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Dueling Retirement States: The Mid-South, a Cost-Effective Choice

Category: Best Retirement Towns and States

July 11, 2017 — In this installment of our “Dueling Retirement States” we compare and analyze retirement in the states that we will call the mid-South: Georgia, Tennessee, Kentucky, and Alabama. See Further Reading at bottom for links to the other regional comparisons in our series, such as The Carolinas, Gulf States, and Florida vs. Arizona.

These states can provide many different retirement lifestyles. They have mountains, lakes, cities, and small towns. Beyond that, they offer some of the most inexpensive living situations available in the U.S. Your retirement dollar can definitely go farther here, especially with their generally tax-friendly reputations. Winters in these states are much milder than in the most of the rest of the country, with a climate that is amenable to an active retirement year round. They are also generally uncrowded and less congested than many other retirement locations.

In this article we will compare and contrast these four southern states:
(links go to our mini-retirement guides to each state). Population and income data is from American Fact Finder-U.S. Census Bureau.

A Few Facts
Georgia is the largest state by population and also the youngest and most affluent. In 2015 there were an estimated 4.9 million people in Alabama, 10.3 million in Georgia, 4.4 million in Kentucky, and 6.6 million in Tennessee.

Georgia has the lowest percentage of 65+ population of the 4 states – 11.9%. The other states were almost identical: 14.9% in Alabama, 14.4% in Kentucky, and 14.6% in Tennessee. The total U.S. % over 65 (2015) is 14.1%.

Economics and Home Prices – All 4 Under the U.S. Median.
All four states have median household incomes well below the national figure of $53,889: Alabama ($43,623), Georgia ($49,620), Kentucky ($43,740), and Tennessee ($45,219)

All four states have statewide home values well below the nationwide Zillow Home Index of $199,200 (July 2017). Alabama has the least expensive home prices of the 4 states ($126,300), while Georgia had the highest home prices at $155,800. Homes in Kentucky had a Zillow Index of $134,400 and Tennessee was second highest at $141,600. Tennessee experienced the highest one year price appreciation (8%) of any of these states. All states represent great real estate bargains compared to the rest of the country, where retirees also enjoy some of the lowest property taxes in the U.S. Source: Zillow

Tennessee mountains and lakes, as seen Fairfield Glade

2017 Home Price
2017 % Chge vs. Yr.ago

Home Prices by City
Home prices in this section are from the National Association of RealtorsĀ® (NAR), which generally publishes the most reliable sales data (and are generally higher than those reported by Zillow). As is the case everywhere, home prices vary tremendously from neighborhood to neighborhood and city to city. Places closer to cities and affluent suburbs will generally command higher prices. Looking at Alabama provides a good example, where in Birmingham/Hoover Metro the median selling price in 2017’s first quarter was $183,000 vs. $192,800 in Huntsville and $134,000 in Mobile.

Over in Georgia, Atlanta was closer to the national median with a selling price of $182,800. Kentucky and Tennessee housing prices tend to be much more inexpensive: Bowling Green (KY) at $152,000, Knoxville (TN) at $164,300, Memphis (TN) at $150,100 and Chattanooga (TN) $167,700.

View near Chattanooga, TN

Cost of Living
As mentioned at the outset, these states are some of the most inexpensive places to retire in the country.
The MERIC Index of cost of living (Ranked by lowest):
Alabama – 12th
Georgia – 13th
Kentucky – 7th
Tennessee – 5th

The Cost of Living + Rent Index shows that all of these states have a lower than average cost of living. Their Index shows 80 for Atlanta, 69 for Mobile, 78 for Memphis, Huntsville at 66, Knoxville at 67, Athens (GA) at 63. For comparison, New York City is 100, so any index below that is comparatively less expensive. Unfortunately, data on cost of living is not readily available for many of the smaller cities in these states, but it is probably safe to assume they are for the most part even lower than in the larger cities.

Generalizing about crime on a state by state basis is generally meaningless. Even looking at a rates by city is difficult (where, no surprise, crime rates will usually be higher than in small towns) because crime in different parts of the metro and in the suburbs will vary so much by quantity and by type. We recommend going to for city crime rates, or better yet, if you are interested in an area visit it and talk to people who live there to get a feel if crime is a problem.

