Most workers would probably rather retire in Naples than Nashville.
But maybe it's time to give Tennessee a chance. Nashville is shaping up to be the country's newest boomtown and Tennessee was just listed as the No. 1 state to retire in by Bankrate.com.
These days it seems like a new retirement list comes out every week, always with another state ranking supreme.
So we decided to chat with Chris Kahn, a research and statistics analyst for Bankrate, to find out exactly what sets Tennessee a cut above the rest.
A low cost of living: Most of today's workers share a common retirement fear –– outliving their money. That's why cost of living is of the utmost importance when picking a place to live long-term. "You should not plan as if you're going on vacation," Kahn said. "You should plan as if you're going to be paying the bills for the next 10, 20 years." Bankrate found Tennessee's cost of living to be the second lowest in the country, just behind Oklahoma.
Taxes: Taxes are enemy no. 1 to retirees, since many will wind up living on a fixed income. Tennessee carries the third-lowest tax burden out of all 50 states and Washington D.C. The state is noted for having no income tax. But beware the 6% tax on interest and dividend income (capital gains are exempt). The state's sales tax rate is 7%. State inheritance tax laws only allow tax-free transfers to a spouse.
Access to medical care: Even with Medicare benefits, a 65-year-old couple could need nearly $400,000 to cover out-of-pocket health care costs during retirement, according to research by the Employee Benefit Research Institute. That means picking a retirement spot with affordable medical care is crucial. Tennesseans spend about $6,411 per capita on health care, below the national average of $6,815. Inpatient hospital care is about $1,462 a day versus the national average of $1,910, according to the Kaiser Foundation.
Average temperature: Who wants to spend their golden years digging their car out of the snow and worrying about a Nor'easter? Tennessee is one of the sunnier states in the country. The state ranked 15th nationwide for its temperatures, meaning its weather is moderate most of the year, Kahn said.
Crime: Seniors are one of the most vulnerable age groups for crime, and unfortunately, prevention isn't Tennessee's strong suit. The state ranked No. 47 out of all states for the highest levels of property crime and violent crime per capita, Kahn said. "The crime rate is very high compared to the rest of the country," he said. However, as with all states, crime rates typically fall the farther a person moves away from metropolitan areas.
The bottom line: Whether you're months or decades away from retiring, everyone's priorities for picking their final destination will vary, whether it's being close to a coastline or being close to family.
"A lot of folks, when they're deciding where to go, they have their dream place — but it's not necessarily the cheapest or (the place) with the lowest taxes," Kahn said. "It’s fine to keep having those dreams, but be sure to be informed before you go."
