The 5 Best Places to Retire in Tennessee, Based on Taxes, Amenities, and More

By Lindsay Stefan

Posted on August 22nd, 2022

Tennessee Retirement Taxes | Tennessee Health Care | Price-to-Income (PTI) Ratio in Tennessee | How to Choose a Tennessee City for Retirement | The 5 Best Places to Retire in Tennessee | Alternatives | Tips for Selling Your Current Home | Methodology

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With its mountains, affordable lakeside properties, and plentiful small towns, Tennessee is the perfect state to settle down for a peaceful retirement with lots of fishing, hiking, and boating. And with cities like Memphis and Nashville nearby, you can liven things up with music and shopping whenever you want to!

The Volunteer State is also extremely hospitable towards retirees, offering a favorable tax environment, mild weather, and a very low cost of living.

We evaluated the best Tennessee cities for retirees according to publicly available data on:

  • Local tax rates
  • Health care quality and accessibility
  • Home values
  • Cost of living

Then, we ranked the top five according to how good they are for retirees. Learn more about our methodology.

Whether you’re unsure which city you prefer or you’re hoping to find a good retirement community in a specific city, you’ll need some insider perspective — something hard to get if you don’t currently live nearby.

If you're looking for a local realtor who can provide on-the-ground insights into Tennessee's best retirement cities, our friends at Clever Real Estate help. Clever offers a free service that matches you with the best real estate agents from Keller Williams, RE/MAX, Century21, and other top-rated brokers.

In Tennessee, you can find a fantastic real estate agent through Clever without the hassle. And if you need to sell your current home, Clever can introduce you to local agents who work for pre-negotiated listing fees of just 1%. The average Clever seller saves $9,000!

👋 Meet the best real estate agents in Tennessee's top retirement cities today!

Tennessee Taxes for Retirees

Tennessee is a relatively high tax state. If you combine state and local sales taxes, Tennessee is actually the state with the highest total sales tax state, 9.55% total.

But Tennessee only taxes dividends and interest, so there’s no income tax, estate, or inheritance taxes!

The tax picture for retirees is a little rosier. Tennessee doesn’t tax Social Security or retirement distributions like 401(k), IRA, or pension payouts. Tennessee also recently passed a property tax freeze for residents 65+ years old who meet certain income requirements.

Tennessee Health Care

Tennessee’s health care system isn’t highly regarded (ranking 42nd out of the 50 states in a recent study), but health care is fairly affordable and widely available for most Medicare recipients.

The average monthly Medicare Advantage premium is $18.74, and the lowest monthly premium is $6.50 for a standalone Medicare prescription drug plan. There are 7,801 total Medicare certified providers in the state, which works out to 115.2 providers per 100,000 state residents.

Price-to-Income (PTI) Ratio in Tennessee

Price-to-income is a formula used to determine an area’s affordability based on home prices and household income. The number represents the number of years of income it would take to have enough to buy a house.

The PTI ratio generally recommended for affordability is 2.6 or lower.

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The average PTI in Tennessee is 5.5 — so the average Tennessee resident would have to work five and a half years in order to afford a home. That means it's difficult for the average person to buy a house in the state.

Here's how we calculated this number:

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How to Choose the Best Place to Retire in Tennessee

Every person is unique, so you might be looking for a very different atmosphere than another retiree. But whether you’re looking for decent health care or gorgeous outdoor activities, we’ve put together a list to help you narrow down your choices.

  • 💰 On a budget? Check out Chattanooga, Johnson City, and Memphis for their low housing costs and general affordability.
  • 👭 Looking to meet people? Check out Johnson City, which has the highest percentage of 60+ year-old residents in the state!
  • 🏥 Want the best health care? Johnson City has access to tons of grade-A hospitals with the most hospital capacity per capita of any of these cities.
  • 🎉 Like going out? Knoxville has the historic Market Square district, high walkability, and the most botanical gardens of any city on this list.
  • ☀️ Want great weather? Chattanooga has a famously mild climate, averaging 44 F in the winter and 80 F in the summer.
  • 🏅 Looking for the best overall city to retire to in Tennessee? Johnson City has great affordability, a large retiree community, and excellent access to health care!

