Rising sea level will increase surface runoff and decrease groundwater discharge from low‐lying coastal areas by raising the water table and thus saturating the soil. As a result, there will be increased upland flooding by freshwater and changes in the productive intertidal and near‐shore ecosystems that depend on the lowered salinities and nutrients provided by groundwater discharge. This paper compares these effects of future increases in sea level with the present variation in runoff and groundwater discharge caused by interannual variations in precipitation and evaporation. The analysis relies on a water balance model calibrated using data from a small watershed on Cape Cod (USA). Interannual variation of runoff and groundwater discharge is estimated by driving the model with 40 years of historical weather data. The results indicate that a 20 cm rise in sea level will double the mean surface runoff and reduce groundwater discharge by half. These conditions are significantly different than the present mean hydrologic conditions. The variability of surface runoff also increases with rising sea level.