Getting close to retirement is an exciting time. But you also need to handle some planning if you want to make sure your golden years are comfortable. Often, what it takes to achieve your perfect lifestyle can vary, particularly depending on where you live. If you think that North Carolina is the ideal destination for you, here’s what you need to know to make sure you can retire well in North Carolina.
Cost of Living
When you are exploring states for retirement, taking a moment to check out the state’s cost of living scores is a great place to start. It lets you estimate how affordable an area is, both in comparison to the national average and to other states.
Assessing the cost of living scores is pretty simple. The national average is always 100. Scores above 100 mean that a state or area costs more than average, while scores under 100 show that a region is cheaper. When comparing two states, the one with higher scores is more expensive.
North Carolina has an overall cost of living score of 96.1. Since that is close to the national average, it’s considered a moderate score.
When it comes to individual categories, the Tar Heel State is mainly near average. Groceries, utilities, and transportation are at 98.0, 99.4, and 94.9, respectively.
One spot where North Carolina is more expensive is healthcare. In that category, the Tar Heel State has a score of 111.8, a sign that health-related costs are markedly above average in the area.
However, a category where North Carolina shine is housing. The housing score is just 87.1, a sign of overall affordability. This is supported by the state’s average home value of $231,166, which is a full $41,280 below the national average of $272,446.
Tax Considerations[embedded content]
Another important aspect of living in a particular state that you want to look at is taxes. How much you’ll owe in taxes impacts your budget, as well as how long your retirement savings will ultimately last. As a result, you want to understand a state’s rates well before you move.
When it comes to income taxes, North Carolina doesn’t use a bracketed system like the federal government. Instead, it has a flat rate of 5.25 percent.
While the Tar Heel State does exempt Social Security from taxes, all other retirement income is potentially taxable. That includes money from 401(k)s, IRAs, and most other federally taxable retirement accounts.
For sales tax, the base rate is 4.75 percent. However, cities, counties, and local municipalities can add to that, bringing the rate up to 6 to 7 percent in most areas, though potentially higher in a few locations.
Property taxes in North Carolina tend to be on the lower side. Additionally, there are a few programs that can reduce the burden for certain households. For example, there is a homestead exemption for elderly, disabled homeowners that may benefit some retirees.
Part-Time Job Opportunities
Many retirees don’t plan to altogether leave the workforce. Instead, they simply transition, snagging a part-time job to help support their golden years, boost their retirement savings, or keep them active.
Often, a state’s unemployment rates can give you some insights into the availability of part-time jobs. When rates are low, opportunities tend to be accessible. When rates are higher, finding a position can be challenging.
During the rise of the pandemic, the Tar Heel State hit 13.5 percent (April 2020), which was slightly below the national average of 14.8 percent. North Carolina also recovered faster than some other areas, getting back down to 5.7 percent by February 2021, a moment when the national average was 6.2 percent.
While COVID-19 does make the situation a bit more complex, North Carolina is making positive progress quickly. As a result, part-time jobs are generally available, which is a boon for retirees.
Best Cities for Retirees in North Carolina[embedded content]
The city you pick plays a big role in your retirement, as it impacts your access to amenities, recreation, and more. If you aren’t sure what cities may be right for you, certain options are worth considering.
Asheville could be an excellent choice for anyone who wants an outdoorsy lifestyle. It’s near the Great Smoky Mountains National Park and is near the base of the Blue Ridge Mountains. Plus, it’s got a great foodie culture and a rising art scene, making it ideal for anyone who wants an enriching experience.
If you prefer a larger city, Charlotte might be your ideal destination. The area is growing quickly but is still reasonably affordable. You can access plenty of amenities and entertainment options without having to break the bank. Plus, there are several professional sports teams, which could make it an even better choice for fans.
For retirees looking for a small town, try Brevard. It’s got a quaint, quiet feel, is highly walkable, and it close to Pisgah National Forest. The city actually mentions promoting “a high quality of life” in their mission, and that driving force shows in everything the area does to support its residence.
How Much Money You Need to Retire Well in North Carolina
Since the Tar Heel State has a moderate cost of living, you can retire well in North Carolina with a middle-of-the-road budget. Generally, if you have access to around $60,537 a year, you should be in pretty good shape. With that, covering your needs shouldn’t be an issue, and you should be able to shoulder some wants, too. That way, you can have a rewarding retirement, ensuring your golden years are just what you envisioned.
Can you think of any other tips or insights that can help someone retire well in North Carolina? Share your thoughts in the comments below.
If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started. Check out these helpful tools to help you save more. For investing advice, visit The Motley Fool.