I left New York State in early 2013 and landed in northern Virginia to continue my career. While searching for the best places to retire, I considered the Carolinas as a possible tax-light retirement destination before settling in a new home in the Shenandoah Valley of Virginia. However, increasingly more friends are opting for the Carolinas as they edge near to or into retirement.
Indeed, North Carolina and South Carolina rank high on the list of potential new retirement homes for boomers like me. Both states are in the top five for net migration of people 60 and older, according to Smart Asset. North Carolina was ranked No. 5 and South Carolina No. 3, behind Florida (No. 1) and Arizona (No. 2).
For this feature, we interviewed retirees who have relocated to the Carolinas, as well as real estate and insurance agents who welcome new retirees to the region every year.
Andrew and Lynn Lazar, for instance, sold their longtime home in Hillsborough, N.J., and landed in Latitude Margaritaville Hilton Head, in Hardeeville, S.C. It’s an active adult community catering to Parrotheads, the devoted fans of singer-songwriter Jimmy Buffett (new homeowners are gifted a “Margaritaville” margarita blender).
“As Parrotheads, Margaritaville was a no-brainer,” Andrew Lazar tells us. “When our granddaughter was born, we pulled the trigger and moved forward with our plans to retire and move to our permanent vacation! The houses have that beachy feel. The amenities are beautiful. The pool is a tropical paradise. My daughter said that it’s like living in a resort.”
There were adjustments. They missed their New Jersey family and friends — and good pizza. But they don’t miss the crushing property taxes New Jersey is known for (more on that in a moment).
Are the Carolinas high on your list of possible retirement locales? Here are eight things you need to know about retiring in North Carolina or South Carolina.
For years, the Carolinas and other mid-South states have seen upticks in retirees pouring in. Some are northerners who made the Carolinas a direct target for retirement. Others are the “halfbacks,” northerners who initially thought Florida would be their retirement destination, landed there and then decided to beat a path halfway back. Maybe you're looking to relish the four seasons in the Blue Ridge mountains, or you just want to avoid Florida's sweltering weather.
Oft-repeated advice from recent retirees: Visit your targeted retirement destinations a few times — and go so far as to test-drive your retirement destination by renting there for an extended period of time — before making the plunge. For example, Frank and Carol Hammon retired in Ocean Isle Beach, N.C., 40 miles south of Wilmington, N.C., and about 30 minutes from the South Carolina border and the Myrtle Beach resort area.
“We’ve been vacationing here at Ocean Isle Beach since 1985,” Frank Hammon says.
The Hammons purchased a one-bedroom condo a block from where they rented more than 10 years ago when they were still living and working in Virginia.
My colleagues on Kiplinger.com maintain the incredible Retiree Tax Map — a state-by-state guide to taxes on retirement income, state sales taxes, property tax breaks for seniors, estate taxes and more. Read up on North Carolina's state tax guide, as well as South Carolina's state tax guide to learn how each state taxes retirees.
Retiring in North Carolina
In North Carolina, your Social Security benefits are not taxable; however, the state taxes most other retirement income at the flat rate of 4.75%.
Additionally, North Carolina has what's known as the "Bailey exemption." Income from federal government retirement plans, or designated North Carolina state and local government retirement plans, is exempt if the retiree had five or more years of creditable service as of August 12, 1989.
North Carolina also offers a homestead property tax exemption for eligible residents. The state excludes from property taxes a portion of the appraised value of a permanent residence, but in order to qualify, the owners must occupy the home and be aged 65 or older or totally and permanently disabled.
Retiring in South Carolina
Like North Carolina, South Carolina does not tax Social Security benefits but does tax other forms of retirement income, and the state's income tax rate ranges from 0% to 6.4%. However, individuals over the age of 65 can claim a $10,000 taxable income deduction on retirement income, according to SmartAsset.
There’s also no inheritance or estate tax, and property taxes are on the low side. For homeowners 65 and older, the state's homestead exemption allows the first $50,000 of a property's fair market value to be exempt from local property taxes.
There is a dark side concerning taxes in South Carolina — sales taxes. Statewide, the rate is 6%. However, localities can add as much as 3%, potentially topping out at a 9% hit to your wallet, though the average combined rate is 7.499%, according to the Tax Foundation.
Good news for retirees eyeing North Carolina as a landing pad for their golden years: State residents 65 and older can, on a space-available basis, audit classes tuition-free at the campuses of the University of North Carolina, as well as the state’s community colleges.
Registration fees are waived, too, but there may be an application fee, depending on the college. Want to earn college credit? Residents 65 and older can take as many as six hours of for-credit courses for free at the state’s community colleges each semester.
It’s even better in South Carolina. All South Carolina residents 60 and older can attend any state-funded college tuition-free on a space-available basis. This includes courses taken for credit or audited. You’ll have to apply for enrollment to the school you are interested in attending, and you’ll be on the hook for any course fees, textbooks and other mandatory materials.
Check out our Free (or Cheap) College for Retirees in All 50 States guide to learn more about education options in other states.
It’s not like hurricanes are unexpected in North Carolina and South Carolina. After all, the region’s professional hockey team is named, well, the Hurricanes.
Anyone who’s visited the Carolinas on vacation knows that major weather events are baked into coastal living. You’ve seen the street signs pointing out hurricane evacuation routes. In 2020, Tropical Storm Isaias (downgraded from hurricane status) pounded the Carolinas before moving into the Northeast, and in 2019, Hurricane Dorian made landfall in North Carolina.
The last hurricane to touch down in South Carolina was last year, when Hurricane Idalia wreaked havoc, causing a damaging storm surge across portions of the SC coast. In 2022 Hurricane Ian also made landfall near Georgetown, SC.
