Forget Florida, Retire In This Affordable State That Doesn't Tax Income Or Social Security

People sometimes refer to Florida as the Retirement State. With abundant beaches, warm weather, and no state tax on income or social security, it's easy to see why. However, there's another state that doesn't tax social security or income, and its lower cost of living lets retirees keep even more money in their pockets: the Volunteer State of Tennessee.

In a ranking of the most affordable states by the Missouri Economic Research & Information Center (MERIC), Florida ranks in spot No. 31, with prices slightly above the national average, while Tennessee comes in as the ninth most affordable state with the overall cost of living 11.1% below the national average. More specifically, housing is nearly 20% below the U.S. average in Tennessee. 

According to Zillow, the average house costs $370,320 nationwide as of June 2026. Florida's state average is higher, at $377,578, whereas Tennessee's comes in at $336,445. Where you live in Tennessee can make a difference, too. According to Salary.com, based on real-time Consumer Price Index information and salary benchmarks from more than 300 U.S. cities, the most expensive major cities in Tennessee are Nashville, Henderson, and Franklin, while the most affordable ones are Johnson City, Kingsport, and Jackson. Per StateDemographics.com data, which is based on the U.S. Census Bureau ACS 5-Year Estimates, Linden ($80,000), Trezevant ($96,200), and Gleason ($83,700) have the lowest home values in the state. 

Along with inexpensive housing, Tennessee offers affordable living in other ways, too, with grocery prices 4.2% less than the national average, according to MERIC. Using the tip favored by frugal shoppers — to always check the unit price — can make groceries even more budget friendly. Retirees in the state can also save on utilities, which are 15.5% below the national average, and transportation, which is 12.8% less expensive.

Healthcare costs in Tennessee are 11.3% lower than the national average, according to MERIC. Meanwhile, U.S. News & World Report has recognized 10 facilities in the state as Best Regional Hospitals, with Vanderbilt University Medical Center ranked the No.1 healthcare facility in Tennessee.

Besides the financial aspects of deciding where to retire, many people prioritize climate. In fact, a 2024 Lending Tree survey shows that, of the 40% of people who didn't live in a climate they liked, half planned to move to a place with their preferred weather within a year. Although Florida has a reputation for sunshine, BestPlaces monitors temperatures and humidity levels, giving that state a 6.8 out of 10 for comfort, whereas Tennessee comes in at 7.3.  Plus, nearly one in three people in Tennessee are aged 55 and up, meaning that retirees can more easily find people of their age for socialization.