. And what’s driving that relative lack of affordability? You’re thinking housing. And you’re right – that's way up there. But actually, the category where South Florida’s cost-of-living is the most out of line with the rest of the country is...transportation. It’s 38.4% more expensive to get from point “A” to point “B” in South Florida as compared to the average anywhere, USA.
Here are the top three categories where SFL’s cost-of-living are above the national average:
- Groceries: 7% (above the national average)
- Housing: 22%
- Transportation: 38%
Now it’s not all bad news. There are two categories where South Florida has below average expense:
- Healthcare: 2% (below the national average)
- Utilities: 3%
But yeah, when you put the whole ball of wax together, you need to earn 15% more here compared to the average rest of the country just to breakeven. The cost of freedom and paradise doesn’t come cheaply. That said, that’s the average of South Florida generally. We do see differences based upon where we specifically live. Breaking it down by county we see...
- Broward: 12% (above the national average)
- Palm Beach: 13%
- Miami-Dade: 19%
So, we’ve got to pay a premium for life in South Florida generally, but that’s especially true in Dade – which is significantly less affordable than its two northern neighbors. And then to tie this together with what I was talking about yesterday – with inflation that’s running hotter down here than the rest of the country – it’s making our already less affordable lives progressively more so as we’ve been disproportionately impacted by Bidenflation. The better news is this...
With below average healthcare costs in South Florida, combined with below average utility costs, the long-term outlook for South Floridians heading towards retirement and for those already in it remains a good one. The key is to have your home paid off prior to retiring. Which, if you’re familiar with my Eight Keys to Success, you’ll know is my first rule of retirement. A mortgage isn’t a retirement plan. As I’ve explained in that key... The average person faces significant negative financial adversity about every eight years. If that happens in retirement and you have the pressure of meeting a mortgage payment – there's lot to lose. Working your entire life only to potentially lose your home in the end with limited options isn’t acceptable. For that reason, when it comes to timing retirement, I’ll only entertain the question if it begins without any debt, including your mortgage.
So, the good news is that by the time you’re ready to retire in South Florida, you have the potential to flip the script on SFL’s affordability challenges and enjoy what you’ve worked so hard for!
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