Updated February 2, 2012. Editors Note: This is the third in our series comparing various states as retirement destinations. Don’t miss the first, Florida vs. Arizona Retirement, or the second, Delaware vs. Maryland vs. Virginia vs. New Jersey. We welcome ideas for future comparisons.
The Carolinas are a red-hot retirement destination among baby boomers. Both states enjoy a favorable image. In recent years they have both become more desirable as a retirement destination than Florida, which suffers from associations with shuffleboard and foreclosures. In this comparison we will evaluate various factors for both states that affect retirement, letting our readers draw their own conclusions from the facts. As always, reader input is extremely important. We encourage you to use the Comments section below to tell your stories and express your preferences with your fellow members.
Population (Data from American Fact Finder-U.S. Census Bureau).
One obvious difference between the two states is the number of people – North Carolina has a much bigger population (9,561,558) than South Carolina’s (4,636,312). The over 65 population in South Carolina is 13.7%. North Carolina’s over 65 population is similar at 13.0% (the national percentage is 13.1%). Both states attract significant numbers of retirees from beyond their own borders, usually from the northeast or Midwest.
Economics and Home Prices
One reason why the Carolinas are popular for so many retirements is a lower cost of living. Both states have significantly lower home prices than the Zillow 2012 Home Value Index of $147,800. South Carolina’s median home value using the Zillow Home Value Index was $114,700 in early 2012. North Carolina’s Index was $130,000 in early 2012. The 2010 median HH income in North Carolina was $46,107, slightly higher than South Carolina’s median household income of $42,018. By comparison the national household income median was $50,046. The cost of living in North Carolina is 21st highest in the nation for North Carolina and 24th for SC. According to the Census Bureau both states in late 2011 had some of the highest unemployment rates in the nation – 9.5% for South Carolina and 9.9% for North Carolina.
There are no significant climate differences between these 2 states. The most northern parts of North Carolina will have slightly colder winters than the most southerly part of SC, but the difference will only be a few degrees. What differences there are mostly stem from the many different climates present within each as they go from beach to mountain. Here are a few representative temperatures for cities within these states:
City(State) Avg July High Avg Jan Low
Asheville (NC) 84 27 (West)
Charlotte(NC) 90 32 (Central)
Wilmington (NC) 90 36 (East)
Greenville (SC) 89 31 (West)
Columbia (SC) 95 36 (Central)
Charleston (SC) 89 42 (East)
SC is a more tax-friendly state for retirees than is NC. According to the Tax Foundation, SC has the 37th highest tax burden in the nation, whereas NC’s is 16th.
SC residents pay a median $689 in property tax, compared to $1209 in North Carolina. Homeowners in SC over 65 can usually deduct $50,000 of valuation on their property taxes. In NC there is a property tax homestead exemption for people over 65 who meet certain income criteria, as well as a circuit breaker program for eligible people over 65 which limits property taxes to 4 or 5% of your income.
South Carolina has a maximum tax rate of 7%, whereas NC’s is 7.75%.
Social Security and Income Tax Exemptions for Seniors
Neither state taxes Social Security payments. South Carolina, however, is much friendlier to retirees than its namesake to the North. Its residents over 65 are entitled to an exemption of $15,000 in calculating income for state tax purposes, of which up to $10,000 can be retirement income. The SC Guide to New Residents is the most helpful one we have ever seen.
NC offers some income tax exemptions for pensions, particularly for those with careers in the public sector and/or military pensions. Military and other government pensions are exempt if there was 5 years of service by 1989, otherwise the limit is $4000. The somewhat confusing pension exemption rules are located on this NC State Retirement page.
In SC the sales tax is 6% and in NC it is 5.75%. Both states permit localities to add on to that tax.
Estate and Inheritance Taxes
There are no estate or inheritance taxes in South Carolina or North Carolina (NC repealed its estate tax in 2013). Note: Taxes are complicated and the laws change quickly. Consult state Department of Revenue Guides and/or your tax professional before making important decisions.
Physical Environment and Diversity
As with population, North Carolina also has a much bigger geographical area – 54,000 square miles as compared to SC’s 32,000 miles. Both have a long coast line with beautiful beaches and/or waterfront on large bays. The Cape Hatteras region of NC is quite remarkable, as is Myrtle Beach and Hilton Head in SC. North Carolina has a larger and more pronounced western mountain area with four seasons and the Blue Ridge, Great Smoky, and Black Mountain ranges. The highest point in NC (and the eastern U.S.) is Mt. Mitchell at 6,684 ft.; Sassafras Mountain is SC’s highest peak (3,560 ft.).
Places to Live and Retirement Popularity
Both states have several important cities and numerous interesting mid-sized cities. Both states have college towns, such as Chapel Hill and Durham in NC and Clemson in South Carolina. North Carolina has slightly more towns on Topretirements’ list of 100 Best Retirement Towns (11) than does SC (8). Asheville (NC) is by far and away the most popular retirement town at Topretirements. In addition to Asheville those include Winston-Salem (#12), and Mt. Airy (#24) and Chapel Hill (#30). South Carolina’s most popular places to retire include Beaufort (#8), Summerville (#31), Myrtle Beach (#25), and Bluffton (#28). Here is the full list of our most popular 100 best retirement towns.
Choice of Active Communities
North Carolina and South Carolina are both loaded with active adult communities. At Topretirements we count over 110 communities in both our North Carolina Directory of Active Communities and in the South Carolina Directory of Active Communities. Whereas the active communities in NC are dispersed throughout the state in areas like Asheville, New Bern, Charlotte, and the Research Triangle area; South Carolina’s are clustered mostly along the coast, from Myrtle Beach to Charleston. In either state the choices are many and varied, with many of them relatively new.
The bottom line
North Carolina and South Carolina share numerous similarities in addition to a similar climate and topography. Indeed, many retirees say they are contemplating moving to the “Carolinas” for retirement, and don’t often specify one of the states.
Looking for differences, we could generalize and say North Carolina is a bit more diverse. It has more large cities to choose from, such as Charlotte or Winston-Salem. NC has taller mountains and more towns in mountainous areas, if that is what you are looking for. South Carolina might have the most interesting city, Charleston. Comparing the negative side of each state, North Carolina is often named as a problem state for retirement, mostly due to its tax structure and fiscal health. South Carolina is probably less of a melting pot than its northern cousin, and more of a “southern” state.
So which state is more popular? Regardless of which state wins the retirement sweepstakes, both are doing very well. A Del Webb study found that the Carolinas are now a more popular retirement destination than Florida. At Topretirements our North Carolina retirement guide (#2 after Florida) is more frequently accessed than is our SC retirement guide (#4). The differences between the Carolinas are subtle. Both contain some wonderful places to retire, if the mid-Atlantic region is the region where you would like to retire. Rather than take sides on the issue, we recommend that you visit cities and towns in both states and see if you can’t find the place of your dreams. Fortunately, the two states are contiguous- in a few trips you should be able to get a good idea of the places that could offer you a happy retirement experience.
The Best of the Best Places to Retire
How North Carolina Climbed over Florida as #1 Retirement State
Best States for Retirement
State Retirement Guides
California Retirement 101
Florida Retirement 101
Comparison: Retirement in Arizona, New Mexico, and Utah
What state do you prefer? Let us know in the Comments section below.