Retirement Taxes in Tennessee (2026)
Tennessee levies no state income tax, so Social Security, 401(k) withdrawals and pension income are all untaxed at the state level. On our standard retiree profile it ranks 3 of 50 for total state tax burden at $5,896 a year, with property tax at an effective 0.43% and combined sales tax at 9.61%.
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Tennessee at a glance
State income tax
None
No state income tax on any retirement income
Social Security
Fully exempt
State treatment only; federal rules still apply
401(k) / IRA withdrawals
No state income tax
Pension income
No state income tax
Effective property tax
0.43%
$2,170 on a $500,000 home
Combined sales tax
9.61%
State plus average local rate
Homeowners insurance
$1,492/yr
Average annual HO-3 premium
Cost index (goods & services)
95.6
US average = 100, BEA 2024. Housing excluded.
Estate / inheritance tax
Neither
Cost index compares goods and services only — housing is excluded because it's captured separately in property tax. Source: BEA Regional Price Parities, 2024, US average = 100.
Rankings and dollar figures on this page use one documented profile: $126,000 of gross retirement income ($36,000 Social Security, $45,000 in 401(k)/IRA withdrawals, $18,000 pension, $12,000 dividends, $15,000 part-time earnings), a $650,000 home, and $32,000 of taxable annual spending. It is the same profile the calculator loads with, so you can reproduce every number here.
Where Tennessee ranks
Tennessee places 3 of 50 states by total state tax burden on the standard profile — $5,896 a year against a $10,910 50-state average, or 46% below the 50-state average.
- State income tax rateNone100% below the 50-state average
- Effective property tax rate0.43%52% below the 50-state average
- Combined sales tax rate9.61%44% above the 50-state average
- Homeowners insurance premium$1,492/yrin line with the 50-state average
- Cost of goods & services95.64% below the 50-state average
Comparisons are unweighted averages across the 50 states on our standard retiree profile, not population-weighted national figures.
How it compares to its peers
The states closest to Tennessee on total burden, using the same profile:
Wyoming
Rank 1 · $5,517/yr
$380 less than Tennessee
Nevada
Rank 2 · $5,601/yr
$295 less than Tennessee
Nevada retirement taxesDelaware
Rank 4 · $6,871/yr
$974 more than Tennessee
What this means for a move
On the standard profile, 52% of the $5,896 annual burden in Tennessee is sales tax — $3,075, against $2,821 of property tax and $0 of income tax. Because there is no income tax to vary, your result in Tennessee moves almost entirely with the home you buy and what you spend.
Every $100,000 of home value costs $434 a year in Tennessee property tax, so a $500,000 house carries roughly $2,170. Average homeowners insurance runs $1,492 a year, in line with the 50-state average. Goods and services price 4.4% below the US average (BEA 2024, housing excluded), which sits on top of the tax figure rather than inside it.
Tennessee retirement tax FAQ
Does Tennessee tax Social Security benefits?
No. Tennessee does not tax Social Security benefits at the state level. Federal taxation of benefits still applies based on your combined income.
How does Tennessee tax 401(k) withdrawals and pension income?
Tennessee has no state income tax, so 401(k) and IRA withdrawals and pension payments are not taxed by the state. Federal income tax still applies.
What is the property tax rate in Tennessee?
Tennessee's effective property tax rate is 0.43% of home value — 52% below the 50-state average. On a $500,000 home that is about $2,170 a year.
Where does Tennessee rank for retirement taxes?
Tennessee ranks 3 of 50 states, lowest total burden first, on our standard retiree profile: $5,896 a year in combined state income, property and sales tax, versus a $10,910 unweighted average across the 50 states.
Compare Tennessee to your current state
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