Fountain in the former utopian community of Fairhope, AL

The states share fairly similar weather; much warmer than in the Northeast or Midwest, but not as warm in winter as in Florida. Being the furthest south, Georgia (avg. temp 63 F., ranked 5th hottest state in the USA) and Alabama (7th) are the hottest of the four. Kentucky has an avg. temp of 56 and is the 15th warmest state, whereas Tennessee is ranked 14th. Areas in the mountains, particularly in Tennessee and Kentucky, will be cooler than at lower elevations. In general these states are generally hot and humid in the summer with almost daily showers, and relatively mild and dry during the winter. As one example, Mobile (AL) has average January temperatures ranging from 40 to 61, with July temps from 72 to 90.

Tax Environment Comparison
Of these states Tennessee is the most tax-friendly – it has no income tax on earned income, although it does tax dividends and interest. None of the other states have particularly high marginal income tax rates – the highest of the bunch is Georgia which maxes out at 6%. None of the states tax Social Security, and most have generally favorable treatment for other retirement income. All of the states except Kentucky rank in the bottom half for their State tax burden, although it is near the mid-point for the U.S. Tennessee has the highest sales tax at 7%.

These 4 states have some of the lowest property tax rates in the nation. Although Kentucky has the highest property taxes of the group, it is still only the 27th highest in the country. Alabama has the lowest property taxes; it ranks 49th in the nation. Most of these states offer senior property tax exemptions of some type. The data below is from the Tax Foundation and For more detail about taxation and other information about each state see our mini State Retirement Guides.

Tax Burden (2012)
State Inc Tax
Int & Div only
State Sales Tax*
Prop Tax Rank

*Localities may add additional sales taxes

Taxation of SocSec
Tax on Pensions
Inher/Estate Tax

*KY exempts up to $41,110 in pension income

Where to Live by State – from our Top 100 List
All of these southern states have many interesting places to retire. There are plentiful outdoor recreational possibilities.
There are 11 cities and towns from the mid South on our 2016 List of the Most Popular Places to Retire. Those included 5 from Tennessee, 4 from Georgia, and 2 from Alabama (ranks are shown below in ( ):

Tennessee has several large cities like Memphis and Nashville, along with many small towns. Several cities and towns in Tennessee are popular as retirement communities, particularly lake towns like the golf capital of Tennessee, Crossville (#53). Paris (#10) is a small town of about 10,000 in northwest Tennessee, 15 miles from the vast and popular Land Between the Lakes recreation area. Nashville is the country music capital of the world. Maryville (#39) is a small town near Knoxville (#36) that has two great colleges in it. Johnson City and Franklin are interesting towns in the northeastern and central parts of the state. Chattanooga was the #21 most popular place to retire on our 2016 list.

Georgia has a variety of towns that are great for retirement. Many people would like Atlanta where there is so much going on. The state also has any number of active and 55+ communities of all types and sizes:
– You can live near the Ocean on a barrier island like St.Simons (#35)
– Charming Savannah (#29) is one of the earliest planned cities anywhere.
– A college town like Athens (#30)
– Riverside in Augusta
– A downstate, Florida-like town, Thomasville.
Blue Ridge (#31) is a small town in the mountains.
– Bustling Atlanta is the biggest city in the state and this part of the South. It makes for an interesting place to retire.
– Scenic and peaceful Lake Lanier offers a laid back retirement for those who like living on or near one of the biggest lakes in the country.

Fairhope (#36), a former utopian community near Mobile, is one of the most interesting retirement communities in the U.S. Another top-rated place to retire is historic small town of Eufaula.
Gulf Shores is a beach town on Alabama’s Gulf Coast. (#79).

Berea – One of the fastest growing towns in America, Brea also one of the most unusual small towns in the south. It was was founded by abolitionist missionaries in 1853. They established Berea College,where tuition is free – but students must work. Arts and crafts are very big in Berea.
Bowling Green – A delightful college town of about 52,000 in southwest Kentucky is about an hour’s drive north of Nashville. Bowling Green has been cited by Forbes Magazine (Best Small Places to Do Business) as well as making a list of the 2007 ‘Top Ten Value Towns’ for retirees.
Murray – Situated near one of the biggest man-made lakes in the country, it offers low-cost living, a great climate, and unlimited recreation. Murray State University, a top institution, makes this a delightful college town.

