If sun and fun are high on a retiree’s priority list, Charleston, S.C., could be a great place to live. But clients who’ve set their hearts on a home in Charleston’s historic district or at the beach -- or who expect to trade traffic for tranquility -- may need to tweak their dreams.
While the Charleston metro area remains a more affordable and relaxing place to live than many U.S. cities, a single-family home in the city’s historic district or Isle of Palms, a nearby barrier island, costs at least $1 million, said Myles Brandt, a CFP with Charleston Financial Advisors LLC, a fee-only planning firm in Charleston.
He has seen some homes in the historic district run as much as $10 million to $15 million. And don’t forget flood insurance for many properties in the area, he said.
Brandt, raised in Charleston’s historic district, in a house built in 1743, also pointed out that the city’s older homes require a lot of maintenance. He’s seen some one bedroom condos in the historic district listed for $500,000, which may be more realistic for some retirees. Renting a condo is another option, he said, as is moving 20 minutes more inland to James Island and West Ashley, where the median home price is about $364,000.
According to Brandt, retirees withdrawing 5 percent a year on a $500,000 nest egg and receiving $30,000 a year in social security (for a combined annual income of $55,000), could afford to rent a condo or smaller single family home for $1,500 a month ($18,000 annually) and have $3,000 a month left over for other expenses. “If you’re frugal, that’s definitely doable,” he said, noting that a car is necessary.
To retire more comfortably and purchase a $500,000 home, retirees need a nest egg of at least $1 million to $1.5 million, he said. Individual income taxes range from 0 percent to a top rate of 7 percent. according to the state Department of Revenue. Charleston’s property taxes run about 0.51 percent of the value of primary residences and 1.43 percent for non-primary homes, Brandt added. Many of his clients also have homes in the mountains to escape Charleston’s heat.
About 30 people move to the Charleston metro area each day, said Brandt, citing a current statistic. Charleston, which has done a lot of advertising, “is by and large a victim of its own success,” he added. “Housing prices are going through the roof” and the city can’t keep up with its infrastructure. “We used to be a sleepy little town 30 years ago,” he said, and now you have to get to the beach before 9 a.m. on a weekend or sit in traffic.
Even so, he praised the city’s medical care and abundance of activities. Seniors can take classes for free at the University of Charleston, the city has become a culinary destination and Spoleto Festival USA, held each spring, offers 17 days and nights of theater, opera, dance and musical performances. Part-time jobs and volunteer positions abound and being a docent at a historical house, he said, “can keep your brain moving.”