Tennessee has no state income tax — Social Security, IRA withdrawals, pension payments, capital gains, and dividends are all completely exempt since the Hall Income Tax was eliminated in 2021. Combined with effective property tax rates averaging approximately 0.56% (among the lowest in the South), Tennessee ranks second among all 50 states for retirement in 2026. The challenge is choosing the right city. Tennessee’s retirement markets span from the mountain river setting of Chattanooga to the upscale Nashville suburbs, with dramatically different price points, healthcare depth, and lifestyle profiles — and a combined sales tax of approximately 9.55% that is the same regardless of which city you pick.
Quick Comparison: Best Tennessee Retirement Cities 2026
| City | Median Home Price | Cost of Living | Healthcare | Best For |
|---|---|---|---|---|
| Chattanooga | ~$290,000 | Low-Moderate | Good | Mountains, river, overall balance |
| Knoxville | ~$305,000 | Low-Moderate | Very Good | Smoky Mountains, university town |
| Maryville | ~$370,000 | Moderate | Good | Quiet suburbs, very low crime |
| Johnson City / Tri-Cities | ~$255,000 | Low | Good | Maximum affordability |
| Murfreesboro | ~$390,000 | Moderate | Good | Nashville access, growing amenities |
| Franklin / Brentwood | ~$670,000+ | High | Excellent | Nashville proximity, upscale living |
Median home prices approximate as of Q1 2026.
Top Tennessee Cities to Retire in 2026
Chattanooga — Best Overall
Chattanooga is Tennessee’s strongest overall retirement city in 2026. The Tennessee River runs through the city’s heart, Lookout Mountain rises on its southern edge, and the downtown revitalization of the past decade has produced a walkable arts district, excellent restaurants, and the Tennessee Aquarium. The Riverwalk trail system runs 16 miles along the riverbank. Median home prices around $290,000 are below Knoxville and far below Nashville’s suburbs.
- State income tax: None
- Property tax: ~$1,624/year on a median home (effective rate ~0.56%)
- Sales tax (combined): ~9.25% (Hamilton County)
- Healthcare: CHI Memorial Hospital and Erlanger Health System (Level I Trauma); Erlanger is the primary teaching hospital for the University of Tennessee College of Medicine Chattanooga campus
- Medicare Advantage plans available: 20+ in Hamilton County (2026)
- Best for: Retirees who want outdoor recreation, a revitalized downtown, and the best balance of cost and quality in Tennessee
Knoxville — Best for Healthcare and University Town Living
Knoxville sits at the foot of the Great Smoky Mountains — the most visited national park in the US — and is home to the University of Tennessee’s main campus and UT Medical Center, a Level I Trauma Center and teaching hospital. That combination gives Knoxville a younger cultural energy and healthcare access well above what a city of its size typically offers. The Old City and Market Square area anchor an active downtown. Median homes around $305,000.
- State income tax: None
- Property tax: ~$1,708/year on a median home (~0.56%)
- Sales tax (combined): ~9.25% (Knox County)
- Healthcare: UT Medical Center (nationally affiliated teaching hospital and Level I Trauma), Covenant Health (regional network with 10 hospitals across East Tennessee)
- Medicare Advantage plans available: 25+ in Knox County (2026)
- Best for: Retirees who want university-town culture, Great Smoky Mountains access, and strong academic medical care in one package
Maryville — Best Knoxville Suburb
Maryville sits 16 miles south of Knoxville in Blount County and consistently ranks among the safest cities in Tennessee. Maryville College gives the community an educational anchor, the Great Smoky Mountains are 30 minutes away, and Blount County has some of the lowest effective property tax rates in East Tennessee. Retirees who want the full benefit of Knoxville’s healthcare (UT Medical Center is 30 minutes north) in a quieter small-city setting frequently land here. Farragut, a western Knoxville suburb, is the higher-cost but more amenity-rich alternative.
- State income tax: None
- Property tax: ~$2,072/year on a median home (Blount County rates slightly higher than Knox)
- Sales tax (combined): ~9.75% (Blount County)
- Healthcare: Access to UT Medical Center (30 min) and Covenant Medical Center Maryville (regional)
- Best for: Retirees who want a small-town pace, very low crime, and access to Knoxville’s infrastructure without living in Knoxville
Johnson City / Tri-Cities — Most Affordable
The Tri-Cities region — Johnson City, Kingsport, and Bristol — occupies Tennessee’s northeastern tip, tucked into the Appalachian highlands along the Virginia border. It is the most affordable major retirement market in Tennessee, with Johnson City median home prices around $255,000 and a cost of living roughly 20% below the national average. The mountains, rivers, and Appalachian Trail are all nearby. Ballad Health’s Johnson City Medical Center is a Level I Trauma Center serving the entire upper northeast region of the state.
