Side-by-side for American retirees in 2026.
Four-season retirement with mountains, coast, and the Research Triangle. Flat income tax, no Social Security tax, and exceptional healthcare from Duke and UNC.
No state income tax, low cost of living, and four mild seasons. The mountains, lakes, and music capital make it one of the fastest-growing retirement destinations.
| Flat 4.25% | Income tax | No state income tax |
| Exempt | Social Security | Exempt |
| Flat 4.25% in 2025, scheduled to step down further on the NC phase-down; Social Security fully exempt | Pension treatment | All retirement income state-tax-free |
| 0.73% | Property tax (effective) | 0.67% |
| 6.99% | Avg combined sales tax | 9.55% |
| 95.3 | Cost of living (US=100) | 90.3 |
| None | Estate / inheritance tax | None |
| Four distinct seasons. Mild winters in the Piedmont; cooler in the mountains; warm humid summers statewide. | Climate | Four distinct seasons. Warm humid summers, mild winters with occasional snow. East Tennessee mountains cooler year-round. |
| Excellent — Duke Health, UNC Health, Atrium Health. Research Triangle has world-class care. | Healthcare | Strong — Vanderbilt (Nashville), University of Tennessee Medical Center. Limited in rural areas. |
| Asheville, Wilmington, Pinehurst | Top retirement cities | Knoxville, Chattanooga, Crossville |
Elderly/disabled homestead exclusion: $25K or 50% of value (whichever greater) for income under ~$36K
Property tax freeze available for 65+ with income under ~$33K (varies by county); tax relief programs available
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. Tennessee: No state income tax, low cost of living, and four mild seasons. The mountains, lakes, and music capital make it one of the fastest-growing retirement destinations. The right choice depends on your income mix, climate preference, and whether state income tax matters more to you than property tax.
No, North Carolina does not tax Social Security retirement benefits.
No, Tennessee does not tax Social Security retirement benefits.
North Carolina's cost of living index is 95.3 (US = 100). Tennessee's is 90.3. Tennessee is cheaper on average.
Enter your retirement income and see the after-tax difference between North Carolina and Tennessee 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.