Buying a house in a different city or state can be tough when you aren’t familiar with the local market. A good local real estate agent will know the market front and back, and they’ll be able to help you find the perfect neighborhood and home for you.

Finding an agent you like and trust doesn’t have to be hard or time consuming. Our friends at Clever Real Estate make it simple to find the best Tennessee real estate agents from top-rated brokers such as Keller Williams, RE/MAX, and more. Their fully licensed concierge team will learn about your preferences and goals to connect you with the right agents for your specific needs.

Get matched with local real estate agents today!

The Best Places to Retire in Tennessee

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1. Johnson City

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What makes Johnson City such a great place to retire? We’re not sure where to start! The city has the highest percentage of people over 60 years old in the state of Tennessee, so there’s a vibrant retiree community in place, with a ton of potential for making new friends.

Johnson City also tops our list for recreation. The city is nestled in the mountains, with a plethora of lakes and rivers full of fish. It’s most known for boating and disc golf, and it has the highest average rating for hiking spots in the entire state.

But it’s not just a spot for the outdoorsy. The city also has the most museums, flea markets, bingo halls, movie theaters, art classes, and sports arenas per 100,000 residents. The bottom line — no matter how you like to spend your free time, Johnson City is a great place to do it.

Johnson City also has the most high-quality, in-network hospitals, per 100,000 residents, of any city in Tennessee.

If there’s a downside to Johnson City, it’s that it has mediocre walkability because of its position in the mountains. However, public transit here is extremely affordable — only $25 for a monthly public transit pass.

Also, retirement homes here aren’t rated very highly in Johnson City. That being said, the city’s property values (and property taxes) are the most affordable on this list.

2. Knoxville

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Knoxville has the second-highest percentage of 60-plus residents in Tennessee, so it’s clearly an in-demand destination — and it’s easy to see why. The city is the gateway to the Smoky Mountains, so some of the best hikes and picnic spots in the U.S. are only a short drive away.

The city also has the second-highest walkability rating of any city on this list, so it’s easy to take a relaxing stroll through the restaurants and shops of the historic Market Square district or one of the many botanical gardens (the most per 100,000 residents in the state).

Knoxville offers a lot of practical advantages for retirees, too. The city offers the cheapest average meal for two of any city on this list (only $45). It also boasts great health care and plenty of hospital capacity, with 0.68 quality hospitals per 100,000 residents.

Home values in Knoxville are slightly elevated, but property taxes are relatively low, and so are utility costs.

3. Chattanooga

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Chattanooga has an ideal climate — the average winter temperature is a balmy 44.2 F and the average summer temperature is a mild 80.1 F.

It also has the most hiking spots and art galleries per capita in the whole state.

Chattanooga is also the only city on this list with a senior center, so retirees here always have a place to hang out with their peers. And the city’s retirement homes have the second-highest rating of any city on this list.

While home values in Chattanooga have risen in recent years, they’re still low compared to national averages, as well as other cities on this list.

4. Nashville

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Nashville is one of the most vibrant cities in the South, if not the entire country — full of honky-tonks, live music, and the Country Music Hall of Fame.

It has experienced a historic boom in recent years, so it’s definitely the most expensive city on this list, but it has a lot to offer for the price, including a huge number of music venues, art galleries, and tours (including everything from wine tours to art tours).

The city offers excellent access to high-quality medical care facilities and practitioners. Nashville has 10 in-network Medicare hospitals within a 50-mile radius. With a population just under 2 million, that means there’s 0.5 quality hospitals per 100,000 residents.

5. Memphis

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Memphis — home of the blues, soul, and rock n’ roll — is perfect for music lovers. You can visit Elvis Presley’s Graceland mansion or see Sun Studio, where B.B. King and Johnny Cash recorded albums.

It’s also a nice place if you like a relaxing stroll in the evening or if you don’t like to drive, because it’s far and away the most walkable city on this list and offers the second-cheapest public transport.

The city houses 30 museums. If you went to two a month, it’d take you over a year to see them all! There are also three beautiful botanical gardens.

