Tax-Free Retirement Income in the Sunshine State
You moved to Florida to escape state income taxes. Smart move. But are you still paying federal taxes on your 401(k) distributions? There's a better way to keep even MORE of what you earn.
What Florida Gets Right
No State Income Tax
One of only 9 states with zero state income tax on wages, retirement, investments, or anything else
Homestead Exemption
Up to $50,000 off your primary residence value for property tax purposes, plus portability
Strong Asset Protection
Unlimited homestead protection and cash value life insurance exemption from creditors
No Estate Tax
No state-level estate or inheritance tax—your heirs get what you intended
No Tax on Retirement
Social Security, pensions, 401(k), IRA distributions—all exempt from state tax
Business-Friendly
No franchise tax, no unitary tax, competitive corporate structure
But Uncle Sam Still Wants His Cut
You escaped California, New York, or Illinois. Great! But federal taxes don't care which state you live in. Your 401(k)? Still fully taxable at federal rates.
❌ Traditional 401(k) in Florida
- ✓ No state income tax
- ✗ Up to 37% federal tax on withdrawals
- ✗ Required Minimum Distributions at 73
- ✗ Triggers Social Security taxation
- ✗ Increases Medicare premiums (IRMAA)
- ✗ Heirs pay full income tax
✓ Section 7702 in Florida
- ✓ No state income tax
- ✓ No federal income tax (via loans)
- ✓ No Required Distributions—ever
- ✓ No impact on Social Security
- ✓ No Medicare premium increases
- ✓ Tax-free death benefit to heirs
Why Section 7702 Makes Zero Taxes Possible
You moved to Florida for tax savings. But if you're taking $100,000/year from a 401(k), you're still paying $22,000+ in federal taxes. That's not "tax-free"—it's just "state-tax-free."
Section 7702 of the IRS tax code creates a legal pathway to retirement income that is truly tax-free—no state taxes AND no federal taxes. In Florida, that means you can actually achieve the zero-tax retirement dream.
Already in Florida? Maximize Your Move
If You're 40-55
Prime positioning window. You have 15-25 years to build tax-free wealth. Stop maxing out your 401(k) beyond the match. Redirect to Section 7702 for truly tax-free retirement income.
If You're 55-65
Critical planning years. Consider strategic Roth conversions while building Section 7702 cash value. Create layered income streams—some taxable now to fill lower brackets, tax-free income later when you need flexibility.
If You're 65+
Legacy and RMD planning focus. Section 7702 can still make sense for legacy transfer—death benefit passes tax-free to heirs. Also helps offset RMD-triggered Medicare premium increases (IRMAA).
Florida Residents We Typically Serve
Retired Executives
Former corporate leaders who relocated to Florida but still have significant 401(k) balances generating RMDs
Physicians & Specialists
High-income doctors who moved their practice to Florida and want to maximize tax-free wealth building
Business Owners
Entrepreneurs who relocated or sold their business, looking for tax-efficient wealth preservation
Snowbirds & Part-Year Residents
Multi-state residents establishing Florida domicile for maximum tax efficiency
Real Estate Investors
Property investors leveraging Florida's asset protection laws alongside tax-advantaged strategies
Corporate Transplants
Remote workers and executives who relocated to Florida during the pandemic
The Math: Florida Retirement Comparison
Married couple, $1.5M retirement savings, needing $100,000/year income
*Based on 2024 federal tax brackets for married filing jointly. Actual results depend on individual circumstances.
Florida Areas We Serve
Matt Nye's Recommendation
"Florida is the #1 destination for retirement migration—and for good reason. No state income tax on anything. But I see too many retirees who moved to Florida thinking they're 'tax-free' while paying $20,000+ per year in federal taxes on their 401(k) distributions."
If you're going to live in a zero-income-tax state, go all the way. Section 7702 makes true zero-tax retirement possible. Zero state + zero federal = keep everything you earned.
Whether you've been a Florida resident for 30 years or just moved here last month, let's talk about finishing what you started—complete tax freedom."
— Matt Nye, 20-Year Industry Veteran
Frequently Asked Questions
I already live in Florida. Do I still benefit from Section 7702?
Absolutely. Florida eliminates state taxes, but Section 7702 eliminates federal taxes on retirement income. Combined, you achieve true zero-tax retirement—something most "tax-free" states can't deliver on their own.
I moved from New York/California/Illinois. Should I roll over my 401(k)?
Rolling over to an IRA maintains tax-deferred status—you'll still pay federal taxes on distributions. Consider a phased approach: strategic Roth conversions AND new Section 7702 contributions for truly tax-free future income.
What about the Florida homestead exemption? How does that fit?
Florida's homestead exemption (up to $50,000 in property tax savings) and unlimited asset protection are separate benefits. Section 7702 adds retirement income tax freedom on top of these existing Florida advantages.
Is Section 7702 protected from creditors in Florida?
Yes. Florida provides strong creditor protection for cash value life insurance. Combined with unlimited homestead protection, Florida offers some of the best asset protection laws in the nation.
I'm a snowbird—do I need to establish Florida domicile?
For full Florida tax benefits, you need Florida domicile (driver's license, voter registration, etc.). Section 7702 benefits are federal and apply regardless of state, but Florida domicile maximizes total tax savings.
Ready for True Tax Freedom?
You moved to Florida for a reason. Let's make sure you're getting ALL the tax benefits available—not just the state-level ones.
Schedule Your Florida Tax Analysis →Free 30-minute consultation. No obligation. No sales pressure.