Retirement planning in Tullahoma and Manchester, federal pensions included.
Households in Tullahoma and Manchester can plan Social Security, withdrawals and taxes with Robert Boeck by Zoom from Chattanooga. For a federal employee at Arnold Air Force Base, the FERS retirement date comes first: a year either way changes the pension for life.
What does it cost to retire in Tullahoma and Manchester?
Coffee County, Manchester and the Coffee County side of Tullahoma add 2.75% to the state’s 7% sales tax, for 9.75%, and 6.75% on groceries; the Franklin County side of Tullahoma adds 2.25%.
Tullahoma’s combined 2025 property tax rate was $4.2090 per $100 of assessed value on the Coffee County side and $3.8717 on the Franklin County side; Manchester’s was $3.6299. The rate applies to 25% of a home’s appraised value, so a home appraised at $252,000, near Tullahoma’s median of $251,900, pays about $2,650 a year on the Coffee County side.
Coffee County, Tullahoma and Manchester have all adopted the property tax freeze for homeowners 65 or older, under a 2026 income limit of $46,730, and Franklin County has too, at $47,050.
In Coffee County, 10,780 people drew Social Security retirement benefits in December 2025, and their checks averaged about $1,994 a month (Social Security Administration county totals, our arithmetic). Tullahoma is the older of the two towns: 19.1% of its residents were 65 or older in the Census Bureau’s survey for 2020 to 2024, against 16.7% in Manchester.
Without a federal pension, the plan starts from Social Security. An average check here covers about $23,900 a year, and the plan works out when each spouse claims, which accounts to draw from and Roth conversions while income is low, with the Medicare surcharge thresholds in view.
What does a federal employee at Arnold decide before retiring?
You decide your retirement date first, then how to draw the TSP and what your spouse receives after you. Arnold Air Force Base sits in Coffee and Franklin counties, between Manchester, Tullahoma and Winchester, and its workforce includes Air Force civilian employees as well as contractors. A civilian employee under FERS, the Federal Employees Retirement System, earns a pension set by a fixed formula: 1% of your high-3, the highest average basic pay over any three consecutive years, for each year of service. Retire at 62 or later with at least 20 years and the rate is 1.1%.
That difference is worth working out before you pick a date. For example, with a $110,000 high-3, retiring at 62 with 25 years of service pays $30,250 a year; retiring a year earlier, at 61 with 24 years, pays $26,400.
Your earliest date depends on your minimum retirement age, 57 if you were born in 1970 or later. You can go at that age with 30 years of service, at 60 with 20, or at 62 with 5. Leave at your minimum retirement age with 10 years and the pension is cut by 5% for each year you are under 62 when it starts; with 20 years, starting it at 60 or later avoids the cut.
What pays the bills before 62?
Retire before 62 with 30 years at your minimum retirement age, or at 60 with 20, and FERS adds an annuity supplement: an estimate of the Social Security benefit your federal service earned, paid until 62. Work after you retire and it shrinks, by $1 for every $2 you earned the year before above Social Security’s annual limit, $24,480 in 2026. FERS cost-of-living raises also wait until 62.
The Thrift Savings Plan fills the rest. Leave federal service in or after the year you turn 55 and TSP withdrawals escape the 10% early withdrawal penalty, though the traditional balance is still taxed as income. How much you draw each year before 62, and when you claim Social Security, decide how much of the TSP is left for the decades after.
What does the survivor election cost?
At retirement you choose what your spouse receives after your death. A full survivor annuity pays your spouse 50% of your unreduced pension and costs you 10% of yours; a partial one pays 25% and costs 5%. Electing less than the full benefit takes your spouse’s written consent, and without any survivor annuity your spouse cannot keep Federal Employees Health Benefits coverage after you die.
Health coverage into retirement has its own five-year rule: you need FEHB coverage for the five years of service right before your pension starts, or since your first chance to enroll if that is shorter. Check it before you set a date.
What about teachers and Tennessee taxes?
Public school teachers are covered by TCRS, the state’s pension system, not by FERS. 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 FERS pension, the supplement and TSP withdrawals carry federal tax only. The Chattanooga page covers what that changes, and what a move into the state does not settle.
Chattanooga, Knoxville, Nashville, Franklin, Memphis and Crossville
Pages for the other Tennessee areas cover what is specific there: Chattanooga, where Robert is based, for the state’s tax rules; Knoxville, for TVA’s pension; 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; and Crossville and Fairfield Glade, for drawing an income in retirement.
Questions from Tullahoma and Manchester
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