Memphis also offers great across-the-board affordability. Home values are the second-lowest of the cities on this list, and even though they’ve been climbing steeply in the last decade, they’re still far below the national average. Utility costs in Memphis are also the lowest at well under $200 a month.

Not Sold on Tennessee? Consider These Alternatives

If you’re not sold on the Volunteer State, consider these other retiree destinations that might offer more of what you’re looking for!

Asheville, North Carolina. This jewel of the mid-Atlantic has a huge retiree community and offers low property taxes, high walkability, and endless opportunities for recreation and entertainment.

Miami, Florida. This world-class city is a destination for retirees and everyone else. While property values are a little high, Miami has a large retiree population, a light tax burden, and vibrant culture to keep you young.

Hickory, North Carolina. This little-known city offers top-notch health care and great golf options, with a price tag that’s unbelievably reasonable.

Need to Sell Your Current Home?

Selling a home, moving, and buying a new home involves spending a lot of your hard-earned money at once — something that can particularly affect new retirees who are just cashing in on their retirement fund.

Our friends at Clever Real Estate have already negotiated with Tennessee's best realtors to give you low listing fees of just 1% (a fraction of the standard 3%). In fact, the average Clever customer saves $9,000 on their home sale! That’s thousands back in your pocket to help you cover moving expenses, splurge on your grandkids, or simply save for a rainy day.

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Methodology

Home Bay compared five popular Tennessee cities across a number of metrics, listed below. Each metric was normalized and then graded on a 100-point scale. The combined weighted average of the scores determined the “retirement city” score upon which the final ranking was based.

The metrics used are as follows:

  • Percent of the metro area population that is 60+ years old (18.52%)
  • Count of 5- & 4-star Medicare in-network hospitals in 50 mi radius per 100K residents (14.81%)
  • Estimated median annual property tax rate (14.81%)
  • Walkability score (14.81%)
  • Average Yelp Star Rating of Retirement Homes in the Metro (11.11%)
  • Normalized score of recreational activities based on number of options per capita and average star rating on Yelp relative to the five other cities on this list (11.11%)
  • Seasonal weather score based on highest average winter temperatures and lowest average summer temperatures for each metro (7.41%)
  • Percent increase in typical single-family home values (2012-2022) (7.41%)
  • Monthly cost of internet (3.70%)
  • Monthly cost of basic utilities for a 915 sq. ft. apartment (3.70%)
  • Cost of a meal for two at a mid-range restaurant (3.70%)
  • Cost of a monthly public transit pass (3.70%)

Sources: Centers for Medicare & Medicaid Services, U.S. Census American Community Survey, US National Centers for Environmental Information, Tax Policy Center, AARP, Zillow, Yelp, Walkscore, & Numbeo.

About Home Bay

Where your real estate voyage begins. Since 2014, Home Bay has helped thousands of readers confidently sail through their next home sale or purchase. In 2021, Home Bay was acquired by Clever Real Estate, a free agent-matching service that has helped consumers save more than $82 million on real estate fees. Research by Home Bay's Data Center has been cited by The New York Times, CNBC, MarketWatch, NPR, Apartment Therapy, Yahoo Finance, Black Enterprise, and more.

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Frequently Asked Questions About Retiring in Tennessee

What’s the cheapest place to retire in Tennessee?

Johnson City is the cheapest place to retire in Tennessee while still being close to decent hospitals. The average cost of a home in the city is just over $220,000, which is much, much lower than the rest of the country and almost half as much as Nashville. Check out our list of the top five Tennessee cities to retire in.

What are the pros and cons of retiring in Tennessee?

The pros of retiring in Tennessee are that it’s beautiful, with mountains and lakes with as much fishing and hiking as your heart could possibly desire. It’s also extremely affordable compared to the rest of the country. The cons of retiring in Tennessee are that the state has fairly high taxes and is ranked fairly low (42nd in the nation) in terms of health care quality and accessibility. Check out our list of the top five Tennessee cities to retire in.

What part of Tennessee is the best for retirees?

Johnson City ranked #1 as the best city for retirees in Tennessee, but most of Tennessee is affordable and beautiful, which makes it a great place to settle down. Check out our list of the top five Tennessee cities to retire in.

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