Delaware vs South Carolina Retirement Cost Comparison

If you have been comparing retirement dates, you probably ran into the same thing that I have, which is if you look up the cheapest states to retire to, South Carolina seems to always be at the top. Lower home prices, warmer winters, no tax on your social security. And Delaware usually shows up as a smaller, quieter, slightly more expensive cousin. And here's what those lists are not showing you. Something that is rising more and more every year and it is not something that is on the spreadsheets or that you're even looking at until you've already made the decision to move to that state. But it is the first bill that is going to surprise you after. So today's video, I want to discuss the differences in price compared to a retirement in South Carolina and a retirement in Delaware. Now, if you are looking for the quick guide on the differences between the two states, I have created that in the description down below, there is a link is a full comparison on South Carolina retirement and Delaware retirement. So if you're anything like me, you need to visually see the differences in each state. So if you have been comparing states of retirement, you most likely have made a spreadsheet, which has the home prices on it. It maybe has property taxes on it. It probably has the taxes on your to health care. And let's be honest, if you're looking at the spreadsheet, in most cases, South Carolina wins. They have lower home prices. They have mild winters and a tax structure that sounds very generous. So listen, if you are leaning towards South Carolina, I am not here to talk you out of that. I'm just here to make sure that you are comparing the full numbers and every aspect of comparing Delaware versus South Carolina. And today we're going to talk about not only the moving costs, but the staying costs as well. Now, when people first start thinking about retiring to a different state, they're often looking for what is the cheapest state to retire in. But the better question to be asking is, is what is the cheapest state to be retiring in 10 years from now? Because the cost now and the numbers now is not giving you the full picture on whether that is stable or if the cost is rising, where the cost will be in five years. What will your groceries cost? Your gas prices, proximity to health care. And there is one line in your retirement budget that you most likely do not have on there. And that is the cost that keeps on rising. And little hint, it has nothing to do with taxes. So instead of comparing the communities, let's just talk about the six frameworks that go into moving to a different state for retirement. And that's housing, taxes, insurance, health care, everyday life spending, and long term sustainability. First off, let's talk about housing. On pure sticker price, South Carolina wins. The popular retiree coastal areas like Hilton Head, Charleston, and Myrtle Beach are often lower priced than Delaware coastal areas. But here's the catch. South Carolina's real affordability pricing actually comes from housing inland, not the coastal communities that many retirees are actually picturing when they think about retirement in South Carolina. The coastal South Carolina towns compared to coastal Delaware is not South Carolina's cheapest option. It's actually their premium as well. So when you're picturing your retirement in South Carolina, you're often picturing these cute coastal towns. And on the list, it makes it sound as if that South Carolina is the cheapest option, but they're pulling that pricing off of the inland communities, not the coastal. So really, if you were to compare apples to apples, they're about the same cost. Delaware's advantages here aren't exactly the purchase price. It's actually our property taxes. In Sussex County, which is our coastal towns, property taxes for a home in the high 300s could be less than $1,000. And no, that is not a typo. That's actually the truth. Now, South Carolina's tax rate is also fairly low, but this is one of the advantages that Delaware has, especially in our coastal towns, as being lower in property taxes across the board. All right, now let's switch over to taxes since we've already talked about it. So both states actually protect your social security income. So they both do not tax your social security income. So that's basically a wash. It's actually the retirement income. So your pensions, your 401ks, and your IRA withdrawals. Delaware excludes the first $12,500 for people that are age 60 and older. South Carolina advertises a $10,000 tax reduction for your retirement income, plus a separate $15,000 age 65 and older reduction. And that sounds great on paper. That sounds like $25,000 in savings. But in practice, those two deductions overlap. If you claim the full retirement deduction, your age deduction gets reduced by that amount. So your real combined deduction lands right around $15,000 per person, not $25,000. South Carolina's top rate has also been trending down. It's been trending from 7% down to 6% and lower due to recent reforms proposals. So listen, headlines are going to read that South Carolina wins when it comes to your retirement income, but really they are super close. And it's just a matter of where you would want to