What’s it like to retire in the great state of North Carolina? The weather is mild and there’s plenty of natural beauty. But one of the most important factors to think about when considering retiring to North Carolina is their level of tax friendliness toward retirees.
In North Carolina, all Social Security and Railroad Retirement benefits are exempt from state income taxes, which is a great advantage for retirees relying on these sources of income. There is also no inheritance tax, estate tax, or military retirement benefit taxes in North Carolina.
However, other forms of retirement income such as withdrawals from retirement accounts and pension incomes are subject to taxation at North Carolina’s flat income tax rate of 4.75%.
Is North Carolina a Good Place to Retire Financially?
While North Carolina may not rank as the most tax-friendly state when compared to others like Florida, which provides more deductions, or Delaware, with no state or local sales taxes, it compensates with a cost of living that’s below the national average, as well as a moderate property and sales tax rate. As a result, generally North Carolina is a great place to retire financially.
Is NC or SC Better for Retirement Taxes?
While both states offer appealing tax benefits for retirees, South Carolina is usually better in terms of retirement taxes. South Carolina partially taxes retirement income, but retirees 65 and older can claim up to $10,000 in retirement income deductions from retirement accounts including pensions, 401(k)s, and IRAs. Retirees can also claim up to $15,000 in deductions from South Carolina’s state income tax.
At What Age Do Seniors Stop Paying Property Taxes in NC?
North Carolia offers property tax relief programs for qualifying individuals including older adults. The Homestead Exemption provides some relief for residents who are 65 and older or who are totally and permanently disabled. To qualify for this exemption, the homeowner must meet the income limit of $36,700.
What are the Pros and Cons of Retiring in North Carolina?
Retiring in North Carolina offers many benefits and some considerations that vary depending on personal preferences, financial situations, and lifestyle choices.
Pros of retiring in North Carolina include:
- Mild climate
- Diverse geography
- Lower cost of living
- Tax friendly
- Quality healthcare
Cons of retiring in North Carolina include:
- 4.75% income tax on pensions and withdrawals from retirement accounts
- Summer heat and humidity
- Hurricane risk
- Limited public transportation
Should You Consider Moving to a Retirement Community in North Carolina?
In addition to its retirement tax friendliness, North Carolina also offers a lower cost of living, abundant natural beauty, and a great climate. Many retirees enjoy resort style living in Continuing Care Retirement Communities, which allow them to receive any level of care they require from independent living to skilled nursing, all in one community.
If you would like to learn more, including seeing our retirement community prices, choose a community below to download a free information and pricing kit:
Matthews Glen
733 Matthews Glen Drive
Matthews, NC 28105
Tryon Estates
617 Laurel Lake Dr
Columbus, NC 28722
