If you’re contemplating moving to the Carolinas, you’re in good company. South Carolina was ranked the third-most moved-to state in 2021, behind Vermont and South Dakota. The sister states provide a lovely mix of bustling cities, toney suburbs, and unspoiled wilderness. With a robust financial plan and wealth management from a registered investment advisor, your financial life can flourish.
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Here are the answers to some FAQs that may help you better anticipate making your move.
How Does Moving to the Carolinas Affect Sources of Income?
Post-COVID, you should reassess your mindset about job location and retirement. Millions of people now work from home for businesses that are hundreds or thousands of miles away. For these folks, moving to the Carolinas or anyplace else makes little difference to their sources of income.
Physicians, educators, lawyers, scientists, entrepreneurs, financial service providers, and many other professionals have little trouble finding gratifying employment in the Carolinas. Beckoning destinations include the Research Triangle adjacent to Duke University and North Carolina State.
Cities with thriving business communities include Charlotte, Greenville, Raleigh, and Spartanburg. Popular tourist destinations are Charleston Hilton Head, Sea Island, Durham, Greensboro, and Winston-Salem, supporting a robust tourism industry.
Read: How to Save More, Quickly – 5 Tips from a CFP® in Greenville, SC.
How Does Moving to South Carolina Affect My Taxes?
South Carolina has a state income tax ranging from 0% to 7%, with tax brackets that adjust each year for inflation. The state’s simplified tax structure accepts, with few modifications, the same adjustments, exemptions, and deductions allowed on your federal taxes. As a tax and investment advisor firm, allow us to share some good news: South Carolina does not tax your Social Security benefits.
South Carolina Tax Deductions
State tax deductions for SC include:
- A deduction from any source of income once you’ve turned 65
- Property sold in another state
- A 44% deduction on net long-term capital gains
- A portion of your qualified retirement income that you included in your South Carolina taxable income (For those under age 65, you can claim up to $3,000, whereas older retirees may claim a deduction of up to $10,000)
- Military retirement income and reserve pay
- Interest from federal obligations
- A deduction for each dependent claimed on your federal tax return who hasn’t reached the age of six as of December 31 of the tax year
- Adopted children with special needs
- Gift contributions to a qualified 529 Plan
South Carolina Tax Credits
Tax deductions reduce your taxable income. But tax credits are superior because they reduce your tax payable on a 1:1 basis. The state tax credits include:
- Married couples in which both spouses work
- Tuition paid to South Carolina colleges
- The SC Motor Fuel User Fee or preventative maintenance costs, whichever is less
- Payments for in-home nursing care
- Out-of-state income tax on income taxable in both states
- Child and dependent care
- The South Carolina Earned Income Tax Credit if you earned the Federal Earned Income Tax Credit on your federal return
Tax credits may be nonrefundable, allowing you to carry forward excess claims or immediately refundable to the taxpayer.
Be mindful of the tax law changes for South Carolina for 2022 as you plan.
Is There a Difference Among Tax Benefits Depending on Your Age and Retirement Status?
Those who’ve reached the age of 65 receive several tax benefits in South Carolina.
- You can exclude $10,000 of your retirement income, which is $7,000 more than allowed to younger residents.
- You can deduct $15,000 of other taxable income ($30,000 if you file a joint return).
- You can claim a homestead exemption on your local property tax of up to $50,000 of its fair market value. South Carolina has the sixth lowest median property tax rate in the country.
- Veterans aged 65+ can exclude up to $30,000 military retirement income.
In addition to these post-65 tax benefits, South Carolina seniors do not pay income tax on their Social Security benefits (including disability). The state lacks an inheritance or estate tax, enhancing its desirability as a retirement destination. Need help with estate planning in the Carolinas?
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What Should Those Relocating Know About the Weather?
South Carolina has mild winters, especially on the coast, with average daytime temperatures around 60 degrees F. That should be a pleasant change for folks who don’t love the extreme chills of winter weather. As you head inland, temperatures drop and can reach freezing levels at night—so bundle up.
Summers can be hot and humid, especially downstate. The average summer high temperature is 90 F., but coastal areas are cooler. Expect afternoon thunderstorms and the occasional tornado. July is the hottest month, while January clocks in with the coolest temperatures.
Annual precipitation ranges from 40 to 80 inches, but don’t expect much in the way of snow. The summer months provide 14 hours of sunlight daily, whereas the winter months offer only 10.
The climate and weather in North Carolina aren’t much different from that of its sister state, with annual temperatures typically ranging from 33 to 89 F. Are you ready to put on your shades and hit the road yet?
Family Life: Pros and Cons of Moving Closer or Further to Family?
Some folks value a tight family lifestyle, full of time well spent with loved ones. Others prefer living a fair amount of space away from relatives. There are good reasons for either decision, and we respect each one.
Pros for Moving Closer
- You get more time to spend with family and watch young ones grow up.
- You’ll have a nearby support network with helping hands nearby.
- You’re less likely to miss your family’s major life events.
- You can reduce the costs of travel to visit family members.
Cons for Moving Closer
- You may sacrifice too much of your free time to interact with the family.
- You might have trouble establishing boundaries with family members.
- You might feel guilty if you can’t help a nearby relative.
- You might feel trapped by requests to attend to everything related to your family.
The pros and cons of not moving closer to family are the inverses of the above. The decision is deeply personal and is ultimately up to you.
If you move to the Carolinas, rest assured that you will have access to the best Carolina retirement planners. Our firm offers experienced investment advisors in Greenville, SC, to help you manage your finances and grow your wealth.
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