Augusta, Georgia, Is Famous for One Week of Golf. Retirees Who Stay Year-Round Get One of the South’s Biggest Retirement Tax Breaks
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Augusta, Georgia, is a mid-sized Southern city that costs less than most, and it’s worth looking into to see what it could cost to retire here. Plenty of people near retirement wonder whether they could be one of those year-round residents. With that in mind, let’s dive deep into what it costs, what the math really looks like, and the Georgia tax break that drives most of the savings.
What a Retired Couple Spends in Augusta
Unsurprisingly, housing is the first thing you’ll notice, as the median listing price in Augusta is about $200,000. Property taxes average around $1,358 a year, an effective rate near 0.96%. Georgia gives every owner-occupant a $2,000 homestead exemption. There’s also a $4,000 county exemption for those 65 or older, but it has an income cap of $10,000. Retirement income doesn’t count toward that cap, up to the Social Security maximum of $96,432 for 2025, so more retirees qualify than you’d expect.
Power is the line to watch. Georgia residential electricity averaged 15.90¢ per kWh in August, which works out to about $159 a month at 1,000 kWh. Georgia Power says summer bills can run 30% to 50% higher. For the full budget, start with the BLS figure: the average household spent $81,905 in 2025. Georgia’s price level is 96.293, compared with the national 100. Adjust for that, and you get about $78,870 a year.
| Monthly Item (Couple) | Cost |
|---|---|
| Property tax | $113 |
| Electricity (1,000 kWh) | $159 |
| Medicare Part B, two people | $405.80 |
| Food, Medigap and Part D, car, maintenance, reserves, federal tax | $5,894 |
| Total | $6,572 |
Turning That Budget Into a Portfolio Number
After the 3.6% COLA, the average aged couple receives $3,355 a month, or $40,260 a year. That leaves a gap of about $38,600. At a 4% withdrawal rate, you’d need roughly $965,000. If you retire early or want more buffer, a 3.5% rate brings that to about $1.1 million. A single retiree’s average check is $2,170. Waiting to claim raises that check, and a bigger check reduces the gap.
Keep the trust fund in view. The combined Social Security funds are expected to run dry in 2034, and after that only 83% of benefits would be paid.
Georgia’s Tax Break, and Where Couples Lose It
On the plus side, Georgia doesn’t tax Social Security. You subtract it on the state return (Georgia DOR). For 2026, the state’s income tax is a flat 4.99%, and a married couple gets a $30,000 standard deduction. On top of that, the retirement income exclusion shields $35,000 per person at ages 62 to 64 and $65,000 at 65 and older. It covers interest, dividends, capital gains, IRA withdrawals, pensions, and rental income, and up to $5,000 of it can be wages.
Each spouse has to qualify on their own, and income is credited to whoever owns it. Jointly owned assets are split 50/50, while IRAs always belong to one person. Say a couple pulls $130,000, maybe to fund Roth conversions during the low-tax years between retiring and RMDs (a window we sized up in a free Roth guide here). With no exclusion, Georgia tax would be about $4,990. If all of it comes out of one spouse’s IRA, only one exclusion applies, and the bill is about $1,750. If each spouse takes out $65,000 from their own accounts, the bill is zero. So balance who owns what before you retire.
Tournament week rentals can also help retirees. Plenty of locals rent out their homes during the Masters (Major Sports Augusta). Under the federal rule we’ve covered before, often called the Augusta Rule, rent for a home rented less than 15 days a year stays out of gross income (26 U.S.C. § 280A(g)). Georgia starts from federal AGI (Georgia DOR), so the state doesn’t tax it either. It also stays out of the income Medicare uses to set your premiums, and the joint surcharge doesn’t start until $218,000.
What You Get, and What You Give Up
AU Medical Center is a 520-bed teaching hospital, now part of Wellstar MCG Health (Wellstar). The Riverwalk runs from 5th to 10th Streets along the Savannah River. On the downside, summer heat can show up on the power bill. Some trips may start with a drive to a bigger airport. You’ll need a car for nearly everything.
How Couples Can Owe Georgia Nothing in Retirement
A couple spending at Georgia’s average level needs about $965,000 on top of average Social Security, drawn at 4%. Wait until 65 so each of you gets the full exclusion. Before you retire, split the savings so each spouse can draw up to $65,000 from accounts in their own name. Do that, and a couple can bring in $130,000 of retirement income plus Social Security and owe Georgia nothing. That one planning step is how two exclusions make Augusta a lower-cost place to retire.
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David Beren has been a Flywheel Publishing contributor since 2022. Writing for 24/7 Wall St. since 2023, David loves to write about topics of all shapes and sizes. As a technology expert, David focuses heavily on consumer electronics brands, automobiles, and general technology. He has previously written for LifeWire, formerly About.com. As a part-time freelance writer, David’s “day job” has been working on and leading social media for multiple Fortune 100 brands. David loves the flexibility of this field and its ability to reach customers exactly where they like to spend their time. Additionally, David previously published his own blog, TmoNews.com, which reached 3 million readers in its first year. In addition to freelance and social media work, David loves to spend time with his family and children and relive the glory days of video game consoles by playing any retro game console he can get his hands on.
