The 5 Biggest Financial Mistakes When Retiring in Arizona



The Valley of the Sun is a great attraction for retirees, as it offers almost everything a senior could want. In addition to the warm climate for which it is named, Arizona offers a surprising variety of recreational activities, from world-class golf courses to surprisingly extensive fishing grounds and the majestic natural wonder of the Grand Canyon.

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However, it’s easy for those planning to retire in Arizona to overlook how expensive it can be. While a land that has wide open spaces and is essentially a desert may not seem that expensive, you may be surprised at how much you will have to pay for some of your basic needs. Here’s a look at common financial mistakes that are very easy to make when retiring in Arizona.

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Underestimate overhead costs

According to US News & World Report, Arizona only ranks 36th in terms of overall affordability in the country. The last of the 48 contiguous states to join the Union, this puts Arizona in the position of being more expensive than about two-thirds of the United States.

These higher expenses are spread across a variety of categories, from utilities and healthcare to housing and transportation. While all costs are regional, and there are certainly affordable areas in Arizona, if you plan to live the ideal retirement lifestyle close to amenities and recreational opportunities, you should plan for your budget to be closer to the high end of the range rather than the lower end. general. average.

Forgetting about summer

In 2023, Phoenix, the capital of Arizona, had a whopping 133 days of triple-digit temperatures. That means, essentially, from mid-May to mid-October, Arizona cities should be expected to experience 100+ degree temperatures daily. This can increase your costs by several levels.

First, your cooling bills will not only skyrocket during the summer, but they will stay high for almost five months straight. Then, with such intense heat, you may end up spending more time indoors or in your car, which will also increase your transportation and electricity bills. Annually, including the coldest winter months, only seven states have higher average monthly utility bills than Arizona.

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Assuming healthcare is affordable

Arizona is known for having an extensive healthcare network, ranking No. 4 in the nation according to Goodnow McKay. Hosting prestigious hospitals like the Mayo Clinic (Phoenix) helps the state’s reputation. But CDC data shows Arizona ranks as the seventh most expensive state when it comes to health care costs.

Added to this cost are the great distances that many state residents have to travel to receive treatment. According to US News & World Report, Arizona ranks 43rd in terms of access to health care. So if you don’t live near Phoenix, you may need to plan to travel there for more than just basic medical care.

Without realizing how vast the State is

If you’ve ever been to the Phoenix metro area and a friend asked you to drive to the other side of the metro area for a visit, you’ll know firsthand how great the distances can be in this desert state. This is a trip that can take 45 minutes even with minimal traffic, and perhaps double that during rush hour. This can increase your transportation costs, both in terms of gas (or EV charging) and maintenance, as the harsh summer sun hits your vehicle. Public transportation in Arizona is struggling to keep up with its growing population, so combined with the state’s vast distances, you’ll likely need a car.

Thinking you can get a cheap house

A desert environment with scorching temperatures and long distances to travel may seem like the perfect recipe for low housing costs, but that’s not the case in Arizona. According to RentCafe, Arizona home prices are 18% higher than the national average. In expensive, popular communities like Scottsdale, where the median home price is $821,372, according to Zillow, that margin rises to 42%.

This trend may continue, as both Phoenix and Scottsdale are among the top 10 cities nationally in terms of U.S. cities where home prices have doubled the fastest over the past seven years. Even lesser-known Arizona cities like Chandler, Gilbert and Mesa have seen prices double in that same period.

The bottom line

Arizona certainly has a lot to offer retirees, particularly those looking to live in a recreation-filled area with a warm climate. But you may have to budget a little more than expected if your goal is to retire in the Grand Canyon State. Having this knowledge beforehand can help you plan a savings and investment strategy that will get you where you need to be.

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This article originally appeared on The 5 Biggest Financial Mistakes When Retiring in Arizona