Low costs and a falling flat income tax. Watch out: county income taxes surprise newcomers, and winters are long and gray.
The short version
Social Security: not taxed at all.
Pensions: Pensions taxed as regular income; military pensions exempt.
401(k) and IRA withdrawals: 401(k)/IRA withdrawals taxed; most counties add their own income tax.
The setup: Flat 2.95% state rate in 2026, plus county income tax.
The average effective property tax rate is about 0.76% — roughly $2,280 a year ($190 a month) on a $300,000 home. Your county sets the real number.
Help for seniors: Extra homestead deduction for homeowners 65+ with modest income.
Try your own home value in the Property Tax Estimator.
Overall cost of living runs about 9% below the U.S. average. The combined state and average local sales tax is 7.00%.
January days top out around 36°F and July days around 85°F, with roughly 186 sunny days a year. Watch out for: Tornadoes and cold, gray winters.
Strong Indianapolis hospital systems; rural hospital closures are a concern.