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Cost of Retiring in Kentucky (KY) 2026

Kentucky has a low 3.5% flat rate, does not tax Social Security, and partially exempts pension/retirement income.

3.5%
Top Income Tax Rate
90.2
Cost of Living Index (Below average)
No
Taxes Social Security
$1,260
Est. State Tax on $60K Income

Tax on $60,000 Retirement Income

Gross annual income$60,000
Top state income tax rate3.5%
Estimated effective rate2.1%
Estimated annual state tax$1,260
Monthly tax impact$105
After-tax income$58,740

5 Cheapest Alternative States

StateRateEst. Tax on $60K
AlaskaNo tax$0
FloridaNo tax$0
NevadaNo tax$0
New HampshireNo tax$0
South DakotaNo tax$0

Moving from Kentucky to Alaska could save ~$1,260/year in state income tax alone.

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Source: IRS Rev. Proc. 2025-32, BEA Regional Price Parities (2024 vintage), SSA 2026 bend points. Tax estimates use a 60% effective factor on the top marginal rate as a simplified model. Consult a tax professional for your specific situation. Not financial advice.

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