55+ and Active Adult Communities
These states have a variety of 55+ and active communities to choose from. Many are located on huge lakes or near interesting towns. You can find many more interesting places to retire in these states listed in our State Directories.

Bottom Line
The southern states all offer superb recreation and many types of places to live. They are all inexpensive and generally tax-friendly, making them desirable for any boomer anxious to move away from state taxation. People who already live in the south will obviously feel the most at home in this region. Some folks from other parts of the country might find that it takes an adjustment to living in a slightly different culture. For them a bigger city or area with many transplanted retirees might feel more comfortable. See our article, “Can a Yankee Find Retirement Happiness in the South” for many Member comments on this topic.

For further reference:
State Retirement Guides
Dueling Mountain States: NV, CO, UT, ID, WY, MT
Retirement 101 Mid-Atlantic States: MD, DE, VA, NJ
Florida Retirement 101
Dueling Carolinas: NC vs. SC
Dueling States: Arizona vs. Florida
California Retirement 101
Retirement in the Southwest: AZ, NM, and Utah
Comparing the Pacific Northwest: Oregon and Washington for Retirement

Comments? We and all your fellow members love to know what you are thinking. Do you live in one of these states, or are you thinking of retiring there? Please share your thoughts about retirement in these states in the Comments section below.

Posted by Admin on July 11th, 2017


  1. Whatever you do, don’t settle in the Memphis, TN area. We lived there for 12 years and are so glad we no longer live there. Crime, racism, filthy city, corrupt politicians. I could go on and on.

    by Norma — July 12, 2017

  2. Be cautious. No income tax in Tennessee BUT sales tax is close to 10% and food prices are higher than New England. Property taxes are high in the city limits and education is NOT a priority. We are in SE TN and I have a number of friends who retired here and are making it work. I will miss them. We came for work and are going back to New England to retire. Higher taxes, yes, but better quality of life for us.

    by HEF — July 13, 2017

  3. I’m a native Southerner, born and raised, and I would second the first two comments above to any city in the states you mention. We just moved from Atlanta to Colorado after living in the ATL area for fifty years. Atlanta has horrible crime, miserable traffic, heat and humidity. If you are young and looking for economic opportunity it is ok, but ABSOLUTELY NOT a place I would recommend to retire. BTW, before retiring my occupation had me travel all over the US so I have a pretty good point of reference.

    by Scott James — July 19, 2017

  4. Scott…..we are a “little” behind you in that we just vacated suburban ATL after 30 years. I, too, traveled a bit but we discovered Fairhope, AL on a Gulf Shores vacation 6 years ago. We came back each year at various times and also looked comparatively at several other retirement clty possibilities. We pulled the re-lo trigger a month ago and haven’t looked back for most of the reasons you mentioned and several others except the heat and humidity…….that was an acceptable trade-off to the much lower overall cost of living.

    by JeffH — July 20, 2017

  5. I moved Scott’s latest comment and answer to Trish and Loral to a different Blog, as the conversation is now heading West:
    Dueling Mountain States For Retirement: CO, ID, MT, NV, UT, and WY

    by Admin — July 20, 2017

  6. To JeffH,

    Can you tell me about Fairhope, AL? It is one of the places on my list for relocating to from New York. Are insurance rates really high? We aren’t really a retired couple, my husband plans on working and staying in NY for several more years but I need to get out of the north due to severe seasonal affective disorder and a general dislike of the northeast…just want warmth!! I have a 13-year-old daughter that will be moving with me so schools are still a consideration and it looks like Fairhope has a great school district… we would want to have access to lots of outdoor activities, especially water ones. Any feedback on the area would be great!!

    by ljlawson2 — July 29, 2017

  7. ljlawson2,
    Check out Fairhope, AL on It has a score of 82 which is excellent. Click on the city and the site will open up to provide good information on a variety of criteria.

    by Karen C — July 30, 2017

  8. ljlawson:

    I have had my eye on Fairhope since I first visited there 10 years ago. They were still recovering from a devastating hurricane…but I thought the town.

    I have been researching as much as I can…and the problem is the town has DOUBLED n population in the last ten years…..they are seriously experiencing some growing pains. Lots of building going on. I understand one contractor alone is in the process of constructing 1000 new homes in Fairhope.

    I have friends that are from the area…they visit periodically…they are noticing a lot more traffic in the area.

