Should I retire in Illinois?
- Charlie Horonzy
- Sep 3
- 3 min read
As a CPA and financial advisor in Chicagoland, one of the questions I hear quite often is: “Is it a good idea to retire in Illinois?” In this blog we’ll cover the three major reasons it might make sense.
But first – hello! I’m Charlie.
I help people retire in Chicagoland and across the country in a tax-efficient way. You may want to earmark these other blogs about financial planning for people in Illinois and other places in the United States.
Let’s get into it!
#1 Favorable Illinois taxes for retirees
There may be tax advantages to retiring in Illinois, depending on your personal situation. Any distribution from an IRA, 401(k) or other type of qualified retirement plan is not taxed in the state of Illinois. Social Security benefits are not taxed in Illinois, and neither are many forms of pension income. Income taxes in Illinois are a flat rate of 4.95%. This is a potentially favorable if you earn high income; the tax would be capped as opposed to increasing as it would in an tiered system.
However (and that has a capital “h” for a reason), this is all theoretical until you apply it to your life experience. The tax benefits can vary quite a bit from one person to the next. Depending on where you live, property taxes can be very high. There are other Illinois taxes to be aware of. To read more about the tax implications of living in Illinois, specifically in Chicagoland, read our blog on the financial aspects of living in Chicago.
We also recommend that you speak with your CPA or financial advisor for guidance about your personal situation. We are CPAs, but nothing in this blog may be interpreted as tax advice specific to any one individual. For financial or tax guidance that apply to your personal situation, we suggest that you consult with a professional.
#2 Access to affordable housing
While housing costs can be highly variable form one place in the state to another, there is ample opportunity to find affordable housing in the state of Illinois. According to Zillow, the median price of a home in Illinois is $286,669, which is lower than the national average home price of $368, 581.
While housing may be affordable in terms of prices – like we said before - property taxes can be a zinger. Those will be an ongoing component of your housing cost, should you choose to own property in the state. Choose wisely where you retire in Illinois.
#3 Cultural amenities
Illinois is a great place for senior citizens due to its lively and rich culture. There are beautiful parks and lakes throughout the state. But that’s not all. Chicago offers several forms of entertainment and cultural attractions, and there is the Illinois State Fair as well.
It may seem like an intangible thing, but mental peace of mind matters, especially in retirement!
Have you run the numbers?
As you can see, there are many dimensions to the question of whether or not it is a good idea to retire in Illinois. It’s best to run the numbers and get a clear financial plan to guide you in this important decision.
My name is Charlie and I help people retire in a way that minimizes what they pay to Uncle Sam, whether they are retiring in Illinois or elsewhere. I am a CPA and a financial planner. If you’d like to set up a time to talk about tax-efficient retirement planning for people in Illinois or elsewhere, please schedule a time.
Sources
Zillow. Illinois Housing Market. Accessed on August 27th, 2025. https://www.zillow.com/home-values/21/il/
Zillow. United States Housing Market. Accessed on August 27th, 2025. https://www.zillow.com/home-values/102001/united-states/
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