S.C. budget writers are bracing for an explosion in the state’s graying population.
That aging population will change the way the state spends money and collects tax dollars. Already, it is changing where South Carolinians live and how local governments operate.
Today, the fastest growing segment of the state’s population is residents age 85 or older. By 2029, more than 1 million South Carolinians will be older than 65, according to estimates. A year later, the state will have more retirees and residents 65 or older than school-age children.
State spending on healthcare, associated with an aging population, continues to rise, lawmakers were told Monday. “Every year, it just continues to grow and grow and grow,” said S.C. House Ways and Means chairman Brian White, R-Anderson.
The aging population also will change the state’s income, in part because S.C. tax laws shield older residents from paying many taxes.
Residents age 85 and older, for example, are exempt from 1 cent on the dollar of the state’s sales tax. In addition, taxpayers age 65 and older can exempt $15,000 from state income taxes.
In response, the state will face pressure to change the way it brings in money and the services it pays for.
Spending on some areas — including for local governments — could become less of a priority. Meanwhile, spending in other areas — on state pensions and for Medicaid insurance for poor, elderly residents — is expected to increase.
Older residents spend money differently than younger South Carolinians, said S.C. chief economist Frank Rainwater. Retirees do not spend as much on consumable goods, where the state charges sales taxes. However, they spend more on healthcare and other services, he said.
But a lot of those items — including healthcare — are not taxed, which means the state will not earn money off the sales, White said.
Coast, urban areas draw retirees
The aging population will most dramatically affect certain parts of the state.
South Carolina will attract 155,000 new residents this year, more than half over the age of 50, said Pat Mason, whose website carolinaliving.com is a guide for moving and retiring to the Carolinas.
Those who move to South Carolina to retire have a median household income of more than $112,000 a year, meaning most likely will not need Medicaid, Mason said.
Older residents are retiring in beach communities and areas near cities, said Lee Pearson, associate dean of the University of South Carolina Arnold School of Public Health.
“The coast of South Carolina is the biggest draw for retirees,” Pearson said. “But we also see them coming to the urban areas because they want access to cultural opportunities and sporting activities and things that enrich their quality of life.”
The aging population already is being felt in the Midlands.
Home builder Stewart Mungo, for example, is including homes specifically designed for seniors in new neighborhoods that his firm is developing in the Chapin area. He calls it a “multi-generational approach,” allowing grandparents to live near other relatives.
Meanwhile, the Lexington County Sheriff’s Department added an extra investigator last spring to focus on abuse of older adults. The move was a response to steady growth in that segment of the population. The elder-abuse unit now has eight staffers.
Staff writer Tim Flach contributed.
The population of the Palmetto State is growing older
S.C. residents over the age of 65 by 2029
S.C. residents over age 65 in 2015
S.C. residents 85 and older projected within the next two decades
Median cost for a care in a S.C. nursing facility in 2015
Median cost for assisted living in South Carolina in 2015
South Carolinians now acting as unpaid caregivers for family members, neighbors or friends
SOURCES: U.S. Census Bureau, S.C. Revenue and Fiscal Affairs Office, AARP Public Policy Institute, The Economist, Genworth Financial
Where seniors live in SC
Top 5 counties in residents age 65 or older
Top 5 SC counties ranked according to the percentage of residents age 65 or older
McCormick: 23.9 percent
Beaufort: 20.4 percent
Georgetown: 19.8 percent
Oconee: 19 percent
Horry: 17.1 percent
SOURCE: U.S. Census 2010