The tax picture
No state income tax, no estate or inheritance tax, low property taxes. The offset is a high sales tax that includes groceries.
Retiring here
Retiring to Northeast Tennessee
Every year, more retirees land in Northeast Tennessee from California, New York, and other high-tax states. Some come for the taxes. Most stay for the mountains, the lakes, the four real seasons, and a cost of living that lets retirement savings breathe. Here's the honest picture: the taxes, the towns, and the tradeoffs.
Fit
Who this page is for
Households in high-tax states who are seriously considering Northeast Tennessee for retirement and want the real picture before and after the move.
Best-fit situations
- You are within a few years of retirement and the move is a live question.
- Meaningful savings sit in IRAs, 401(k)s, or a pending home sale.
- You want the move and the money plan sequenced together.
- You want honest tradeoffs, not a relocation brochure.
Talley Wealth is based in Johnson City and helps arriving retirees land well: residency, taxes, accounts, and income.
The picture
What the move actually changes.
Tennessee has no state income tax. Not on Social Security, not on IRA or 401(k) withdrawals, not on pensions, not on interest or dividends. There is no state estate or inheritance tax either. Property taxes on a home here run among the lowest in the country, roughly half the national average in much of the region. If you're coming from California, where retirement account withdrawals are taxed at rates up to 13.3%, the difference shows up in the first year.
The honest tradeoffs: sales tax here is among the highest in the country, close to 9.75% locally, and it applies to groceries. And the timing of your move matters more than most people realize. A Roth conversion done as a Tennessee resident has no state tax on it at all; the same conversion done the year before you leave a high-tax state gets taxed on the way out. Sequencing the move and the money together is where planning earns its keep.
A local firm for people becoming locals
Talley Wealth is based in Johnson City. David grew up here in the Tri-Cities, and a growing number of our clients came from somewhere else and picked this place on purpose. We help with the money side of landing well: residency, account moves, taxes, and turning savings into a retirement paycheck.
Read public reviewsThe towns
Johnson City, Kingsport, and Bristol each have their own pace and price point, all within a short drive of mountains, lakes, and a regional airport.
The timing
Move first or convert first? Sell first or move first? The order of operations can be worth more than the move itself.
Decision depth
The move and the money should be one plan.
Where arriving retirees gain or lose the most.
01
Sequencing
Residency first, then conversions. Large Roth conversions done as a Tennessee resident carry no state tax.
02
The exit
Your old state taxes you until the move is real. Domicile, day counts, and the part-year return need to be handled cleanly.
03
The landing
New cost of living, new withdrawal plan, new healthcare setup. The first year sets the pattern.
What we coordinate
The useful details need to work together.
- What Tennessee does and does not tax, on your actual income mix
- Roth conversion windows that open once you are a Tennessee resident
- Making residency real: domicile, timing, and the year-of-move returns
- Whether your old state can tax your retirement income after you leave (federal law says no, once the move is real)
- The Illinois wrinkle: retirement income is already state-exempt there, so the move math is about property taxes and everything else
- Turning the savings into income: withdrawal order, Social Security timing, and taxes decided together
Representative situation
A California couple trading 13.3% for zero
Situation
A couple in their early 60s is selling a California home and retiring with most of their savings in IRAs and a brokerage account. They want to know what actually changes if they land in Northeast Tennessee, and what to do in what order.
Approach
We would map the residency timeline, model their withdrawal plan with no state income tax, plan Roth conversion windows for after the move, coordinate the home-sale proceeds, and build the retirement paycheck around the new cost of living.
This representative situation is hypothetical and for educational purposes only. It is not based on, and should not be understood as referencing, any specific client or client experience.
Local proof
Where we are
Talley Wealth is based in Johnson City and works with families across the Tri-Cities, in person and virtually.
- Office: 203 Broyles Drive, Suite 301, Johnson City, TN 37601.
- Serving Johnson City, Kingsport, Bristol, and nearby communities.
- Reviews mentioned on this site are public Google reviews, not a promise of results.
Related next steps
Keep going from this decision.
Common questions
Questions worth sorting out before you decide.
Does Tennessee tax retirement income?
No. Tennessee has had no state income tax of any kind since 2021. Social Security, IRA and 401(k) withdrawals, pensions, interest, and dividends are all untaxed at the state level.
Can my old state keep taxing my 401(k) or pension after I move?
No. Federal law prohibits states from taxing the retirement income of former residents. The move has to be real, though: your old state can question your domicile, so licenses, registrations, and where you actually spend the year should match.
I'm in Illinois and my retirement income already isn't taxed. Does the move still make sense?
Honestly, the income-tax pitch is weaker for Illinois retirees, since Illinois already exempts retirement income. The Tennessee case from Illinois rests on property taxes, which are among the highest in the nation there and among the lowest here, plus cost of living. Run the numbers on your own situation.
What about New York?
New York doesn't tax Social Security and exempts the first $20,000 per person of pension and IRA income after age 59 and a half, plus government pensions entirely. The Tennessee difference is real for larger withdrawals, but smaller than the California version. Worth modeling, not assuming.
What is the catch?
Sales tax. Tennessee runs close to 9.75% locally and taxes groceries. For most retirees moving from a high-income-tax state the math still lands well ahead, but we count it honestly.
What should happen before the move?
The sequencing: when to sell, when to establish residency, and whether large Roth conversions should wait until you are a Tennessee resident so no state taxes them. Getting the order right can be worth real money.
Landing here? Start with one conversation.
The Explore Call is a short way to see whether the move timing and the money plan should be decided together.