Retirement planning in Knoxville, TVA pensions included.
Robert Boeck plans retirement income for Knoxville households by Zoom from Chattanooga: Social Security, withdrawals, Roth conversions and Tennessee’s taxes, in one plan. TVA, headquartered here, adds pension and retiree medical rules of its own for its employees.
What does it cost to retire in Knoxville?
Sales tax and property tax are the costs that come with a Knoxville address. Purchases carry 9.25%, the state’s 7% plus Knox County’s 2.25%, and groceries 6.25%. Inside the city, the combined 2025 property tax rate was $3.7096 per $100 of assessed value, and the tax falls on 25% of a home’s appraised value: a home appraised at $240,000, near the city’s median of $239,700, pays about $2,230 a year.
Knox County freezes its share for homeowners 65 or older who apply, under a 2026 income limit of $63,470, at the amount for the year they first qualify. The City of Knoxville has not adopted the freeze, so its share can still rise.
In Knox County, 76,490 people drew Social Security retirement benefits in December 2025, an average of about $2,180 a month (Social Security Administration county totals, our arithmetic). In the Census Bureau’s survey for 2020 to 2024, 14.4% of Knoxville’s residents were 65 or older.
A check of $2,180 covers about $26,200 of a year’s spending, and savings supply the rest. The plan sets when each of you claims Social Security, the order you draw your accounts, Roth conversions in the years before required distributions, and income kept under the Medicare surcharge thresholds.
What does a TVA employee decide before retiring?
Before you leave TVA, you choose how your pension pays you and check that you qualify to keep TVA medical coverage. The TVA Retirement System (TVARS) runs the pension. Which benefit you have depends on when you were hired and on choices TVA has offered since: the Original Benefit Structure, a cash balance account, or a separate structure for anyone hired on or after July 1, 2014. The 401(k) plan sits alongside each of them.
At retirement, TVARS has separate applications for monthly benefits that start right away, for benefits deferred to a later date, and for a lump sum or a rollover to an IRA. The one you file decides how much of your income the pension covers for life, and how much falls to the 401(k) and Social Security. It belongs in the same plan as your claiming age and your Roth conversions. The answer on taking a pension as a lump sum works through TVA’s own conversion example.
Retiree medical coverage has rules of its own. To keep it, you need TVA medical coverage on your last day of work and one of several qualifying routes, among them age 55 with 10 years of TVA service if you were hired on or after January 1, 2005, or age 60 with no service requirement. Retire before you qualify and you arrange your own coverage until Medicare at 65.
What about TCRS and Tennessee taxes?
Teachers and state and higher-education employees are covered by TCRS, the state’s pension system. The Nashville page covers its two plans and the choices it asks for at retirement.
Tennessee has no state income tax on wages or retirement income, so a TVA pension, a TCRS pension and 401(k) withdrawals carry federal tax only. The Chattanooga page covers what that changes, and what a move into the state does not settle.
Chattanooga, Nashville, Franklin, Memphis, Tullahoma and Crossville
Pages for the other Tennessee areas cover what is specific there: Chattanooga, where Robert is based, for the state’s tax rules; Nashville, for TCRS, the state’s pension; Franklin and Brentwood, for executive pay at the headquarters there; Memphis, Germantown and Collierville, for FedEx’s pension and executive pay; Tullahoma and Manchester, for federal pensions around Arnold Air Force Base; and Crossville and Fairfield Glade, for drawing an income in retirement.
Questions from Knoxville
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