    All of this concerns me as I have experienced a huge growth in the area I have lived in the for the past forty years in
    the Atlanta suburbs. For the last twenty years this has not at all been the quiet community we settled in.

    That is all I can really tell you…I, too would love to hear from some people that have retired there in the past 10 years.

    Good luck! Roberta

    by Roberta Bengtson — July 31, 2017

  9. Lets all just go join the Amish!

    by Jennifer — July 31, 2017

  10. Jeff: Is the cost of living actually lower in Fairhope than suburban Atlanta? What about insurance? The Mobil bay area
    has had a few bad hurricanes, flooding etc….does this make your property insurance very high?

    What about the building and population ” boom” in recent years? Are you seeing signs of the town changing?

    Loved Fairhope….you might say love at first sight, however, I definitely need for any move I make to be my last. I have lived in Gwinnett for the past 40 years………it could not be more different today compared to the place we moved to in the 70’s. I would say in the past 10-20 years suburban Atlanta has really changed for the worse.

    Hope your are enjoying Fairhope……it is a lovely town.

    by Roberta Bengtson — August 1, 2017

  11. Roberta/ljlawson2: In today’s world, a lot is shifting and nothing is applicable across the board. Yes, Fairhope is growing, deservedly so given the wide publicity, baby boomer retirements, word of mouth, proximity to the beautiful and popular Gulf and Orange Beach areas and personality tenor of the area. Yes, there is more traffic with this growth compared to its historical levels. No, it is nothing we have found to be objectionable or intolerable or even close to other areas we looked at. To mention Atlanta traffic and Fairhope in one sentence as a criteria is not even close. We can get more done in one day of multiple chores than we ever could in ATL. The latest population numbers put us right around 19,500. Yes, costs are lower with qualifiers (one exception being sales tax). We looked at targeted areas of FL, SC, GA and this area. For what mattered, overall cost wise to us, none compared. That included the biggies of medicare and attendant other insurance, property tax, property insurance (buying new saves a ton of money with a gold-certified construction), and home prices. Yes, the weather is quite humid at times, (today is beautiful), we do have some mosquitoes and no-see-ums, and it does rain (hard at times with overall nearly as much annual rainfall as Seattle.) Yes there are weather risks….but we lived under those at times in ATL having had a tornado go thru our neighborhood in ’94 and many other weather challenges (eg. ice, tornado warnings, etc.). Yes, you won’t have the direct flight advantages of flying out of the ATL as Pensacola, Mobile and Gulfport are the choices all generally having to connect through some major hub. Have heard no one complain about this. The real gem of Fairhope are the people. We have found nothing but abject graciousness and responsiveness from those engaged we have engaged with from the town government, store owners, vendors and others. a HUGE breath of fresh air from that experienced in larger cities, ATL included. ATL was listed recently at one of the top 50 worst cities to live in. It is true that Fairhopians want no more publicity but that cat is out of the bag. There currently a building moratorium in place pending the completion and presentation of a growth, funding and infrastructure plan for the path forward. In sum, we moved in the day of Tropical Storm Cindy 6 weeks ago. We lived in ATL for 30 years. We researched and visited the area at all times for 5+ years. Have not had a second thought or looked back. But, by all means, check it out yourself. Use your own intuition and research. By doing that, we had no need to rent first. Decide what fits for you and move on! Best of luck! There is more but this is already long enough.

    by JeffH — August 1, 2017

  12. Sperlings best places to live cites the cost of living in Fairhope AL as 109% of the national average.

    by Jeff L. — August 2, 2017

  13. JeffL: That is one organization’s overall number. We ignored it and most others like it as being generalizations albeit there are many areas that we did not and would not consider given lifestyle and location having both higher and lower CoL indices. Our specific CoL here is lower than where we lived in ATL. Everyone should do an individual (or family) income/expense/investment/tax analysis unless they are in a position where those factors are of a concern. Prior to fully retiring earlier this year at 67, at 66 we prepared (and maintain) a comprehensive 20 year XL financial forecast to age 86 (and have been measuring it against actual to insure relevance and accuracy). So far, that effort has been true to form and now serves as the guideline for off budget item decisions like vacations, home repair, etc. It will provide the baseline for revisions as they are necessitated and for more significant events should they occur through the aging up process.

    by JeffH — August 3, 2017

  14. Areavibes gives the cost of living in Fairhope AL at 108%. Housing at 126% is the biggest factor, utilities are 112%, groceries at 100%. Hopefully, other factors more than compensate, It’s up to the individual to evaluate those factors in whatever way they want and/or according to their needs and limitations.

    by Jeff L. — August 4, 2017

  15. Would someone share a comparison of Fairhope, AL & Jacksonville, Go & the Carolina’s?

    by Patricia Jordon — August 5, 2017

  16. Much thanks Jeff, for the very useful information. Surprised and happy to hear your COL is overall lower than Atlanta.

