Retiring in Kentucky: a complete guide
This article will take you through the main things you need to consider if you are retiring in Kentucky.
Summary
Kentucky has a large retirement community, with over 16% of the population over the age of 65.
Louisville, Lexington, and Bowling Green are some of the best locations to retire in Kentucky.
Kentucky enjoys a lower cost of living than other states in the US, meaning retirees in the state hold on to more of their money.
A financial advisor can help you get ready for retirement and develop a financial plan to reach your goals.
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, cultural events, and a low cost of living.
According to data from the U.S. Census Bureau in 2020, Kentucky had a population of approximately 4.4 million people, with over 16% of the population over the age of 65.
With its beautiful countryside, horse farms, and southern hospitality, Kentucky offers a unique retirement experience that attracts many retirees every year.
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If you plan on retiring to Kentucky, it's worth speaking to a qualified financial advisor to find the best city for your budget.
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Where are the best places to retire in Kentucky?
If Kentucky is your chosen retirement state, here are some of the best places to retire:
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 vibrant cultural scene, 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 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 to 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 puts people off retiring to 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 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.
What age can you retire in Kentucky?
Like many states, Kentucky has no specific retirement age that is mandated by law.
This means that 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.
How much is retirement tax in Kentucky?
Kentucky is generally a tax-friendly state for retirees.
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.
The bottom line
Retiring to Kentucky offers many advantages, 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.
Content writer
Kate has written for leading publications and blue chip companies over the last 20 years.