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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.
