Kentucky or Tennessee: Which Is Better for Retirement?

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Choosing a town to retire to is a huge decision. Many factors go into helping you make the right choice for a retirement town, and things like weather and taxes could make or break the decision. Kentucky and Tennessee are appropriate states to retire to, but before you choose, you must take a closer look at their features first. 

Kentucky is a better fit for retirement if you’re looking for a state with affordable housing and safer statistics. On the other hand, if you’d prefer not to pay income tax, Tennessee is the better destination for you.

Category  Kentucky  Tennessee 
Housing  Affordable housing is available, and the average house costs $146,400. Houses are more affordable than the national average and are typically around $164,500.
Taxes  Kentucky doesn’t tax retirement benefits, including pensions, 401k, and social security.  You won’t have to pay income tax, and having income below 37,000 might make you eligible for tax exemptions.
Climate  The mild subtropical weather doesn’t usually go below 23°F (-5°C) to 28°F (-2.2°C) in winter. Summer temperatures could be around 92°F (33.3°C) in the hottest months.  The climate is typically warm and humid. Winter temperature ranges between 22°F (-5.6°C) to 33°F (0.6°C) while they might exceed 90°F (32.2°C) in the summer.
Cost of Living  Living expenses in Kentucky are lower than the national average.  You would spend less on day-to-day activities like transport and groceries. 
Crime  Kentucky has less violent and property crime than the rest of the country.  Violent and property crime is higher in Tennessee than the US average. 
Great cities to retire in Berea, Covington, Middlesboro, Owensboro, and Glasgow Knoxville, Chattanooga, Memphis, Churchill, and Coopertown


Let’s go into the specific details of each state to help you decide your retirement location. 

Kentucky or Tennessee: Which Is Better for Retirement?


Wherever you choose to retire, you will need shelter. Whether you buy a house or decide to rent a living space, the prices could affect your decision. 

In Kentucky, you’re likely to find affordable housing. The average price of homes in Kentucky is $146,400. You might find this price favorable if you’re moving from a big city. 

If you decide to go for rented apartments in Kentucky, you would also find that they’re probably cheaper than what you’re used to, especially if you’re coming from a large city. A studio apartment might cost you about $536, and the prices go up from there as you look for more spacious housing. You might have to pay about $1,190 for a four-bedroom house. 

Tennessee is also home to affordable housing, and you could find homes that cost about $164,500. Rent in Tennessee is also significantly lower than the average US rent rate. Studio apartments would be $622, and the prices go up for more rooms. A comfortable four-bedroom house might cost you about $1,332.

Honestly, both states offer pretty affordable housing. However, Kentucky is the slightly less expensive option. There are several options and designs to choose from. If you’re hard on home prices, you’d want to take your time going through the homes that fit your budget. You would need a real estate agent to help you go through available options. 


In Tennessee, you won’t have to pay personal income tax. If you’re over 65 and your annual income is less than $37,000 for a single party and $68,000 for a joint income, you might get a tax exemption. Sales tax also applies to purchases so that you might pay higher for other expenses such as gas and groceries.  

Kentucky also seems to have retirement-friendly taxes. Several forms of retirement benefits, including social security, pensions, 401(k), or IRA income, are exempt from income taxes up to $31,110 for each person. 

If your retirement income exceeds the deduction amount, you’ll need to pay the standard 5% income tax. Retirees also won’t have to pay city or county occupational taxes as those only apply to people receiving workers’ compensation. 

The average property tax rate in Kentucky is 0.83% and the median amount paid is $1,257. As a senior living in Kentucky, you might be eligible for homestead exemption. In 2019, the homestead exemption was $39,300. They remove this value from your property’s worth before applying the tax rate. You get to save $340 on your property tax. 

In Kentucky, there’s a flat sales tax rate of 6%. However, some senior items like prosthetics, prescription medication, and some groceries are exempted from sales tax. Your capital gains are also a part of your income, so they, too, are subject to personal income tax after the removal of the deductible amount.  


