No state income tax, low cost of living, and four mild seasons. The mountains, lakes, and music capital make it one of the fastest-growing retirement destinations.
| State income tax | No state income tax |
| Social Security | Fully exempt |
| Pensions & 401k/IRA | Not taxed (no state income tax — Hall income tax on dividends/interest was fully repealed in 2021) |
| Avg combined sales tax | 9.55% |
| Estate / inheritance tax | None |
Effective property tax: 0.67% (ranked #14 of 50 states).
Property tax freeze available for 65+ with income under ~$33K (varies by county); tax relief programs available
Cost of living index: 90.3 where the US average is 100 — about 10% cheaper than the national average.
Four distinct seasons. Warm humid summers, mild winters with occasional snow. East Tennessee mountains cooler year-round.
Strong — Vanderbilt (Nashville), University of Tennessee Medical Center. Limited in rural areas.
Knoxville, Chattanooga, Crossville
No, Tennessee does not tax Social Security retirement benefits.
No state income tax. All retirement income state-tax-free.
Tennessee's cost of living index is 90.3 where the US average is 100. Effective property tax averages 0.67% and combined sales tax averages 9.55%.
Popular retirement spots in Tennessee include Knoxville, Chattanooga, Crossville.
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Tax data current as of 2026 publication. Rates and rules change annually — verify with a CPA before relocating. This page is educational and not personalized tax or legal advice.