The short version
- Social Security taxed?
- No
- Income tax
- Flat 4.25%
- Property tax on a $300,000 home
- ≈ $3,570 / yr ($298 / mo)
- Everyday cost index (U.S. = 100)
- 90
- January / July high
- 32°F / 84°F
- Sales tax (state + local avg)
- 6.00%
Retiring in Michigan
Affordable homes, Great Lakes summers, and most retirement income is exempt again. Watch out: high property taxes and long, gray winters.
How Michigan taxes your retirement income
Social Security: not taxed at all.
Pensions: Pension income largely exempt under the restored retirement deduction (fully phased in for 2026).
401(k) and IRA withdrawals: Deduction of $20,000 single / $40,000 joint for retirement income for those 67+.
The setup: Flat 4.25%.
Property tax & senior breaks
The average effective property tax rate is about 1.19% — roughly $3,570 a year ($298 a month) on a $300,000 home. Your county sets the real number.
Help for seniors: Homestead property tax credit for lower-income homeowners.
Try your own home value in the Property Tax Estimator.
Everyday costs & sales tax
Overall cost of living runs about 10% below the U.S. average. The combined state and average local sales tax is 6.00%.
Weather
January days top out around 32°F and July days around 84°F, with roughly 180 sunny days a year. Watch out for: Lake-effect snow and long gray winters.
Healthcare
Strong care in metro Detroit and Ann Arbor (Michigan Medicine); the Upper Peninsula is sparse.