Arizona’s population increases in the winter months, which is just one thing it has in common with Florida, says Kiplinger in the article “9 Things You Must Know About Retiring to Arizona.” Many retirees have settled in Arizona year-round. The nation’s first active adult retirement community was in Youngtown, Arizona in 1954. Now 17% of the state’s 7.2 million residents are 65 and older. Let’s look at the Grand Canyon State as a retirement destination.

You’ll have lots of company. Between 2010 and mid-2018, Arizona’s population grew by 12.2%. By comparison, the population of New York (state, not city) only grew 0.8%. In 2018, Arizona ranked number five (behind Vermont, Oregon, Idaho, and Nevada) among states with the most inbound movers. Retirement was the reason for the relocation cited by 37% of the Arizona newcomers in a United Van Lines survey. Arizona has more than 100 age-restricted retirement communities.

It’s a dry heat. You’ve heard it before, and it’s true. The dry heat is more tolerable for most people than the humidity and heat of Florida. Annual precipitation ranges from 3 inches in the arid southwest to 40 inches in the mountains of east central Arizona, according to the Arizona State University’s climate office.

There are plenty of great places to retire. The state isn’t one big arid desert. There are a variety of climates that offer seasonal changes. If health care is important, look at Mesa, one of 10 U.S. cities celebrated by Kiplinger’s Personal Finance in 2018 as great places to retire for your health. Mesa received high scores for its proximity to top-rated hospitals, a cost of living that’s lower than the national average and a variety of activities.

Snowbirds and rental property. Planning to rent before you buy to look at different communities? In most spots, January through March or April is peak snowbird season. Migrators often book the same place for the coming year, before they leave in the spring. Others start booking their rentals as early as August. Early birds get the biggest blocks of time and the most-desirable properties. Expect to pay monthly rent (excluding fees and taxes) of $2,500 to $3,500 for a standard condo (two-bedroom, two-bath) or $3,000 to $9,000 for a single-family home (three-bedroom, two-bath) from January through March.

It’s a seller’s market in late spring. The best time to buy a home in Arizona is usually in the late spring, when the competition from snowbirds ends. In summer and fall, you’ll have fewer options to buy.  However, the remaining sellers may be more motivated and willing to deal. Thinking of buying? Read more about trust planning for your real estate.

Arizona’s income tax for retirees is mixed. Your state tax bill in Arizona will depend a lot on your retirement income sources. Arizona doesn’t tax Social Security benefits, and on most other income that is taxed, rates are low—from 2.59% (for married filers with as much as $20,690 of taxable income) to 4.54% (for married filers with more than $310,317 of taxable income). However, private pensions are fully taxed at ordinary income tax rates. The same is true for government pensions from other states. For those with military, civil service and Arizona state and local government pensions, only the first $2,500 in this income is exempt from Arizona state taxes.

Sales taxes vary. Arizona’s state sales tax is 5.6%. However, localities can add their own sales taxes. As a result, you could pay as much as 5.3% more in sales tax, depending on where you live (and shop).

You don’t need to reset your clocks. Arizona is one of only two states (with Hawaii) that don’t have daylight saving time. Arizona aligns with Pacific Daylight Time in spring, summer, and part of fall. However, they are on Mountain Standard Time during most of the fall and winter.

Reference: Kiplinger (April 19, 2019) “9 Things You Must Know About Retiring to Arizona”