- State income tax: None
- Property tax: ~$1,428/year on a median home (~0.56%)
- Sales tax (combined): ~9.5% (Washington County)
- Healthcare: Ballad Health (Johnson City Medical Center — Level I Trauma; Holston Valley Medical Center in Kingsport — Level II); Ballad is the sole regional healthcare provider for both Northeast Tennessee and Southwest Virginia
- Medicare Advantage plans available: 15–20 in Washington County (2026) — fewer options than Nashville or Knoxville
- Best for: Retirees who want maximum affordability, Appalachian outdoor access, and solid regional healthcare on a fixed income
Murfreesboro — Best Nashville Suburb for Value
Murfreesboro is the largest suburb of Nashville — about 35 miles southeast of the city — and has grown into a mid-size city with its own retail, dining, and healthcare infrastructure anchored by Middle Tennessee State University. It is significantly more affordable than Franklin or Brentwood while still providing access to Nashville-area employers and Vanderbilt University Medical Center (45 minutes via I-24). Median homes around $390,000 represent meaningful savings over the prime Nashville suburbs.
- State income tax: None
- Property tax: ~$2,184/year on a median home (~0.56%)
- Sales tax (combined): ~9.75% (Rutherford County)
- Healthcare: StoneCrest Medical Center (regional, 200+ beds); access to Saint Thomas Rutherford for additional coverage; Vanderbilt University Medical Center is 45 minutes north
- Medicare Advantage plans available: 20+ (shares coverage with broader Nashville market)
- Best for: Retirees who want Nashville proximity and urban amenity access without Franklin or Brentwood price points
Franklin / Brentwood — Best for Upscale Nashville Living
Franklin and Brentwood are the most desirable — and most expensive — retirement communities in Tennessee. Williamson County consistently ranks among the wealthiest counties in the South, with top-tier schools, very low crime, upscale dining and retail, and direct access to Vanderbilt University Medical Center (30 minutes north in Nashville). The trade-off is price: Franklin median homes exceed $670,000 and Brentwood regularly tops $800,000. For retirees with significant assets who want Nashville’s full amenity profile plus safety and community character, there is no better option in Tennessee.
- State income tax: None
- Property tax: ~$3,752/year on a $670,000 home (~0.56%)
- Sales tax (combined): ~9.75% (Williamson County)
- Healthcare: Access to Vanderbilt University Medical Center (nationally ranked), Williamson Medical Center (local), TriStar Centennial (Nashville), and Vanderbilt’s full specialist network
- Medicare Advantage plans available: 30+ (broadest availability in Tennessee, anchored by the Nashville market)
- Best for: Higher-income retirees who prioritize community prestige, safety, Vanderbilt healthcare access, and Nashville’s cultural and airport infrastructure
Tax Example: What $65,000 Retirement Income Looks Like in Tennessee
A retired couple drawing $65,000/year (Social Security + IRA withdrawals) in Chattanooga:
| Expense | Tennessee (Chattanooga) | Virginia (Roanoke) | North Carolina (Asheville) |
|---|---|---|---|
| State income tax | $0 | ~$1,600 | ~$2,925 |
| Property tax (median home) | ~$1,624 | ~$2,216 | ~$2,072 |
| Sales tax on $30,000 spending | ~$2,775 | ~$1,719 | ~$2,097 |
| Estimated annual total | ~$4,399 | ~$5,535 | ~$7,094 |
Tennessee’s sales tax is the highest on this list — but the income tax elimination more than compensates at most income levels. The total tax burden in Chattanooga is still $1,136 below Roanoke and $2,695 below Asheville on this income level.
Key Considerations for Tennessee Retirees in 2026
Sales tax planning: Tennessee’s combined sales tax of approximately 9.55% is one of the highest in the US. Tennessee applies a reduced 5% rate on food (versus the 7% general rate) but does not fully exempt groceries the way Georgia, South Carolina, or Colorado do. Retirees who spend heavily on consumer goods should factor this into their total cost of living calculation — on $35,000 in annual spending, the 9.55% rate generates roughly $3,342 in sales tax.
Nashville market appreciation: Nashville and its prime suburbs (Franklin, Brentwood, Hendersonville) have seen dramatic price appreciation over the past decade. The East Tennessee cities — Chattanooga and Knoxville — remain significantly more affordable while offering their own strong outdoor recreation, university-town culture, and regional healthcare.
Great Smoky Mountains access: The Smokies are the most visited national park in the US. Retirees in Knoxville are 45 minutes from the park entrance; Chattanooga is about 90 minutes. This proximity is a legitimate, sustained lifestyle asset — not just a retirement brochure talking point.
Medicare Advantage: Tennessee has solid Medicare Advantage availability in its main metro areas. Nashville and Knoxville have 25–30+ plans per county. Murfreesboro shares Nashville’s market. Johnson City / Tri-Cities has fewer plan options; traditional Medicare is a reasonable choice there.
Rural healthcare: Outside the main metro areas, Tennessee’s healthcare infrastructure thins significantly. Retirees who need regular specialist access should prioritize Chattanooga, Knoxville, or Nashville-adjacent communities over rural East or West Tennessee.
Related reading: Retiring in Tennessee 2026 | Best States to Retire in 2026 | Best Cities to Retire in the US | Cheapest Places to Retire | Best Cities in North Carolina | Best Cities in Florida | Best Cities in Texas | Best Places to Retire hub
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