The state of Tennessee has a very favorable tax climate for retirees. Unlike most other states, it does not have an individual state income tax, and all forms of retirement income are untaxed at the state level (including Social Security benefits). Additionally, property taxes in the Volunteer State are relatively low.
The only catch is that Tennessee has a fairly high sales tax, with the state rate being 7% and local rates ranging from 2.75% to 9.55%. This can add up for retirees living on a fixed income.
The good news is that many of the state’s cities and towns have low property taxes, attracting retirees to affordable communities in some of the country’s most beautiful landscapes. For instance, Johnson City is known for its low housing costs and its proximity to top medical providers such as Vanderbilt University Medical Center.
Despite this, the state is still a great place to retire. The cost of living in Tennessee is about ten percent lower than the national average, which can help ease financial pressure on seniors. In addition, the State of Tennessee 401(k) deferred compensation program is a tax-favored tool for retirees to save and invest money for their future.
Is Tennessee a Good Place to Retire?
The Volunteer State offers numerous benefits for retirees, including no income tax on Social Security benefits and other retirement savings. Its affordable cost of living and beautiful scenery make Tennessee a desirable retirement destination. Its major cities also offer plenty of things to do and see, from music and food to cultural museums and other attractions.
Nashville and Memphis are popular destinations for retirees looking to live in a big city with an active social scene. Both have an international airport and offer easy access to other parts of the country. Nashville is home to the Grand Ole Opry and has a bustling culinary scene, while Memphis offers a mix of southern charm and urban sophistication.
Many other towns and cities across Tennessee have something unique to offer retirees. One example is Tellico Lake, which offers breathtaking views and a wide variety of outdoor activities. Another option is Winchester, which has a small-town feel and is close to several lakes and attractions.
The Retire Tennessee program is a state government initiative that highlights ideal retirement locations throughout the state. Its 17 urban and rural communities meet state requirements and have earned the American Association of Retirement Communities Seal of Approval. If you’re interested in retiring to Tennessee, talk with a Clever Real Estate agent who can provide on-the-ground insights into local communities and help you find the right place for your next chapter.