    Yes, on my first visit to Fairhope , I was very much impressed by the friendliness of the people of Fairhope. It indeed seemed like a real community.

    Wanted to ask: How do you find medical services in the Fairhope area?

    I need to get down there soon, myself……… to hear of your experiences.


    by Roberta Bengtson — August 5, 2017

  17. Hi Roberta…..good question. We wondered that in moving and starting over as well.

    In 2 words: trusted referrals. The owner of a State Farm business here ( we are longtime State Farm clients) just happens to be on one of the local hospital boards and his wife is a surgeon. We started there. His assistant offered an ObGyn for my wife (who went there Friday and was very pleased) and a hair doctor (i.e the all important hair dresser who she was pleased with as well). My wife has seen the eye doctor and I am seeing them on Friday. I’ve seen both the dentist and dermatologist. We are going thru the process of moving records to the recommended internist and orthopedic specialist.

    A couple of referrals had to be changed to another in the same office practice….one wasn’t taking new patients, the other is sadly out for a while battling a brain tumor. It has been easy to get appointments with one exception being the internist who, with his two colleagues, are highly sought after. We are waiting on records review but have other names to approach if not.

    One of our investment advisors at Merrill Lynch grew up here and wrote to his attorney friend here about our re-lo. That fellow sent us a long intro letter to various contacts…car mechanic, tax attorney, etc. and the latter gave us a referral to another attorney who reviews wills and has reviewed ours for AL compliance and the PoA documents as well.

    You can go to Facebook and find Fairhope Times and follow council meetings, and other goings on. We joined the 654 member Baldwin County Travelers Group, $32 per year for the two of us and are looking at their huge slate of domestic and international trips. We have joined the Eastern Shore Camera Club on a neighbor referral and I am submitting framed photos to a showing in early September at the Arts Center as well as themed photos to regular meetings.

    Food….well, everyone has recommendations!!!! And we were led to a wonderful vet (best we’ve had) who referred a top groomer who wasn’t taking new clients but took the referral. We’ve found a wonderful, welcoming church and are going back today for the third visit. Same with a bike shop and fruit and vegetables stand……both of which we have frequented. We needed two lamps fixed, used the internet, found and used one as they are hard to come by. In talking with him after getting our lamps done, he led us to a contact in the contractor business who we had here yesterday reviewing a list of our project needs. It doesn’t hurt that he pitched in the Red Sox system years ago and they are our favorite team and I am a youth baseball instructor.

    So, more than you asked, but you get the idea. Be well. Let us know when you get here.


    by JeffH — August 6, 2017

  18. You can make comparisons between any two or more place on Sperlings Best Places.

    by Jeff L. — August 6, 2017

  19. Hi Patricia
    The link below is to a blog comparing North and South Carolina. Information on your other locations can be found by using the search bar and Retirement Ranger.
    Happy Hunting!!…/dueling-carolinas-north-carolina-vs-south- carolina-as-the-best-retirement-state.html/

    by Moderator Flo — August 6, 2017

  20. I like AreaVibes. AreaVibes gives you a total numerical livability score. They also provide a letter grade score for seven sub areas such as crime, housing, weather, etc. When you click on the grade for the sub area you get more detailed information. You also can compare location against location for the total livability number and the sub areas with letter grade against letter grade. The livability number compares the location against the state livability number and against the United States livability number.

    by Bubbajog — August 6, 2017

  21. AreaVibes is great. I suggest for anyone using it to put their current hometown in first for the livability number. Then you can compare what you have now with future locations. Another one I like is You can get the average heating and cooling costs for each city and rating by State. Sperling’s best places is more accurate on climate and comfort I believe but not so good on the grocery index.

    by William DeyErmand — August 7, 2017

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