West Virginia Ends Social Security Taxation: How Much You Need to Retire in Charleston

Charleston’s lower housing costs and a new tax break may make moving back appealing, but one well-timed mistake can drastically raise the amount you need to save. Before making plans, it helps to know which age marks the difference between a manageable retirement fund and a seven-figure target.

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Many retirees who grew up near the Kanawha River and later worked in Columbus or northern Virginia eventually wonder what it would take to return to Charleston, West Virginia. This article examines that question.

The numbers have improved because West Virginia no longer taxes Social Security, with the final phase-out complete and the tax gone entirely. Here is what a move back could mean for your budget and portfolio.

What West Virginia Still Taxes

The change was rolled out gradually. The tax was reduced by 35% in 2024 and 65% in 2025 before disappearing. Lawmakers also approved a 5% income tax cut for all West Virginians, effective retroactively to January 1, 2026. That leaves rates at 2.11% on the first $10,000 of taxable income and 4.58% on income above $60,000. Pensions and IRA withdrawals are still subject to tax.

Residents age 65 and older can each exclude $8,000 of retirement income. The state sales tax is 6%, and Charleston’s combined rate is 7%. Homeowners age 65 and older can also claim a $20,000 homestead exemption. Those who qualify may be eligible for a refundable income tax credit as well.

West Virginia already began exempting benefits for lower-income seniors in 2022, so the later change mainly benefits higher-income retirees. For many people on a modest Charleston budget, the impact is likely limited.

A Charleston Budget for One or Two

Housing is the biggest advantage. Charleston’s median listing price is around $171,312. In the South Hills ZIP code (25314), homes had a median sale price of $327,000. Even so, prices are rising quickly.

The metro’s FHFA index climbed 10.54% in a year and 40.14% over five years. In one large-city comparison, Charleston’s property tax rate was 15% below average. Statewide, the cost-of-living index stands at 89.497, with 100 representing the national average.

This budget assumes you own your home outright near the city median and pay the standard $202.90 monthly Medicare Part B premium per person.

Income taxes come out to roughly zero at this level. For couples, the federal standard deduction of $32,200 covers most taxable income, while the $8,000 state exclusions cover most of the rest.

Converting the Budget Into a Portfolio Goal

The average married couple receives $3,208 a month from Social Security, while the average retired worker gets $2,071. That leaves a couple short by about $18,600 a year. Using a 4% withdrawal rate over a 30-year retirement starting at 67, that equals roughly $464,000. For a single retiree, the annual gap is about $10,300, or around $257,000.

Waiting until age 70 to claim the higher earner’s benefit lowers both targets, and the larger payment also continues as the survivor benefit. One positive note on inflation: the 3.6% COLA for 2027 matches the 3.6% annual increase in the BLS price index, which reflects the spending patterns of older households.

Moving Back at 60 Raises the Goal Sharply

Leaving before Medicare begins means health insurance becomes a major expense. West Virginia has the nation’s most expensive unsubsidized ACA premiums, averaging more than $1,300 per person.

If Medicare costs are replaced with full-price ACA coverage, a couple would need about $384,000 just to bridge the years from 60 to 65. Add two years without Social Security and a core portfolio calculated at a lower 3.5% withdrawal rate, and the total rises to roughly $1.03 million.

The workaround is to fund those bridge years with a taxable brokerage account, Roth assets, and a Treasury ladder. That can help keep reported income low enough to remain eligible for subsidies.

Retirees get inexpensive housing, river and mountain views, and CAMC, which has been rated the top hospital in West Virginia for five years in a row. On the other hand, they may face fewer direct flights and fewer specialists than they would in a larger city, and winter driving on steep hills can become more difficult with age.

The state also recorded a net domestic gain of 3,137 people in the latest IRS data, although that statewide number may not reflect every nearby town.

What It Comes Down To

If you retire at 67 and own your home outright, the target is about $464,000 for a couple or $257,000 for one person. In either case, the plan assumes a 4% annual withdrawal rate and taxes that stay close to zero.

If you move back at 60, plan on roughly $1 million, plus a separate bridge fund to help keep ACA subsidies within reach. Before deciding, spend a week there in January. That will give you a realistic look at the hills, the drive to medical appointments, and winter weather conditions.