Side-by-side for American retirees in 2026.
Florida's biggest rival for the snowbird crowd. Dry desert climate, lower humidity than the Southeast, a flat 2.5% income tax, and Social Security fully exempt.
Four-season retirement with mountains, coast, and the Research Triangle. Flat income tax, no Social Security tax, and exceptional healthcare from Duke and UNC.
| Flat 2.5% | Income tax | Flat 4.25% |
| Exempt | Social Security | Exempt |
| Flat 2.5% on most retirement income; Social Security fully exempt | Pension treatment | Flat 4.25% in 2025, scheduled to step down further on the NC phase-down; Social Security fully exempt |
| 0.51% | Property tax (effective) | 0.73% |
| 8.40% | Avg combined sales tax | 6.99% |
| 102.5 | Cost of living (US=100) | 95.3 |
| None | Estate / inheritance tax | None |
| Hot dry summers (100°F+ in Phoenix), mild winters. Flagstaff and Prescott offer cooler mountain climates year-round. | Climate | Four distinct seasons. Mild winters in the Piedmont; cooler in the mountains; warm humid summers statewide. |
| Excellent — Mayo Clinic Scottsdale, Banner Health, HonorHealth. Tucson has top geriatric care. | Healthcare | Excellent — Duke Health, UNC Health, Atrium Health. Research Triangle has world-class care. |
| Scottsdale, Tucson, Prescott | Top retirement cities | Asheville, Wilmington, Pinehurst |
Senior property tax freeze available age 65+ with income under ~$45K (varies by county)
Elderly/disabled homestead exclusion: $25K or 50% of value (whichever greater) for income under ~$36K
Arizona: Florida's biggest rival for the snowbird crowd. Dry desert climate, lower humidity than the Southeast, a flat 2.5% income tax, and Social Security fully exempt. North Carolina: Four-season retirement with mountains, coast, and the Research Triangle. Flat income tax, no Social Security tax, and exceptional healthcare from Duke and UNC. The right choice depends on your income mix, climate preference, and whether state income tax matters more to you than property tax.
No, Arizona does not tax Social Security retirement benefits.
No, North Carolina does not tax Social Security retirement benefits.
Arizona's cost of living index is 102.5 (US = 100). North Carolina's is 95.3. North Carolina is cheaper on average.
Enter your retirement income and see the after-tax difference between Arizona and North Carolina in 30 seconds.
Open tax estimator →Tax data current as of 2026 publication. Rates and rules change annually — verify with a CPA before relocating. This page is educational and not personalized tax or legal advice.