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It sounds as though climate is relatively similar between Kentucky and Tennessee with the primary differences having more to do with elevation more than anything. Lets get into other factors. Cost of living? Utilities? Gas prices? Food? Taxes in regards to property tax, sales tax, income tax, inheritance tax, tax deductions for health insurance, etc.
If after evaluating financial and climate aspects and all come out about equal, then you have to just go with which place you prefer or “feels” right.
Kentucky’s tax burden is higher (20th) than Tennessee (48th) according to Wallet Hubs 2019 survey, but TN has a much higher sales tax, higher fuel tax in many areas, higher price on eggs, milk and other groceries compared to KY. There are a lot of hidden fees and taxes in TN that don’t exist in KY such as tax on many auto services, barbers, athletic clubs, internet, cell service, etc. Kentucky also has a personal property tax that can be burdensome to some people.
Overall, I prefer Kentucky over Tennessee. I like the more rural, laid back feel of Kentucky. If I was at retirement age, I would choose KY over TN.
Each state is going to get tax money from you one way or another. And if they don't, it will reflect on improvements such as parks and roads.
That being said, and coming from NY where taxes are high and roads are terrible, I found the Bluegrass area of KY to be ideal for retirement. Weather is rather benign for the most part, maybe more rain than I'd like, but the area is gorgeous, Lexington is a ridiculously easy city to maneuver and offers a multitude of different shows, events, and festivals, along with the surrounding towns. COL is very reasonable, roads and parks are clean and in great shape, too.
As a young retiree looking at Kentucky as a possible future "landing spot," I've found this thread both interesting and informative. For me personally, Kentucky seems like the easy choice. I don't think I'm alone ( speaking for retired folks, if I may? LOL) when I say that cost of living is one of the MAJOR factors in deciding where to locate...for many...THEE major factor. With that in mind, it seems to me, Kentucky is the better choice.
Some will (and have) argued that Tennessee does not have a statewide income tax. True. But...Tennessee makes up for that in other ways...almost always in the form of "other" taxes and fees. Tennessee chooses to raise much of its operating revenue on these "other" taxes and fees. Conversely, Kentucky chooses to raise much of its operating revenue through a statewide income tax on its residents. Where this makes a (big) difference for me personally is, Kentucky exempts me (my pension) from their statewide income tax...and doesn't tax social security to boot! I'm truly getting (not totally) a "free ride" in Kentucky...enjoying all of the benefits that the state of Kentucky income tax provides...with little cost to myself. Whereas in Tennessee, along with all of the other residents of the state, I'd be paying those higher "other" fees/taxes and thereby, funding Tennessee's budget. Which is to say, I'd be bearing the cost of state government along with all of the other Tennessee residents...hence, NO "free ride."
State governments will raise their money one way or the other...either in the wash cycle (statewide income tax) or the rinse cycle (higher "other" taxes and fees.) In the states with no income tax, it's almost impossible as a retiree to shield yourself from and avoid those higher "other" taxes and fees. Whereas in states with an exemption on taxing pensions and social security, you're getting the financial benefit directly up front...which usually means more cash in your pocket. That's the way I see it anyways. I'd be interested to hear others thoughts.
In most other metrics, I'd say Tennessee and Kentucky are far more similar than they are different. Both are beautiful and amazing places filled with good people. You could do a lot worse than spending your retirement years in either!
I did want to make the (obvious) disclaimer that every persons financial situation is unique to themselves and that a through vetting of any state's tax laws is advisable. For a quick, easy to use guide, I personally use Kiplinger's State-by-State Guide to Taxes on Retirees, found here... https://www.kiplinger.com/tool/retir...rees/index.php
Last edited by InnerCitySoul; 02-24-2020 at 03:23 PM..
For my tax situation, they are very close but Tn gets the nod for me. As the previous poster said run your own numbers from the tool linked. I am fortunate enough to be in a higher income and higher home price range than many retirees and KY hits those harder than Tn. Tn is also slightly closer to family for me as well. I have family ties to TN too which push me that way as well.
As a long time, Texas resident, I focus on property taxes which is the primary way citizens fund the state. I can see my income needs declining as I age and property taxes do not decline as income tax would if i were in a more balanced funding state such as KY. That is a consideration that is hard to measure.
Both are pretty states and natural bounty to enjoy and super friendly people as well for new comers. I would love to be retired in Tn but wife and I are a little older now to make a big move so not planning to leave DFW for now.
For my tax situation, they are very close but Tn gets the nod for me. As the previous poster said run your own numbers from the tool linked. I am fortunate enough to be in a higher income and higher home price range than many retirees and KY hits those harder than Tn. Tn is also slightly closer to family for me as well. I have family ties to TN too which push me that way as well.
As a long time, Texas resident, I focus on property taxes which is the primary way citizens fund the state. I can see my income needs declining as I age and property taxes do not decline as income tax would if i were in a more balanced funding state such as KY. That is a consideration that is hard to measure.
