$87,066 difference over 30 yearsFor an identical retiree (age 60, $2M, 60/40, $80K real spend), QuantCalc's Monte Carlo study found a median 30-year state-tax gap of $87,066 between New York and North Carolina — North Carolina is the cheaper state. That money stays invested, which is why North Carolina's median terminal balance is higher.
New York vs North Carolina at a glance
| Factor | New York | North Carolina |
|---|---|---|
| State income tax | 10.90% top | 3.99% top |
| Taxes Social Security | No | No |
| Taxes 401(k)/IRA | Yes | Yes |
| State estate/inheritance tax | Yes | No |
| Tax on $100k withdrawal | $10,900/yr | $3,990/yr |
| Retirement-friendliness | high tax | friendly |
| 30-yr median state tax (MC) | $137,340 | $50,274 |
| 30-yr success rate (MC) | 69.62% (#49) | 73.54% (#29) |
| Median terminal balance (MC) | $747,827 | $862,936 |
The income-tax difference, year by year
The simplest way to see the gap: on a steady $100,000 annual retirement withdrawal, New York collects about $10,900 in state income tax and North Carolina collects about $3,990 — a difference of roughly $6,910 every year. The highest top brackets in the country, a retirement income exclusion from age 59, and a $6.94M estate cliff. One flat bracket, with the Bailey exemption for qualifying government retirees.
Over a 30-year retirement, QuantCalc's Monte Carlo simulation (identical portfolio and spending in both states, only the tax code changes) puts the median lifetime state-tax difference at $87,066 — and because the saved tax stays invested and compounds, North Carolina's median ending balance is the higher of the two.
Beyond income tax
State income tax is only part of the retirement-cost picture. When comparing New York and North Carolina, also weigh:
- Property tax — a tax-free-income state can still have high property tax; factor your home value.
- Sales tax — affects every dollar you spend, not just income.
- Estate / inheritance tax — New York: has one; North Carolina: none. Matters for larger estates.
- Roth conversion cost — converting in the lower-income-tax state of the two cuts the state tax on each converted dollar. See conversion-tax scenarios.
See New York vs North Carolina on your full plan
Free 10,000-path Monte Carlo with every state's tax engine, Roth optimizer, ACA cliff, and IRMAA — in your browser, no signup.
Compare all states →Compare other states
Deep-dive either state: New York retirement tax guide · North Carolina retirement tax guide. Or see the full 50-state comparison and the 51-state Monte Carlo study.
FAQ
Is New York or North Carolina better for retirement taxes?
On state income tax, North Carolina is the lighter-tax state. In QuantCalc's 30-year Monte Carlo study, a representative retiree paid a median of $50,274 in state tax in North Carolina versus $137,340 in the other — a $87,066 lifetime difference on identical income and spending.
Does New York tax Social Security and 401(k) withdrawals?
New York does not tax Social Security benefits and taxes 401(k)/traditional IRA distributions at the state level. The highest top brackets in the country, a retirement income exclusion from age 59, and a $6.94M estate cliff.
Does North Carolina tax Social Security and 401(k) withdrawals?
North Carolina does not tax Social Security benefits and taxes 401(k)/traditional IRA distributions at the state level. One flat bracket, with the Bailey exemption for qualifying government retirees.
How much would moving from New York to North Carolina save on retirement taxes?
On a $100,000 annual withdrawal, the state income tax is about $10,900 in New York versus $3,990 in North Carolina — roughly $6,910 per year of difference. Over 30 years, the Monte Carlo median gap was $87,066. Don't forget property tax, sales tax, and estate tax also differ — see the table above.
Last updated 2026-08-23. State tax data 2026 (Tax Foundation + state DoR). Monte Carlo figures from the QuantCalc 51-state study (2026-05-12, CC-BY-4.0): identical age-60 / $2M / 60-40 / $80K-real-spend retiree in each state. Educational only, not tax advice.