Retiring in Kentucky: a complete guide

Is Kentucky a good place to retire?

Kentucky is a growing retirement destination for many Americans seeking a serene environment with access to outdoor activities, events, and a low cost of living.

According to data from the U.S. Census Bureau in 2024, Kentucky had a population of approximately 4.6 million people, with almost 18% of the population over the age of 65.

With its beautiful countryside and southern hospitality, Kentucky offers a unique retirement experience that attracts many retirees every year.

At what age can you retire in Kentucky?

You can retire in Kentucky whenever you can afford it. 

In other words, individuals are free to retire whenever they choose as long as they are able to support themselves financially.

However, there are some age-related benefits and considerations for retirees in Kentucky: 

• Social Security benefits: The earliest age at which you can begin receiving Social Security benefits is 62, but if you delay taking benefits, your monthly payments will increase. Full retirement age (FRA) is between 66 and 67, depending on your birth year. Delaying benefits until after FRA can result in even higher monthly payments. 

• Medicare eligibility: Medicare eligibility begins at age 65, regardless of retirement status. However, if you choose to retire before age 65, you will need to find alternative healthcare coverage until you become eligible for Medicare. 

• Age discrimination: It is illegal for employers to discriminate against employees or job applicants based on age. 

• Retirement savings: Regardless of retirement age, it is important for individuals to start saving for retirement as early as possible. Many financial experts recommend saving at least 15% of your income for retirement. 

Where are some of the best places to retire in Kentucky?

If you’ve decided to retire in Kentucky, here are some of the top potential destinations:

• Louisville: As the largest city in Kentucky, Louisville offers a mix of urban and suburban living with a low cost of living. It has a lot, including museums, galleries, and performing arts venues, and is home to Churchill Downs, the famous racetrack that hosts the Kentucky Derby. 

• Lexington: Lexington is a charming city with a rich history, beautiful parks, and a thriving arts scene. It is home to the University of Kentucky and offers easy access to outdoor activities, including horseback riding and hiking in the nearby Bluegrass Region. 

• Bowling Green: Located in south-central Kentucky, Bowling Green is a small city that is home to Western Kentucky University and offers a low cost of living, a mild climate, and access to outdoor recreation opportunities. 

• Bardstown: Located in the heart of the Kentucky Bourbon Trail, Bardstown is a small town with a rich history and a charming downtown area. It has a low cost of living and is known for its bourbon distilleries and annual Bourbon Festival. 

• Paducah: Located in western Kentucky, Paducah is a riverfront city with a rich cultural heritage and a thriving arts scene. It has a low cost of living and is known for its historic downtown area, which is home to numerous art galleries and studios. 

What are the pros and cons of retiring in Kentucky?

Before you pack up and move to the state, you need to work out if Kentucky is really the best place for you. 

To help you get started, here are some of the pros and cons you should consider before moving to the Bluegrass State.

Why do people retire in Kentucky?

Here are some of the top reasons that people retire in Kentucky:

• Low cost of living: Kentucky's cost of living is generally lower than the national average, which could be a significant advantage for retirees on a fixed income. Housing, healthcare, and transportation costs are lower than in many other states. 

• Outdoor activities: Kentucky is known for its beautiful countryside, horse farms, and outdoor activities such as hiking, fishing, and boating. The state is home to numerous state parks and national forests, providing ample opportunities for retirees to stay active and enjoy nature. 

• Culture and history: Kentucky has a rich cultural and historical heritage, with numerous museums, galleries, and historical sites. The state is also known for its bourbon distilleries, horse racing, and bluegrass music. 

• Southern hospitality: Kentucky is known for its friendly people and southern hospitality, providing a welcoming environment for retirees. 

What are some drawbacks to retiring in Kentucky?

Here are some potential disadvantages to retiring in Kentucky:

• Limited healthcare options: Some parts of Kentucky may have limited healthcare options, especially in rural areas. Retirees may need to travel to larger cities, or perhaps out of state, for specialized medical care. 

• Extreme weather: Kentucky experiences all four seasons, with hot summers and cold winters. The state is also prone to severe weather, such as thunderstorms, tornadoes, and snowstorms, which could be a concern for retirees living in certain areas. 

• Limited transportation options: Kentucky may have limited public transportation options, especially in rural areas. Retirees may need to rely on personal vehicles or private transportation services. 

Does Kentucky tax retirement income?

Kentucky is generally a tax-friendly state for retirees, as Social Security income is exempt from taxation. 

Other forms of retirement income, such as pensions, 401(k), or IRA, are exempt up to a limit of $31,110 per person. Anything above this limit will be taxed at the state’s standard 4% rate.

Get expert retirement advice

Kentucky has advantages for retirees, such as a low cost of living, access to outdoor activities, a rich cultural heritage, and southern hospitality. However, retirees may need to consider factors such as limited healthcare options, extreme weather, and limited transportation options.

It's important to seek expert financial advice to weigh up all of the costs associated with retiring in Kentucky, including property taxes, insurance, and living expenses, in order to make an informed decision about whether the state is the right choice for your retirement. 

Match with a financial advisor now.