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Check just about any list of the most popular retirement destinations in the United States, and chances are Arizona will appear on it. The Cactus State has long been a top retirement spot because of its warm climate, open spaces and leisure activities. Even ChatGPT ranks Arizona as a top retirement state, placing it No. 4 in a recent analysis of all 50 states.
That doesn’t mean Arizona is perfect, however. If you don’t do your research and plan your finances the right way, you could regret retiring there. Here are five of the biggest money mistakes you might make when retiring in Arizona.
Underestimating the Overall Cost of Living
Most Sunbelt states have a low cost of living compared with other parts of the country, but Arizona is not one of them. A 2023 report from the Missouri Economic Research and Information Center ranked Arizona 36th in the nation for affordability based on housing, grocery, utility, transportation, healthcare and other costs. That means only 14 states and the District of Columbia were more expensive in 2023.
Misjudging Housing Costs
Similarly, housing can be expensive in Arizona, depending on where you live. Housing in the state is 20% higher than the national average, according to RentCafe. But in Scottsdale, Zillow estimates average home values at around $792,500 — more than double the national average. If you choose to live in Phoenix, you can expect to pay an average of about $416,500 for a home. Rents in the Phoenix metro area are more reasonable — almost 10% less than the national average, according to RentCafe.
Not Accounting for Air Conditioning
You probably know that it gets hot in Arizona. The state ranks as the 9th hottest in the U.S., according to World Population Review. Its average annual temperature is 61.2 degrees Fahrenheit — but the average is 105ºF throughout June, July and August, according to the Arizona Office of Tourism. A 2019 study by Sense found that the average cost of summer utilities in Arizona was $477. That was far and away the most expensive in the country at that time, easily outdistancing No. 2 New Jersey ($327).
Relying on Public Transportation
Although some parts of Arizona offer public transportation to seniors, those are rare. Most of the state has very limited public transit options, which means you will likely need to buy and maintain a car to get around.
Overlooking Healthcare Costs
The problem isn’t the quality of healthcare in Arizona — it ranks 5th in the nation in overall healthcare qualify, according to U.S. News. But it only ranks in the middle of the pack (No. 24) in terms of public healthcare options, and was near the bottom (No. 46) in healthcare access. Unless you live in a metro area with numerous options, you could spend a lot of money getting to and from hospitals and doctors’ offices.
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