The Kentucky climate is moderate and mild—subtropical. You would get to enjoy all four seasons. The summers could get hot, and the winters could get pretty cold. However, temperatures don’t typically dip below 0°F (-17.8°C) in winter. 

December through February is usually the coldest. The lowest temperatures would typically range between 23°F (-5°C) to 28°F (-2.2°C). 

Kentucky also features moderate precipitation. Annual rainfall is typically around 45 inches (1,143 mm), while snowfall would be about 15 inches (381 mm) to 20 inches (508 mm). However, you would get more snow in January and the most rain in May. 

Right after the hot summer, with its peak temperatures of 85°F (29.4°C) to 92°F (33.3°C) in July, comes the pleasant autumn. You might enjoy the mild 50°F (10°C) to 83°F (28.3°C) daytime temperatures around autumn months of September and November. 

In Tennessee, you would get cool winters and warm summers. The temperatures are usually mild and would be the destination of choice if you desire to retire to the country’s warmer states. 

Tennessee’s weather condition is quite similar to Kentucky’s as both have their coldest months between December and February, with temperatures barely going below 0°F (-17.8°C).

You might experience hot and humid summer months. Temperatures typically peak around July and might cross 90°F (32.2°C). The coldest winter months generally have temperatures between 22°F (-5.6°C) to 33°F (0.6°C). Get your umbrellas ready because Tennessee gets rainfall throughout the year with an average precipitation of 50 inches (1,270 mm).

The snowfall amount depends on the location, with the west barely getting any at 5 inches (127 mm) while the mountains get much more snow of about 80 inches (2,032 mm). 

Whichever one you choose between Kentucky and Tennessee, remember to stay hydrated in the hot summer months. You might also stock up on sunscreen to protect your skin from the harsh UV rays. 

Cost of Living

The cost of living in Tennessee is well below the US average. You would observe these savings mostly in housing costs and groceries. 

Living expenses in Kentucky are lower than the national average. The most significant contributor to these low living costs is housing, which has 63 points compared to the national average of 100points. These figures also mean it’s the more cost-effective option between it and Tennessee. 

Other areas where Kentucky has lower living costs are healthcare, groceries, transportation, and utilities. 


Kentucky is one of the safest states in the US, and many residents aren’t worried about their safety. The violent crime rate in Kentucky is lower than the national average at 2.1 incidents per 1,000 people, whereas the national average is 3.7 per 1000 people. 

Kentucky also has fewer incidents of property crime than the US average. Property crime in Kentucky is 19.2 per 1,000 people, while the standard is 22 per 1,000 people. Kentucky residents usually stick to having a dog as their primary means of protection. If you already have a guard dog, you’d fit in nicely. 

If you’re still concerned about your safety in Kentucky, consider any of the state’s safest towns, including Greenville, Columbia, Villa Hills, Fort Thomas, Prospect, and Highland Heights. 

Safety might be a cause for concern if you’re thinking of moving to Tennessee. In this state, violent crime is significantly higher than the national average, with 6.2 incidents per 1,000 people instead of the standard of 3.7 per 1,000 people. 

Property crime is also a few points higher. Tennessee has 28.3 property crime incidents per 1,000 people compared with the national average of 22.0 per 1,000 people. 

Many Tennessee residents use security systems and guard dogs for added security, and you might want to consider that if you’re moving here.  

Some of the safest cities in Tennessee you could consider moving to include Churchill, Coopertown, Bean Station, Signal Mountain, Oakland, and Loudon. 


The right state to retire to between Kentucky and Tennessee depends on you.  

Kentucky offers slightly more affordable housing options and might be better for you if your budget is restricted. 

Tennessee might be your best pick if income taxes are your Achilles heel. You won’t need to pay income taxes in Tennessee, thus solving the problem. 



Hey there, my name is Ruth, I'm in my late fifties. My life was turned upside down a few years ago as I experienced a burn-out. But I saw it as a sign that something had to change in my life. I'm happy I used this tough experience as a stepping stone. I now feel happier than ever and hope to inspire you to do the same, no matter how old you are.

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