How to Retire Early in Tennessee

Retirement isn’t just about slowing down—it’s about living fully, on your own terms.
If you’ve ever dreamed of waking up to mountain views, walking scenic trails instead of commuting, and spending your days how you want—not how a schedule dictates—then it’s time to talk about how to retire early in Tennessee.

Tennessee is becoming a standout choice for those seeking a balance of affordability, beauty, and lifestyle. Whether you’re drawn to the quiet charm of small towns or the cultural pulse of cities like Nashville or Chattanooga, early retirement in the Volunteer State is within reach—with the right planning.

Why Tennessee? The Allure of an Early Retirement Lifestyle

People often imagine early retirement as a luxury reserved for the ultra-wealthy. But Tennessee flips that script. Thanks to its low cost of living, tax advantages, and diverse terrain, it’s now one of the most practical early retirement destinations in the U.S.—especially for those focused on stretching every dollar while maximizing quality of life.

The state has no income tax, including on retirement income, Social Security, and 401(k) withdrawals. That alone can make a significant difference in your budget. Pair that with affordable real estate, mild seasons, and an expanding network of healthcare facilities, and you’ve got a solid foundation for a long-term retirement strategy.

Step 1: Build a Long-Term Early Retirement Plan That Works

Before packing up and heading to Tennessee, the most important move is mapping out a comprehensive early retirement plan that suits your lifestyle goals. Early retirement doesn’t mean you’ll stop working altogether—it just means you’ll stop depending on work to survive.

Start by calculating how much you’ll need annually to cover:

• Housing and utilities
• Food and healthcare
• Transportation
• Leisure and travel
• Emergency savings

Use retirement planning tools or consult a certified financial planner to project your expenses and income sources like investments, pensions, annuities, or side income.

Make sure your early retirement plan includes:

• A withdrawal strategy (e.g., the 4% rule or dynamic spending models)
• Investment rebalancing schedules
• Roth conversion ladders for tax efficiency
• Inflation buffers for long-term sustainability

Including long-term care planning is also wise—health can be unpredictable, and early retirees should anticipate needs beyond basic insurance coverage.

Step 2: Choose the Best Towns for Your Retirement Goals

Once you’re confident in your finances, the fun begins: picking your new home base. Tennessee offers a blend of city conveniences, mountain escapes, and lakeside charm—without the high costs of coastal states.

Here are a few early retirement destinations in Tennessee that blend lifestyle and affordability:

1. Franklin, TN

Close to Nashville but with a small-town vibe, Franklin mixes Southern charm with upscale amenities. Think boutique shopping, historic districts, and excellent medical facilities.

2. Maryville, TN

At the foothills of the Smoky Mountains, Maryville is ideal for outdoor lovers. It’s peaceful, affordable, and offers a welcoming community feel with close proximity to Knoxville.

3. Chattanooga, TN

With an artsy downtown, low taxes, and robust infrastructure, Chattanooga is great for retirees who want walkability, culture, and nature—all in one.

4. Cookeville, TN

For those seeking maximum value, Cookeville boasts incredibly low housing costs and access to three nearby lakes. It’s also home to Tennessee Tech University, giving it an energetic, youthful pulse.

Step 3: Set Up Income Streams That Support Freedom

One of the most critical elements of how to retire early in Tennessee is building passive and semi-passive income streams. Without employer-sponsored benefits, your money needs to keep working long after you’ve clocked out.

Retirees in Tennessee often lean on a combination of:

• Dividend-paying stocks and ETFs
• Rental income (Tennessee’s short-term rental market is growing)
• Roth IRA and Traditional IRA withdrawals
• Part-time remote work or consulting (especially popular in creative fields and tech)
• Selling appreciated assets strategically with low capital gains exposure

Many also explore tax-efficient income structures, such as laddered bonds or annuities with guaranteed lifetime payouts.

Step 4: Consider Healthcare, Community, and Lifestyle Costs

Tennessee is known for its excellent hospital systems, especially in cities like Memphis, Nashville, and Knoxville. For early retirees under 65 who don’t yet qualify for Medicare, marketplace health insurance or health-sharing plans can fill the gap.

It’s also smart to factor in:

• Proximity to specialists and hospitals
• Availability of fitness and wellness programs
• Social clubs, churches, and interest-based communities
• Walkability or public transit for non-drivers

Early retirees often overlook emotional planning—the question of what now? Leaving the workforce can trigger identity shifts, boredom, or isolation. Staying connected with purpose-driven groups or volunteering opportunities can keep you engaged and fulfilled.

Step 5: Optimize Your Move with Smart Housing Choices

Housing is usually the largest retirement expense—so it’s where you can save (or lose) the most. Tennessee offers a wide range of home prices depending on the region, from lakeside cabins to downtown lofts.

Here’s how early retirees are reducing housing costs:

• Downsizing to single-story homes
• Choosing HOA communities with included amenities
• Buying in rural or developing counties where land is cheaper
• Exploring intentional co-living or house hacking

Some also take advantage of property tax relief programs for seniors, which vary by county. And because there’s no state estate tax, many retirees choose to age in place confidently.

Step 6: Understand Local Taxes, Laws, and Incentives

In addition to being income-tax-free, Tennessee offers a friendly tax environment for retirees:

• No tax on pension or retirement plan distributions
• Low property tax rates compared to national averages
• No tax on Social Security income

There are also homestead exemptions, senior tax freeze programs, and veteran benefits that can reduce your annual costs further. Be sure to check your county’s offerings and eligibility guidelines.

Step 7: Embrace a Slower, More Intentional Way of Living

Early retirement isn’t just a financial achievement—it’s a lifestyle shift. In Tennessee, that shift means more mornings on the porch with coffee, weekend hikes in the Appalachians, slow-cooked meals, and a deeper connection to the land and people around you.

Many early retirees find that downsizing their expenses upgrades their life. They trade long commutes for long walks, errands for gardening, and meetings for moments that matter.

Final Thoughts: Making the Leap with Confidence

If you’re wondering how to retire early in Tennessee, remember it’s a blend of math, mindset, and mission. The numbers need to work—but so does your vision. From tax advantages and healthcare access to community support and low-cost housing, Tennessee checks many boxes for would-be early retirees.

Whether you want to settle in the hills of East Tennessee or near the musical heart of Nashville, an early retirement plan that’s long-term and location-smart can open up a life of freedom, joy, and financial independence.

Start your journey now. Because life isn’t just about what you save—it’s about how you live.