Should You Move to South Carolina or Just Vacation There?

I moved to the Lowcountry in South Carolina in 2006. I told my wife I'd give it five years, and then I wanted to go back to Indiana, where I'm from. Twenty years later, I'm still here.

I'm a financial adviser, CFP® and Certified Financial Fiduciary®. My firm, Coastline Complete Wealth, is in Bluffton, which is the mainland side of Hilton Head Island and about 45 minutes from Savannah.

Almost everyone I meet who moves to this area seems to have vacationed on Hilton Head first. The island may be what draws them in, but then they discover that moving a little farther inland can buy them a newer home, more space and considerably more for their money.

For someone coming from an expensive market in the Northeast, seeing what their money can buy in South Carolina can feel like they're playing Monopoly.

And they're coming. According to the latest U.S. Census Bureau estimates, South Carolina is the fastest-growing state, and Jasper County, right here in the Lowcountry, is the nation's fastest-growing county.

What I'm seeing isn't unique to this area. Whether you're considering South Carolina, Florida, Georgia or somewhere else, vacationing there and retiring there are two very different things (I even wrote a book on this topic, Lowcountry Retirement). And buying a less expensive house doesn't necessarily mean retirement will be less expensive.

If you're going to move here, understand what it costs to fully commit

The Lowcountry can be an expensive place to live, but it can become a really expensive place to own a second home.

South Carolina property taxes are one thing to pay close attention to. A qualifying primary residence is generally assessed at 4% of fair market value versus 6% for a second home, and primary residences are also exempt from school operating taxes.

I recently met with someone who had bought a home here as a second property, having looked at the previous owner's property tax bill of roughly $6,000 on Zillow. He couldn't believe it when his first tax bill was more than $36,000.

South Carolina is a very property-tax-friendly state, but you have to do it right. A second home doesn't get the same favorable treatment as your primary residence.

Insurance is another consideration. We've had several hurricanes affect the region over the years, and insurance companies have been pulling back from coastal areas. Most homeowners insurance also doesn't cover flooding, so make sure you price both homeowners and flood coverage before you buy.

I have a handful of clients paying around $2,500 a month between homeowners' association fees and club dues. That's $30,000 a year before we've talked about property taxes, insurance, utilities, landscaping or maintaining the house.

In some parts of the country, $2,500 a month might be an entire mortgage payment. Here, it can just be the cost of belonging to the community.

Rent before you buy — and see what living here is actually like

I met with a couple earlier this year who had a flat overlooking the Hudson River. They were considering the Lowcountry and had just started looking at houses. A couple of days later, he called to tell me they'd bought a house in Sun City on their first trip here.

If you're seriously considering retiring here, get an Airbnb for the month of August. See what you think about the heat and humidity, and sit in the traffic on a Saturday when it's check-in day on Hilton Head Island.

Then come back and get an Airbnb in December, when we just throw on a fleece and say 55 is cold. You need to experience the place as someone who lives here, not someone who's here for a week.

You also need to think about what happens when you move somewhere everybody else likes to vacation.

For about two months every year at our house, it seems like we're shuffling one group of visitors out just in time to bring the next one in. They don't want to cook spaghetti every night. They want to go out to dinner, go to Hilton Head, play golf and do the things people do on vacation. They're on vacation even though you're not, and you're probably going along for the ride.

That's one of the great things about living here, but it also becomes part of your retirement lifestyle and spending. If your children, grandchildren and friends are going to visit regularly, plan for that too.

What does your retirement actually cost?

The biggest financial concern I see usually isn't that people haven't accumulated enough money. Quite the opposite. Many of the people I meet have substantial assets, and it's not unusual for someone sitting across from me to have $2 million or more saved for retirement. What surprises me is how many have no idea what their lifestyle actually costs.

I'll sit across from a couple who may have been earning $300,000 a year before retirement, and when I ask what they expect to spend, they'll say something like, "Well, if we can't live on $100,000 a year, something's wrong."

That's not a retirement budget. That's an arbitrary number. It may have been 20 years since that couple actually lived on $100,000 a year, so why would we assume they're suddenly going back to that lifestyle in retirement?

Start with reality. Look at what you actually spent over the past 12 months, subtract the expenses that will disappear in retirement and add the things likely to increase: Travel, golf, eating out, visitors and the carrying costs of the new house.

Once you know what your retirement is likely to cost, the next question is where the money is going to come from. A retirement plan should determine how you'll use Social Security, investments and retirement accounts to fund that lifestyle while considering the taxes you'll pay along the way.

The goal isn't to figure out the lowest number you can possibly live on. It's to build a plan that lets you afford the retirement you actually want.

I love this place, and you couldn't drag me out, so don't let me talk you out of coming. Just do it the right way. Understand what the lifestyle will actually cost and build a retirement plan around it.

You may find out, like I did, that five years turns into 20 pretty quickly.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.