We've considered Chattanooga for the same reasons mentioned already. What makes me pause is the traffic on I-24 and I-75. It's just horrible and it seems that every single time we go in our out on I-24 (the ridge cut and for about 20 miles west of that), there is an accident backing up traffic for hours. Since that and I-75 would be the main in/out road for us, we have moved Chatt farther down our list.
McKays | Tennessee & North Carolina | McKay Used Books & CDs They have 'sister locations' in Nashville and Knoxville, too. The Nashville location is just as impressive and a friend said the Knoxville location (their original location, I think) is even bigger.
Rock City is awesome.
Definitely look at some of the other places mentioned in the area, too, and take into consideration each state's taxes for retirees. Even with a state income tax, you might one that works for you if your income falls under the exempt categories.