South Carolina ranks among the most popular retirement destinations in the country, and for good reason. Here is what affluent couples should know before making the move.
The Palmetto State is becoming a popular retirement destination
South Carolina is one of the top retirement destinations in the U.S., drawing thousands of new residents each year. In 2025, the state ranked first nationally for net growth in its population aged 65 and older, registering a net gain of roughly 5,427 individuals in that age group. The Greenville area has been a particular beneficiary of this trend, with robust influxes of retirees drawn to the Upstate’s proximity to the Blue Ridge Mountains, welcoming communities, and a growing base of health care and cultural amenities. Godsey & Gibb Wealth Management, a fiduciary advisory firm with an office in Greenville, SC, has been serving the community for years, helping approaching and current retirees synchronize investment management, tax planning, and estate planning decisions.
South Carolina income taxation, and how it compares to other states
South Carolina’s state income tax structure has evolved substantially. Historically, rates ranging from 0% to 7% placed it in the middle of the pack. However, legislation signed in April 2026 (H.4216) simplified the system to just two brackets: 1.99% on South Carolina taxable income up to $30,000, and 5.21% on income above that threshold. Florida and Texas, of course, charge no income tax at all, but South Carolina’s combination of low cost, lifestyle appeal, and increasingly competitive tax rates makes South Carolina tax friendly for retirees who weigh more than just one variable. These changes matter most for couples with substantial retirement savings from which they need begin withdrawing, as well as those with investment income flowing through taxable accounts.
How South Carolina Taxes Social Security and Retirement Savings
South Carolina does not tax Social Security benefits at the state level. Social Security retirement benefits are fully exempt, which is particularly attractive for couples who have maximized their Social Security income. The state does not change their social security taxation based on income, unlike the federal government, where benefits can be partially taxed depending on provisional income thresholds.
For other forms of retirement income, South Carolina offers structured deductions. Residents aged 65 and older can deduct up to $10,000 of qualified retirement income (from IRAs, 401(k)s, pensions, and other retirement accounts) from South Carolina taxable income. Before age 65, the deduction is limited to $3,000.
On capital gains, South Carolina excludes 44% of net long-term capital gains from taxable income. This lowers the effective state rate on appreciated assets meaningfully. For a couple selling a concentrated stock position or a second home, that exclusion can yield a noticeably lighter burden than states that fully tax capital gains.
Property tax rates and the impact of home prices
South Carolina’s effective property tax rate is approximately 0.49%, placing it well below the national average and reinforcing the state’s reputation for low property taxes.
South Carolina offers a homestead exemption that provides meaningful property tax breaks for older homeowners. Homeowners aged 65 and older can exempt the first $50,000 of their home’s fair market value from property taxes, saving several hundred dollars annually depending on local millage rates.
A less discussed but financially significant nuance involves assessment ratios. South Carolina residents who establish legal domicile receive a 4% assessment ratio on their primary residence, compared to 6% for non-domiciled owners. On a $600,000 home, that difference increases assessed value by $12,000, translating to meaningfully higher annual taxes for those who do not properly establish domicile. Domicile requires more than simply owning property; voter registration, a South Carolina driver’s license, and demonstrated intent all factor in. For affluent couples splitting time between states, getting this right is essential to accessing the full range of tax benefits the state provides.
Taxes on inheritance and your future estate
South Carolina imposes no estate taxes and no inheritance tax at the state level. Heirs inherit assets free of any state-level death tax, which is a significant advantage for couples focused on multi-generational wealth transfer. South Carolina is a common law property state, meaning that upon the death of one spouse, only the decedent’s half of the property receives a step-up in basis to fair market value, rather than the entire property. This reduces capital gains tax liability for the surviving spouse or heirs who later sell appreciated holdings, but is not as generous as community property states like Arizona. For couples with substantial retirement accounts and taxable portfolios, the absence of a state death tax, combined with the current federal exemption of roughly $15 million per individual, provides considerable planning flexibility during your golden years.
Let Godsey & Gibb Help You Navigate Relocation and Retirement Complexities
Retiring in South Carolina involves more than choosing a community with golf courses, warm climate, and an active lifestyle. It requires coordinating retirement account withdrawals, domicile establishment, property assessment elections, and estate documents under a new state’s laws. Working with a financial advisor or CERTIFIED FINANCIAL PLANNER® who understands both your origin state and South Carolina can provide peace of mind that nothing falls through the cracks. Many retirees discover that what makes South Carolina a compelling retirement destination is not any single advantage, but rather the cumulative effect of thoughtful planning across income, property, and estate considerations.
Godsey & Gibb has Wealth Advisors based in the Greenville, SC area who support clients across the Upstate, Lowcountry, and various other South Carolina regions. Our team provides synchronized financial planning, tax preparation, and investment management under one roof. If you already reside in the area or are considering relocating, reach out now so we can help create a relocation game plan tailored to your South Carolina retirement.