By Antonio Porretta
For some people, the choice of where to retire isn’t a question—they retire in the same state they lived in for most of their lives. But many people choose to pack up and spend their latter years in a new and different location. Maybe they want to move closer to the grandkids or live in a warmer climate for health reasons. Regardless of why people choose to retire in a particular location, it’s important to fully understand the financial impact of the state you live in for your “golden years.â€
For North Carolina retirees, here’s what you need to know about our state’s cost of living so you can fully enjoy your retirement.
Average Cost of Living
According to a recent survey by MERIC, North Carolina ranks as the 24th least expensive state to live in—so about average. That’s not too bad, especially if you choose to live in a more rural area of the state, reducing your living expenses even more. But cost of living is more than just housing. To better understand what your overall expenses may be, it’s important to consider the following categories when calculating your retirement needs:
Housing Costs
An abundance of housing options in our state allows for more affordability. The average monthly housing costs in North Carolina are between $892 and $1,844, with the median monthly mortgage at $1,397. Since many retirees have paid off their mortgage, they can save a lot in this area, but will still need to account for utilities (averaging around $371 per month), homeowners insurance, and property taxes.
Housing costs can vary greatly across the state, however, so it’s important to consider where you live and if your retirement budget has room for your city’s cost of living. If not, it might be worth it to move to a less expensive area. But overall, housing costs in North Carolina are relatively low compared to the rest of the country.
Healthcare Costs
Another important cost-of-living factor is healthcare. According to the Fidelity Retiree Health Care Cost Estimate, the average retired American couple aged 65 in 2023 may require approximately $315,000 of after-tax savings to cover their healthcare costs in retirement. This amount will vary widely based on individual needs, but it’s important to consider that North Carolina has some of the highest healthcare costs in the nation, ranked number 42nd in the country. This could mean higher healthcare costs for retirees living here compared to other states.
Despite the higher healthcare costs, North Carolina is below the national average for long-term care and homemaker services. The average annual cost for in-home healthcare in North Carolina in 2023 is $55,829, while a private room in a nursing home costs an average of $104,552 per year, which is below the national median of $63,111 and $115,007, respectively.
Taxes
While North Carolina does have state tax, the good news is that it’s lower than most states at a flat rate of 4.99%, which will decrease to 3.99% by 2027. Another positive is that retirees are not taxed on Social Security benefits, inheritance, or estate taxes, but most other retirement income sources are taxed, including 401(k)s and IRAs. This makes North Carolina a moderately tax-friendly state for retirees.
Regarding property taxes in North Carolina, the average rate is .70%, which is lower than the national average of .99%. Since property taxes are determined by the local government and not the state, they are based on the value of the property, which is assessed at least once every 8 years. This means your taxes may be higher or lower depending on where you live within the state and the value of your home as it increases or decreases over the years. One benefit for seniors is that they may be eligible for the homestead property tax exemption, which would reduce their home’s assessed value by 50% or $25,000, whichever is greater.
We’re Here for You
While there are pros and cons to retiring in North Carolina—just as in any other state—overall it’s one of the top retirement-friendly states. U.S. News & World Report’s annual “Best Places to Retire†list reveals that 3 North Carolina cities made the list of only 25 cities in the country.
Working with a qualified financial professional with years of experience in North Carolina can help make retirement planning decisions easier. At Blackbridge Financial, we are here to walk you through every stage of your financial plan, so you can focus on what matters the most—taking care of you and your family. Email me at [email protected] or call 704.960.9646 if you’re ready to take the next step in your retirement planning journey.
About Antonio
Antonio Porretta is an independent wealth manager at Blackbridge Financial with over 20 years of experience. He specializes in helping people create, distribute, and preserve their wealth. Antonio received an executive MBA from Saunders College of Business at Rochester Institute of Technology in 2007 and also holds the Accredited Asset Management Specialist℠, AAMS® designation. Originally from Rochester, NY, Antonio has been a resident of Harrisburg, NC, since 2007. Outside of work, he enjoys playing soccer and tennis, coaching, and spending time with his wife, Laura, and their children, Cristiano, Victoria, and Matteo. To learn more about Antonio and how he can make a difference in your financial life, visit www.blackbridgefinancial.com.
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This material was prepared for Antonio Porretta’s use.