So does that mean you must have hurricane insurance as a homeowner in the Carolinas? No. In fact, there isn’t any, according to Armistad Insurance Services of Raleigh. Instead, homeowners combine homeowners insurance — making certain it includes windstorm coverage — with flood insurance obtained by FEMA’s National Flood Insurance Program.
According to ValuePenguin, flood insurance costs an average of $751 a year in South Carolina and an average of $916 in North Carolina. The national average is $818 per year.
Oh, and there’s a hurricane deductible, typically around 5%, built into homeowners’ insurance policies in 19 states, including North Carolina and South Carolina. If a house is insured for $300,000 and has a 5% deductible, the first $15,000 of a claim must be paid out of the policyholder’s pocket, according to the Insurance Information Institute. The details of hurricane deductibles are spelled out on the declarations page of homeowners policies.
Baby-chasers? Yup. It’s a thing. According to market research firm Meyers Research, these are boomers who are following their kids (and grandkids) who have moved to the Carolinas for lucrative jobs, usually in the Charlotte area (there's even a baby chaser index).
Charlotte, ranked No. 1 on the baby chaser index in 2020, No. 3 in 2021 and No. 4 in 2022, is home to top employers including Bank of America, Lowes, Red Ventures and Wells Fargo. In 2016 alone, more than 26,000 millennials (age 23 to 38) moved to Charlotte, chasing their careers. And from mid-2021 to mid-2022, about 113 people moved to the Charlotte Region every day. Raleigh was No. 2 on the baby chaser index in 2021 and 2022.
And many of these baby-chasers are monied, Meyers Research found, especially those who sell their long-time homes in the Northeast, tap the more affordable real estate market in North Carolina and have money to pocket.
And the Charlotte area is rising to the rush. Suburban Lancaster County is a hotbed for boomers settling into ever-growing numbers of active adult communities, including Tree Tops by Lennar, according to Meyers. The top-selling adult community in the county, Meyers says, offers 19 different floor plans for ranch homes. Prices currently range from $284,999 to 620,999.
In 2023, Columbia, South Carolina made SmartAsset’s list of 15 cities millennials moved to in 2022. If baby-chasing boomers follow, there are over 30 retirement communities in Columbia.
The shortlist is a long one. The Carolinas are actively recruiting retirees, and local governments are friendly to developers of the numerous over-55 communities that surround beach and mountain communities.
U.S. Census Bureau population estimates from April 2010 to July 2019 show:
- The region straddling the North Carolina-South Carolina border that includes Myrtle Beach, Conway, and North Myrtle Beach grew a whopping 32.6% last decade with the arrival of 122,581 new residents.
- Raleigh, N.C.’s population grew by 16% with the arrival of 180,756 new residents.
- South Carolina’s Hilton Head Island-Bluffton-Beaufort region’s population grew 15.6%, with 29,093 new residents.
- Charleston-North Charleston, S.C., gained 101,288 new citizens in that time frame, a 15.2% growth rate.
Popular retirement towns in North Carolina include Brevard and Asheville in the mountains, New Bern and Oak Island, as well as Southport, Carolina Beach and Chapel Hill.
Retirement communities also dot some of the top retirement destinations in South Carolina as well, including popular destination towns Georgetown, Spartanburg, West Columbia, Greenville and Hilton Head Island.
When the kids were young, we’d escape the cold of upstate New York for spring breaks in Myrtle Beach. It’s a popular tourist destination, and also an increasingly popular retirement destination.
There are several dozen active adult retirement communities in the Myrtle Beach area, including Myrtle Beach Golf & Yacht Club, with more than 1,000 homes; The Bays at Prince Creek, with 799 homes; and Del Webb at Grande Dunes Myrtle Beach, a still-growing 700 home community wrapped around the Intercoastal Waterway.
And retirees will find plenty of beach to roam along the Grand Strand, a 60-mile arc of beach that stretches across the Carolina coast around Myrtle Beach. Beaches around Hilton Head are also popular with local retirees, especially in the fall, when tourism drops off.
The North Carolina coast includes 300 miles of barrier-island beaches, and VisitNC.com says these are the 25-plus best. And we’d be remiss if we didn’t mention the Outer Banks.
Golfers note: North Carolina runs hot with almost 580 courses. There are more than 350 courses in South Carolina, according to DiscoverSouthCarolina.com.
Asheville’s ceaseless charm, laid-back vibe, and four distinct seasons atop the Blue Ridge mountains make the arts-oriented town a perfect (and popular) place to lay down retirement roots.
“The city of Asheville and the surrounding area of western North Carolina have long attracted retirees for the natural beauty, welcoming vibe and active lifestyle. . . consistently ranking among America’s top retirement choices,” says Realtor Terri King, president and owner of Coldwell Banker King in Asheville.
UNC-Asheville is a small campus of about 3,700 students, but it has an outsize influence on retirees. The Osher Lifelong Learning Institute, an acclaimed learning community dedicated to promoting lifelong learning, offers more than 350 courses a year, usually in six- to eight-week terms. In the past, one of the institute’s most popular programs, according to director Catherine Frank, was its Creative Retirement Exploration Weekend; join the interest list to get more information on the next CREW event.
The weekend is designed for working people who are considering relocating when they retire. It’s an influencer, though fewer than 10% who attend the weekend end up moving to Asheville, Frank says, but they are “our most faithful volunteers.”
But mountain-loving future retirees shouldn’t limit themselves to Asheville. Nearby small towns are also charming and extremely affordable, including Hendersonville, Weaverville, Black Mountain and Brevard.
