The short version
- Social Security taxed?
- No
- Income tax
- Flat 4.95%
- Property tax on a $300,000 home
- ≈ $5,640 / yr ($470 / mo)
- Everyday cost index (U.S. = 100)
- 95
- January / July high
- 32°F / 84°F
- Sales tax (state + local avg)
- 8.98%
Retiring in Illinois
Retirement income is completely tax-free here — pensions, 401(k)s, IRAs, all of it. Watch out: the highest property taxes in the country cancel much of that out.
How Illinois taxes your retirement income
Social Security: not taxed at all.
Pensions: All pension income exempt.
401(k) and IRA withdrawals: 401(k)/IRA withdrawals fully exempt.
The setup: Flat 4.95%.
Property tax & senior breaks
The average effective property tax rate is about 1.88% — roughly $5,640 a year ($470 a month) on a $300,000 home. Your county sets the real number.
Help for seniors: Senior homestead exemption plus a senior assessment freeze for lower-income homeowners 65+.
Try your own home value in the Property Tax Estimator.
Everyday costs & sales tax
Overall cost of living runs about 5% below the U.S. average. The combined state and average local sales tax is 8.98%.
Weather
January days top out around 32°F and July days around 84°F, with roughly 189 sunny days a year. Watch out for: Bitter winters, tornadoes, and humid summers.
Healthcare
World-class Chicago medicine; downstate access varies.
Estate & inheritance taxes
Illinois has an estate tax. Estate tax above a $4 million exemption