May 4, 2010 and updated April 6, 2015 — Florida and Arizona have long been the favorite 2 states for retirement migration. A study from Del Webb, however, finds that the Carolinas, North and South, might have usurped FL and AZ’s traditional positions as the favorite retirement destination states. This article will concentrate on how and why North Carolina overcame Florida to become the number 1 retirement destination in some people’s eyes. In addition to trying to explain how this important shift has come about, we will also review some of the top places to retire in this diverse state. We encourage you to read all of the articles in our Dueling Retirement series (listed at the end of this article), including: Dueling Carolinas: NC vs. SC
North Carolina’s Secret Sauce
A warm winter climate has traditionally been the most important reason for choosing a retirement state. That preference is a key reason why AZ and FL have always been at the top of the retirement state pyramid. Since winters aren’t all that warm in the Carolinas, North Carolina’s overtaking Florida in retirement popularity represents a profound change. The trend is so pervasive that it has spawned a new term, “half-back”, which describe retirees who retired to Florida from the northeast only to later move “half way back” home to the Carolinas. So what has changed among retirees to bring this phenomenon about, and just what is in North Carolina’s secret retirement sauce?
In a recent Del Webb survey among baby boomers on retirement preferences the top reasons for choosing where to live in retirement were cost of living, health care, climate, and opportunities for culture and recreation. Family and friends were further down the list. Boston College’s Center for Retirement Research found the same general reasons for retirement moves, but in a different order: family, financial, better location, leisure/climate, and health. Looking at these and related reasons, is there a logical explanation why boomers now prefer North Carolina over Florida for retirement?
Both NC and FL are fairly low tax states. Florida has one important edge – it has no state income tax. North Carolina, which improved its tax friendliness beginning in 2014, does not tax social security income. It now has a flat rate income tax rate of 5.75%. Each individual gets a $7500 deduction. Neither state has inheritance or estate taxes. In both states, full-time residents can take advantage of homestead laws which protect them from unreasonable property tax increases (there are certain restrictions in North Carolina). Both states have sales taxes (6% in FL vs. 4.75% in NC). Both states have fairly low property taxes, at least compared to the northeast. North Carolina’s property tax as a % of home value is .85%, slightly lower than Florida’s at 1.06%. Although the Tax Foundation ranked North Carolina as having a higher tax burden than Florida’s in 2011, they are probably much closer as of 2014.
Florida certainly has the edge for people who prefer warmer winters. Even in northern Florida the winters are mild – vegetable gardens grow in January and it rarely snows or goes below freezing. In southern Florida shorts and short sleeves are usually comfortable on January and February days, although there can be occasional cool spells. North Carolina has a much more diverse climate than Florida’s. The coast is a bit cooler in summer and a bit warmer in winter than elsewhere in the state. It rarely goes below 40 along the coast, but can go into the teens in the Great Smoky and Blue Ridge mountains in the western part of the state, where there are ski resorts. People who want 4 seasons will find them in North Carolina, and folks who want to go swimming or play golf in January will usually be able to do so in Florida. Both states have climates that permit a wide range of activities year round. Florida has had a number of hurricanes in the last 10 years, and those storms have led to very high insurance rates.
Economy and Cost of Living
Both states had difficulty after the 2007 recession. North Carolina probably has a more diverse economy than Florida’s top-heavy concentration on tourism and construction. Cost of living in both states is middle of the road: Florida’s is #27 lowest and NC is #23. In North Carolina the Zillow Home Value Index statewide was $146,700 in early 2015, quite a bit lower than Florida’s $169,700 Index (data from Zillow.com – the U.S. Value Index was $178,700).
Like Florida, North Carolina has an ample, but not quite as long coastline, where people can enjoy the beach and access to bays and the ocean. NC has pastoral places to live like the sandhills around Pinehurst in the central part of the state, as does Florida in the panhandle and center of the state. North Carolina, however, has towns in its western mountains where people who crave mountains can find their ideal retirement. At a towering 345′ above sea level Britton Hill is the tallest peak in Florida, whereas Mt. Mitchell in NC stands at 6,684′. Overall: NC wins for geographic diversity.
Where to Live
Both states have interesting towns to live in. Both have college towns – like Chapel Hill in NC and Gainesville in FL. Each state has large cities to live in like Charlotte, Tallahassee and Miami. Each also has interesting towns like Mount Airy or Key West. There are plenty of cultural activities to be had in either state, if one chooses a town carefully. Because of cheap land and plenty of willing retirees, both states have hundreds of new and existing active adult communities to choose from. North Carolina has an edge with Asheville, the most popular retirement destination in the country. Florida, however, has dozens of towns that are dominated by and desirable for retirees. Our conclusion: North Carolina offers more diversity in terms of the available living environments and scenery but Florida has many more communities that are dominated by retirees.
Both states have a wonderful collection of medical facilities and professionals, particularly in the larger cities. Doctors and hospitals tend to go where the patients are, and since both states have a growing population and (at least until recently) booming economies, they are both well-supplied medically.
So Why is North Carolina coming out on top for retirement preference?
After analyzing all of these factors we had hoped that we would find a compelling reason why North Carolina is beating the pants off Florida in attracting retirees. Unfortunately, that is not the case. On most factors the states are about even – each one comes out ahead on a few points and behind on some others. Conclusion: there must be some intangibles at work here.
The Cool Factor
These are strictly our opinions, but here are some reasons why North Carolina’s Secret Sauce is giving Florida a licking in the retirement department:
– Florida has an image problem. Too many movies have parodied retirement life in Florida – from “Cocoon” to “In Her Shoes”. A lot of people don’t want to be associated with the blue haired, shuffleboard playing set that is displayed in popular culture about Florida.
– Florida is tacky and crowded. By no means is the whole state that way, but there are many, many towns where everything is new and every store is a big box or a chain. Some people are rejecting that barrenness, along with the intense traffic and development that comes with unchecked growth.
– On the positive side, North Carolina has a cool factor. Towns like Asheville, New Bern, and Chapel Hill have good reputations as interesting places to live. North Carolina represents something new and undiscovered, with the advantage of being not too far away or too different from the northeast many retirees are moving away from.
Most popular retirement towns in North Carolina
Here are the most popular retirement towns in North Carolina as determined by page visits to their reviews at Topretirements.com:
Asheville – In the western mountains – the #1 retirement spot in the country
Beaufort – An old seaport (and Blackbeard the Pirate’s retirement town) with considerable charm
Chapel Hill – A lively college town and home to the University of North Carolina
Hendersonville – Small town in the Blue Ridge National Heritage area
Mount Airy – The fictional home of Mayberry in the mountains
New Bern – Smaller and more charming, near the coast
Pinehurst – Charm and understated elegance in a legendary golf community
Southport – An active fishing village in southern North Carolina – where “Dawson’s Creek” was filmed
Winston-Salem – A larger city that is attracting retirees
More North Carolina retirement towns
For further reference:
North Carolina Retirement Guide
Florida Retirement Guide
7 States to Avoid
Sun Setting on the Sunshine State
Where are Baby Boomers Retiring
Tax Friendly States for Retirement
Dueling States: NC vs. SC
Dueling States: AZ vs. FL
Dueling Mid-Atlantic States: DE vs. NJ vs. MD vs. VA
California Retirement 101
Retirement in the Southwest: AZ, NM, and Utah
The Pacific Northwest: Oregon vs. Washington
What do you think?
Be sure to tell us what you think. Which state do you prefer – and is there one you would never, ever, consider? Use the comments section below.