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Retire in South Carolina: 2026 Tax & Cost of Living Guide

One of the most generous retiree-friendly states in the Southeast: 6.2% top rate, $30K retirement exclusion at 65+, 44% capital-gains exclusion, fully exempt military retirement, low property tax (0.57%), no estate or inheritance tax.

State income tax

Progressive — top rate 6.20%

Social Security

Not taxed

Estate tax

None

Property tax

0.57%

How South Carolina Taxes Retirement Income

Social Security
Not taxed
Public pensions (state/federal)
Taxed
Private pensions
Taxed
401(k) / IRA withdrawals
Taxed

Exemption / exclusion

$10,000 retirement deduction under age 65 (from qualified retirement plans including pensions, IRAs, 401(k)s). At age 65+: $15,000 retirement deduction PLUS a separate $15,000 'senior deduction' for any type of income. Combined at 65+: effectively $30,000 of retirement income exempt per taxpayer. Military retirement pay: fully exempt as of tax year 2022.

What Would You Pay in State Income Tax?

Rough estimates at the top marginal rate (actual effective rate will be lower for most retirees due to brackets, exemptions, and standard deduction):

Annual Retirement IncomeEstimated State TaxEffective Rate
$50,000$3,1006.2%
$100,000$6,2006.2%
$200,000$12,4006.2%

Top rate 6.2% for tax year 2024, with scheduled reductions if revenue targets are met (6.0% potential for 2025+). South Carolina substantially simplified brackets in 2022.

Capital Gains in South Carolina

44% of long-term capital gains (assets held >1 year) are excluded from SC taxable income. Effective top SC rate on LT capital gains: 3.472%. Short-term gains taxed as ordinary income.

Top Cities for Retirees in South Carolina

Columbia

$2,095/month estimated cost of living

Property Tax Details

Effective rate (WalletHub 2024)0.57%
Avg combined sales tax (state + local)7.45%

Primary residences taxed at 4% assessment ratio; second homes and rentals at 6%. Homestead Exemption for homeowners 65+ removes first $50,000 of assessed value from taxation. Property tax among the lowest in the Southeast.

What South Carolina Retirees Need to Know

$30K combined retirement exclusion at 65+

SC is one of the most generous states for retirement-income exclusions: $15K general retirement deduction + $15K age-65 senior deduction stack, giving most 65+ retirees $30K of tax-free retirement income per person (double for married couples filing jointly). Surplus income taxed at regular rates.

44% long-term capital gains exclusion

Retirees realizing capital gains benefit from a 44% exclusion, effectively taxing LT gains at 3.47% (vs 6.2% ordinary). Combined with the retirement deductions, very favorable for asset-sale retirement events.

Military retirement pay fully exempt

Since 2022, 100% of military retirement pay is exempt from SC income tax. One of the most veteran-friendly Southeastern states.

4% primary-residence assessment ratio

South Carolina uses assessment ratios rather than flat rates. Primary residences (owner-occupied) get the low 4% ratio; rentals and second homes pay 6%. This is the engine behind SC's low effective property-tax burden.

States With No Income Tax

Alaska

Florida

Nevada

New Hampshire

South Dakota

Tennessee

Compare Against Other States

All 50 US States + DC

Ranked by tax-friendliness for retirees. Grouped by income-tax type.

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Retirement Methodology Calculators

How much do the big names actually say you need? See each guru's assumed return and withdrawal rate, side by side with academic defaults.

Dave Ramsey

12% / 8%

Bill Bengen

4% rule

Bogleheads

7% / 4%

FIRE Calculator

See how much you need to retire — in South Carolina or anywhere else.

Safe Withdrawal Rate

Model your retirement paycheck with real historical data.

Sources — South Carolina tax data

Last verified 2026-04-16

Tax rates and programs are subject to change. Data is current for 2024–2025. Always consult a qualified tax professional before making relocation decisions.