South Carolina is a very popular state amongst the retirement community for a great number of reasons. The state has quality healthcare options, scenic views, outdoor recreation, and mild weather. But one of the biggest draws South Carolina has is its low taxes–both on property and in the various deductions and exemptions. But what about taxes on social security benefits?
To better understand the tax benefits South Carolina offers in relation to social security, let’s take a closer look at social security benefits, state-specific tax rules, and retirement income deduction options, before diving deeper into South Carolina-specific retirement benefits.
For more information on South Carolina social security tax benefits, or to receive a quote, contact Beckham Insurance Group today.
Social Security Benefits
Social security benefits are the blanket term that applies to those benefit types that provide partial income replacement for qualified individuals. Typically, these individuals include qualified retirees, disabled individuals, and survivors including a benefitted person’s spouse or children.
To qualify for this income assistance, individuals automatically contribute to their social security plans out of their income while they are working by pulling money from their paychecks to contribute to the benefits account until they retire. While they are working, they must accrue forty credits to qualify for their benefits. These credits can be earned quarterly from wages if a set amount of earnings are contributed to that time. In 2021, an individual had to contribute $1,470 to gain credit, and in 2022 the number rose to $1,510.
State Social Security Tax
Of the fifty U.S. states, many do not tax social security benefits. However, there are twelve that enforce this tax. Among them are Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont, and West Virginia. Fortunately, South Carolina is one of the majority that does not enforce a social security benefits tax. In fact, South Carolina is a great state to be in to stretch your income and benefits as far as possible. The state has a low cost of living and excellent retirement income deductions that those over sixty-five may benefit from.
Retirement Income Deductions
In addition to not taxing social security benefits, South Carolina also offers other financial incentives to those in the retirement community who live there. These benefits come in the form of deductions on retirement income.
Retirement income is the basic term that applies to any benefits a person receives during their retirement. This money can come from any number of sources including social security benefits, annuities, retirement or profit-sharing plans, insurance contracts, and IRAs.
Individuals who receive any retirement income in South Carolina are eligible to claim up to $10,000 in deductions, and those over sixty-five may also deduct up to $10,000 from their retirement income from pensions, IRAs, and other related benefits. Further, individuals may claim up to $15,000 in deductions off of state tax in addition to the $10,000 they claim on retirement income deductions.
South Carolina Retirement Benefits
In addition to the excellent social security benefits and retirement income deductions, South Carolina has many other retirement benefits including healthcare, free college education, beautiful destinations, and mild weather.
There are a great many prominent healthcare systems active in South Carolina currently. Each is nationally ranked for different specialties they work in, including cardiac surgery, rheumatology, cancers, and ear, nose, and throat.
Free College Education
In South Carolina, any resident who is sixty years old or older is eligible to attend any state-funded college for free. This enables retirees to expand their education and learn any number of subjects. This is only caveat is the in-class space availability. As long as a classroom has an empty seat, any retiree may attend class either for credit or just to audit it; they only need to cover specific course fees like lab or studio fees, textbooks, and any mandatory materials.
There are many lovely vacation destinations in South Carolina, which makes it a popular location for retirees to move to. Some of the most-liked places include Myrtle Beach, Hilton Head Island, Georgetown, Spartanburg, Greenville, and Charleston. Additionally, South Carolina is home to plenty of outdoor recreation options including world-class golf courses, historic sites, water sports on the coast, and hiking opportunities in the Upstate.
Employee Benefits Made Easy
At Beckham Insurance Group, our knowledgeable and experienced employee benefits representatives are here to help make your benefits administration as easy and stress-free as possible. Contact us today to learn more about how we can help you build a competitive and comprehensive benefits program.