What should you know about retiring in Kentucky?


Quick Answer

One feature that makes Kentucky an appealing place to retire is the low cost of living, explains TopRetirements.com. Other considerations include the state's warm summers and relatively mild winters, favorable tax policies for retirees and an eclectic mix of activities.

Continue Reading

Full Answer

Kentucky has the eighth-lowest cost of living in the United States as of 2013, according to TopRetirements.com. The median house value was $120,400 compared to the average U.S. median house price of $176,000. The typical low temperature in Kentucky is 33 degrees Fahrenheit in January, with an average high of 76 degrees Fahrenheit in July.

Kentucky doesn't tax social security income and exempts the state tax of pension income up to a certain point, states Wolters Kluwer. Social security benefits are subtracted from the federal adjusted gross income. Retirement income from a pension plan, profit-sharing plan, employee savings plan or retirement plan is exempt from taxes up to $41,110.

Kentucky had the 23rd-highest tax burden in the country in 2011 with a median property tax of $843 annually, states TopRetirements.com. Kentucky residents also have access to Homestead Programs to help with tax payments. With a 2 to 6 percent income tax rate, Kentucky has a fairly low rate compared to other states. Sales tax is at 6 percent, and children, grandchildren, parents and spouses are exempt from the inheritance tax.

Learn more about Financial Planning

Related Questions