Side-by-side for American retirees in 2026.
Florida's biggest rival for the snowbird crowd. Dry desert climate, lower humidity than the Southeast, a flat 2.5% income tax, and Social Security fully exempt.
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.
| Flat 2.5% | Income tax | No state income tax |
| Exempt | Social Security | Exempt |
| Flat 2.5% on most retirement income; Social Security fully exempt | Pension treatment | All retirement income state-tax-free |
| 0.51% | Property tax (effective) | 0.67% |
| 8.40% | Avg combined sales tax | 9.55% |
| 102.5 | Cost of living (US=100) | 90.3 |
| None | Estate / inheritance tax | None |
| Hot dry summers (100°F+ in Phoenix), mild winters. Flagstaff and Prescott offer cooler mountain climates year-round. | Climate | Four distinct seasons. Warm humid summers, mild winters with occasional snow. East Tennessee mountains cooler year-round. |
| Excellent — Mayo Clinic Scottsdale, Banner Health, HonorHealth. Tucson has top geriatric care. | Healthcare | Strong — Vanderbilt (Nashville), University of Tennessee Medical Center. Limited in rural areas. |
| Scottsdale, Tucson, Prescott | Top retirement cities | Knoxville, Chattanooga, Crossville |
Senior property tax freeze available age 65+ with income under ~$45K (varies by county)
Property tax freeze available for 65+ with income under ~$33K (varies by county); tax relief programs available
Arizona: Florida's biggest rival for the snowbird crowd. Dry desert climate, lower humidity than the Southeast, a flat 2.5% income tax, and Social Security fully exempt. Tennessee: 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. The right choice depends on your income mix, climate preference, and whether state income tax matters more to you than property tax.
No, Arizona does not tax Social Security retirement benefits.
No, Tennessee does not tax Social Security retirement benefits.
Arizona's cost of living index is 102.5 (US = 100). Tennessee's is 90.3. Tennessee is cheaper on average.
Enter your retirement income and see the after-tax difference between Arizona and Tennessee in 30 seconds.
Open tax estimator →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.