Kentucky Retirement Guide

Kentucky is a state with many great retirement towns, including several that have been certified as retirement communities. Kentucky offers very good value for your retirement dollar - real estate and the cost of living is lmuch lower than most other states. Yet the recreational activities are exceptional in this beautiful state with ready access to the Appalachians. Just over 4.4 million called Kentucky home in 2015, and the median age was 38.3. This site will some basic facts about retirement to the best places in Kentucky. Updated Feb. 2020.

The Kentucky climate is characterized as humid sub-tropical. Summers are hot and humid and winters are milder than in states further to the south. In mountainous areas the climate is quite cooler than in lower areas.

Economy & Housing Prices
In 2010-14 the KY median household income was $43,432, which put it in the lowest third of all states. This statistic reflects Kentucky's low cost of living, ranked 9th lowest by MERIC. Zillow reports the 2018 median home value for Kentucky was $149,987. The NAR reported 4th Quarter 2019 median sales price in Louisville to be $191,800 up 6.5% vs. the previous year.


Tax Burden: At 9.5% Kentucky is in the middle of the pack as far as tax burden goes - 24th out of 50 states - according to (2012). In April 2018 the legislature passed a tax reform bill which will help improve the state's budget but negatively impact some retirees.

Marginal Income Tax Rates. The state now has a flat 5% income tax rate, previously there were several brackets.

Retirement Income Exemptions.  Social security is not taxed but the non-taxable portion of qualified money has been reduced to $31, 110 from $41,110 per person.

Social security exemption. Social security benefits are exempt.

Sales Tax: Sales tax is 6%.

Property Taxes: Kentucky is the 8th lowest state in median property taxes paid (  Annual per capita property tax paid is $843.  People over 65 can get a homestead exemption on $34,000 worth of assessed value.

Estate and/or Inheritance Taxes. Kentucky has an inheritance tax, but spouses, parents, children, grandchildren and siblings are all exempt.

Link Arkansas.

Certified Retirement Communities
Kentucky used to have a list of 8 certified retirement communities chosen in its certified retirement communities program, but the program appears to be discontinued. The eight included: Glasgow, Danville, Campbellsville, Madison, Maysville, Murray, Morehead, and Richmond.

Best retirement communities
Some cities and towns in Kentucky are extremely popular as retirement communities. Some are located near very large man-made lakes, while others are identified as college towns.

- Berea - One of the fastest growing towns in America, Berea 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, Paris offers low-cost living, a great climate, and unlimited recreation. Murray State University, a top institution, makes this a delightful college town.

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