North Carolina is frequently praised for its appealing qualities, such as its mild temperatures and diverse recreational opportunities. The state boasts beautiful beaches, scenic mountains and a variety of outdoor activities that attract many retirees.
North Carolina’s friendly communities and slower pace of life can be very appealing. However, while these factors make North Carolina a good option, Pennsylvania offers unique advantages that can enhance the retirement experience even further.
Does North Carolina Tax Social Security?
North Carolina is moderately tax-friendly to residents over 65, placing in the bottom third of states. In North Carolina, all Railroad Retirement and Social Security benefits are not taxed, which is a significant advantage for many retirees. However, Pennsylvania also provides favorable tax treatment for retirees.
In Pennsylvania, Social Security benefits are exempt from state income tax, with a flat tax rate of 3.07% — this is among the lowest rates in the country. This financial advantage improves the quality of life for retirees living in Pennsylvania, as they can allocate their resources toward leisure activities, health care and other essential needs.
For example, this would benefit older adults living at Cornwall Manor — a nonprofit older adult living community in Pennsylvania.
Does North Carolina Tax Pensions?
When it comes to pensions, North Carolina has a 4.5% income tax on pensions. Additionally, withdrawals from retirement accounts are fully taxed, and you’ll need to pay real estate taxes — which are around 0.7% of your property’s value. North Carolina cannot tax certain retirement benefits like the North Carolina Teachers’ and North Carolina Consolidated Judicial Retirement System.
Pennsylvania also has a favorable stance on pension taxation, with the average total sales tax rate among the lowest in the country. Withdrawals from retirement accounts are not taxed in this state. Pension income is exempt from state income tax for residents 60 and older, providing retirees with additional financial relief.
This exemption allows residents of Cornwall Manor to enjoy their retirement savings without the burden of state taxes, making it easier to maintain a comfortable lifestyle.
Retiring in North Carolina: Pros and Cons
While North Carolina has its share of benefits, it’s important to weigh the pros and cons. On the positive side, North Carolina offers:
- Beautiful beaches
- A variety of outdoor activities
- Friendly communities
- Slower pace of life
On the downside, it also has:
- Higher cost of living in certain areas
- Natural disaster risks — like hurricanes, tornadoes and flooding
- Humid climate
- Traffic congestion in urban areas
- Housing market inflation
In contrast, Cornwall Manor in Pennsylvania provides a different set of advantages. The cost of living in Pennsylvania is generally lower than in many parts of North Carolina, allowing retirees to stretch their budgets further.
Additionally, Cornwall Manor offers a close-knit community atmosphere where residents can engage in social activities, wellness programs and various recreational opportunities. Take a 360-degree virtual tour.
Does North Carolina Tax Military Pensions?
For military retirees, tax considerations are particularly important. North Carolina does not tax military pensions, which can be a significant benefit for those who served in the armed forces.
In Pennsylvania, military retirement pay is exempt from state income tax, allowing veterans to enjoy their retirement without the burden of additional taxes. Pennsylvania also provides a real estate tax exemption for honorably discharged resident veterans who are 100% disabled.
Cornwall Manor is home to many veterans who appreciate this financial advantage, as it allows them to focus on enjoying their retirement years.
Discover Your Ideal Retirement at Cornwall Manor
Ultimately, for those considering retirement, Pennsylvania stands out as the best option, combining financial advantages with a rich community life. If you’re looking for a fulfilling retirement experience, exploring the welcoming communities in Pennsylvania, particularly Cornwall Manor, could be the perfect choice for you.
Cornwall Manor is a continuing care retirement community (CCRC) offering personal care, skilled nursing care, therapy services and an on-site visiting physicians’ office.
If you value social engagement, independence, and an active lifestyle, Cornwall Manor is well worth exploring. Contact us online to learn more and see why Pennsylvania is a top place to retire.