Both are pretty states and natural bounty to enjoy and super friendly people as well for new comers. I would love to be retired in Tn but wife and I are a little older now to make a big move so not planning to leave DFW for now.
TN will be as crowded as DFW in a few years. Nashville is the new Atlanta. Do you really want to retire to THAT?
Also with climate change, Louisville in 2040 will have the same weather as Nashville today (read, warm).
TN will be as crowded as DFW in a few years. Nashville is the new Atlanta. Do you really want to retire to THAT?
Also with climate change, Louisville in 2040 will have the same weather as Nashville today (read, warm).
Keep in mind that, aside from Nashville with some relative crumbs to Knoxville and Chattanooga, the rest of TN is fairly rural and stagnant in population.
Keep in mind that, aside from Nashville with some relative crumbs to Knoxville and Chattanooga, the rest of TN is fairly rural and stagnant in population.
As a Tennessee native, you being born and raised and currently living in TN, I'm curious as to how you view KY vs TN. Other than the obvious taxes what do you see as the significant similarities and differences overall?
As a Tennessee native, you being born and raised and currently living in TN, I'm curious as to how you view KY vs TN. Other than the obvious taxes what do you see as the significant similarities and differences overall?
If you look at the overall state level crime rates, TN has a much higher crime rate overall than KY.
I'm from Kingsport. I know you've been looking at Maysville. Here are some rough crime rates per 1,000 residents.
You're dealing with over three times the amount of violent crime in Kingsport per person vs. Maysville. You see this kind of spread often - while a lot of TN boosters cite that TN records each charge separately for crime reporting (a felon breaking into a house and stealing a gun would likely pick up at least three charges - B&E, theft, possession of firearm by convicted felon), which elevates crime rates, the bottom line is that some TN cities and especially rural areas (at least in eastern TN) have a ton of drug-related property crime and domestic crime. Random violent crime is practically nonexistent, but there are a lot of domestic issues and such that do raise the violent crime rate. KY's crime rates, overall, are much more reasonable.
Taxes can be more deceptive than they appear at first blush. Also, taxes are just part of the "total cost" of a category.
KY has a flat income tax rate of 5% with a standard deduction of $2,650 for a single per the Tax Foundation. This is basically middle of the road income tax wise. A working high income earner is going to benefit more from TN's no income tax than a lower income retiree whose income may be at least partially sheltered from KY's state income tax.
Sales tax in TN is ~9.5% depending on location vs. a flat 6% in KY. That's not a ton of difference. With that said, KY exempts regular groceries from sales tax and TN taxes groceries at around 5.5%. I used to live in Indy and spent a good bit of time in Louisville. Groceries, at least in Louisville and Lexington, are notably cheaper than here and not taxed.
TN may have lower property tax rates in many communities, but higher property valuations, which could result in basically the same amount of proeprty taxes paid.
Personally, I like Louisville a lot more than Nashville. I think Louisville and even Lexington are underrated as cities. The whole Bluegrass region is beautiful. I wouldn't want to live in eastern KY just like I wouldn't want to live in rural east TN. I don't think I'd want to live in either WKY or WTN for the flat land, risk of tornadoes, etc.
You're dealing with over three times the amount of violent crime in Kingsport per person vs. Maysville. You see this kind of spread often - while a lot of TN boosters cite that TN records each charge separately for crime reporting (a felon breaking into a house and stealing a gun would likely pick up at least three charges - B&E, theft, possession of firearm by convicted felon), which elevates crime rates, the bottom line is that some TN cities and especially rural areas (at least in eastern TN) have a ton of drug-related property crime and domestic crime. Random violent crime is practically nonexistent, but there are a lot of domestic issues and such that do raise the violent crime rate. KY's crime rates, overall, are much more reasonable.
Taxes can be more deceptive than they appear at first blush. Also, taxes are just part of the "total cost" of a category.
KY has a flat income tax rate of 5% with a standard deduction of $2,650 for a single per the Tax Foundation. This is basically middle of the road income tax wise. A working high income earner is going to benefit more from TN's no income tax than a lower income retiree whose income may be at least partially sheltered from KY's state income tax.
Sales tax in TN is ~9.5% depending on location vs. a flat 6% in KY. That's not a ton of difference. With that said, KY exempts regular groceries from sales tax and TN taxes groceries at around 5.5%. I used to live in Indy and spent a good bit of time in Louisville. Groceries, at least in Louisville and Lexington, are notably cheaper than here and not taxed.
TN may have lower property tax rates in many communities, but higher property valuations, which could result in basically the same amount of proeprty taxes paid.
Personally, I like Louisville a lot more than Nashville. I think Louisville and even Lexington are underrated as cities. The whole Bluegrass region is beautiful. I wouldn't want to live in eastern KY just like I wouldn't want to live in rural east TN. I don't think I'd want to live in either WKY or WTN for the flat land, risk of tornadoes, etc.
Like the major tornado in downtown Nashville this morning?
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