live. Number three on the list is insurance. And this is a big one. I know I mentioned that there is something in your budget that you're not thinking about, and this is the one. South Carolina's homeowners insurance has gone up nearly 30% in the last five years. Coastal counties have it the worst. Some homeowners are saying that they have opened up their renewals and it's 20, 30, 40% higher than it was just the previous year. And that's with no claims and no changes to their policy. In coastal markets, especially places like Myrtle Beach, homeowners are saying that their average premium for the year is well above the state average. And that's before you add flood insurance, which all of the coastal towns require. And here's the catch. It's not just about price. It's about availability. Several national companies have pulled back from offering homeowners insurance to the coastal towns in South Carolina. Existing policies do not get canceled midterm, but your renewal options are shrinking every year. And if your roof is 15 years old or older, they are not paying out on a full replacement. They're only giving you the depreciation of value of it. Now, that is not to say that Delaware is also not changing their insurance policies. If you are on the water in coastal Delaware, you are required to have flood insurance. But we do not experience the same type of weather that South Carolina does. In the Carolinas, it seems that more and more hurricanes are coming towards the Carolinas. We have not had a major hurricane since Hurricane Sandy, knock on wood. So we are not seeing the changes to those policies as much as the Carolinas are. But this is something that almost no one puts on a spreadsheet before they move. In most cases, they are already moved to the state or planning to move to the state or under contract. And they are not finding this out until it is too late. And they have already signed on with moving to whatever state they have chosen. All right. So number four on the list is healthcare. And this is something that most people do not see. But it's kind of a wash when it comes to healthcare as well, because both states are very similar. Both states know that they are retirement states. So there are definitely more and more access to primary care, walk-in specialists, bringing doctors in and having that walk-in on the corner or having the emergency room less than 15 minutes away or having the access to specialists throughout the state. So this is where they are very similar when it comes to healthcare. Now let's talk about everyday spending. So it is well-known Delaware has no sales tax. Now compare that to South Carolina. South Carolina has a sales tax of around 7.5%, although your groceries are exempt. But that will add up. Now this is not the headline in this comparison, but this will add up on things like TVs or appliances or any other purchase besides your groceries. You do need to add that 7.5% onto your purchases. In Delaware, that does not happen. So if you see a TV that's in Sam's Club or Costco or BJ's and it's $700, it's $700. There's no sales tax added to it. While this is very small, it is something to take into consideration when making your comparison. And last on the list is long-term suitability. Now, what I always say is, yes, one state may work for you right now, but look five, 10, 15 years out. Is that same state still doing what it needs to do for you? So for example, are your property taxes rising every single year? Delaware's property taxes have been low and steady. South Carolina, on the other hand, your homeowner's insurance policies are rising almost every year. And many forecasts are saying that that is not going to change anytime soon. This does not mean that South Carolina is not an amazing choice for your retirement. It just means that while it may work right now, will it work in five years or 10 years or 15 years or honestly, even next year? It really depends on your particular situation, your budget, where you see yourself moving to in South Carolina, where you see yourself being comfortable throughout the next decade as it evolves. Now, listen, I know that South Carolina offers warmer winters and I can't take that away. Yes, it does. I'm never going to tell you that Delaware does not get snow anymore after this past winter, because we did get two significant snowstorms. Now, if you are overwhelmed, that is completely normal. I have made a full guide comparing the two states so that you can look at it on paper, because I know as a visual person, it's much easier to look at that on paper. And it is a bit more detailed. If you are thinking about retiring to Delaware, I would absolutely love the opportunity to help you. And my information is down below in the description. You can get a link for my calendar. You can also set up a call or send a text or even send me an email. I really hope this video helped. If it did, be sure to give me a thumbs up. Be sure to subscribe to the channel and I will see you on next week's video. Hey, thank you so much for making it this far into the video. If you are interested in more Delaware retirement, check out this video right here. And if you would love to tour 55 plus communities with me, check out this playlist right here. And don't forget, subscribe to my channel.