How affordable is retirement in KY? Study says state has 2 big things going for it

Thinking of moving away from Kentucky once you retire? You might want to rethink that plan.

According to one ranking, Kentucky is the seventh most affordable U.S. state to retire in, ranking below Missouri and just above Ohio.

The ranking was compiled by the retirement research journal Retirement Living and compared every state on various factors like median monthly rent, median home sale price, Medicare, Social Security tax and other expenses, like groceries. It was released April 9. The journal got its data from a variety of sources, including the U.S. Census Bureau, the U.S. Data of Labor Statistics, Tax Foundation, AAA and the Centers for Medicare and Medicaid Services.

Here’s how Kentucky’s numbers add up for retirees, according to Retirement Living:

• Median monthly rent: $773
• Median home sale price: $264,000
• Groceries cost per week: $232.95
• Average gas price per gallon: $2.68
• Medicare Advantage plan: $15.15
• State income tax: 4%
• Property tax: 0.77%

The state’s lack of Social Security income tax helped it receive a high ranking in the affordability report.

“Kentucky earned its ranking as the seventh-most affordable state for retirees through inexpensive housing and a tax-friendly environment,” the report reads.

For Kentucky retirees who may work part-time, the state’s income tax on those wages is also dropping. For several years, legislators have pursued a plan to cut the commonwealth’s income tax year by year until it reaches 0%.

Arkansas got the top spot from Retirement Living for the most affordable state for retirees, with a median monthly rent of $722 and Medicare Advantage plan of $7.74. Arkansas also doesn’t have a Social Security income tax.

In addition to the affordable retirement top-spot ranking, Kentucky ranked 25th for its cost of living in the analysis.

“While the average per gallon cost of gas is the third-lowest in the country ... expensive groceries largely offset this benefit,” the ranking reads.

Another analysis disagrees, however.

In a ranking released in January, finance site WalletHub named Kentucky the worst state in which to retire due to low marks for quality of life and health care. For affordability, WalletHub ranked the state 36th. Arkansas, Retirement Living’s winner for most affordable state, was ranked 42nd in the WalletHub study.

It’s not the first year Wallethub has ranked Kentucky low for retirees, either, and the site has named life expectancy a top issue.

The 10 most affordable states to retire, according to Retirement Living

Here are the 10 most affordable U.S. states to retire in, from Retirement Living:

1. Arkansas
2. Mississippi
3. Alabama
4. Indiana
5. Iowa
6. Missouri
7. Kentucky
8. Ohio
9. Tennessee
10. Oklahoma

The five least affordable states to retire in are Washington, New Jersey, New York, Hawaii and California, the ranking found.

Do you have a question about Lexington or Kentucky for our service journalism team? We’d like to hear from you. Fill out our Know Your Kentucky form or email ask@herald-leader.com.

This story was originally published April 17, 2025 at 5:00 AM.

Lindsay Smith

The Wichita Eagle

Lindsay Smith is a suburban news reporter for the Wichita Eagle, covering the communities of Andover, Bel Aire, Derby, Haysville and Kechi. She has been on The Eagle staff since 2022 and was the service journalism reporter for three years. She has a degree in communications with an emphasis in journalism from Wichita State, where she was editor-in-chief of the student newspaper, The Sunflower, for two years. You can reach her via email at lsmith@wichitaeagle.com.