Retiring Outside of Illinois
After a long Illinois winter, it’s natural to start imagining life somewhere warmer. Many of our clients have already retired out of state, and others are thinking about whether a change of scenery could make sense for their own retirement. You probably know someone who has made that move, and maybe you’ve wondered what it might look like for you. Weather may spark the conversation, but it’s rarely the whole story. Rising expenses, higher taxes, and the general cost of living in Illinois often prompt people to explore other options. When someone brings up the idea of relocating, the discussion becomes much bigger than geography. It’s about lifestyle, family, community, and what they want the next chapter to feel like. Finances are only one part of that decision, but understanding how a move might impact a retirement plan can provide the clarity people need to make an informed choice. Here are several key factors to consider when evaluating whether relocating can support your retirement goals. MOVING COSTS A long-distance move can easily cost $10,000 or more. These expenses reduce retirement savings and the growth those dollars could have earned. It’s important to account for these costs when evaluating long-term income planning. REALTOR AND CLOSING FEES Selling a home typically involves a 6% realtor commission, reducing the amount available to purchase a new home out of state. Closing costs vary widely, and if a mortgage is needed, interest rates may result in higher monthly expenses than expected. PROPERTY VALUES AND COST OF LIVING Housing affordability depends on your destination. Many people relocating to Tennessee are surprised at how much home and land they can purchase, while those dreaming of Florida beachfront or coastal condos find that prices and association fees can be significantly higher.
services) varies from state to state and can meaningfully impact a retirement budget.
• Bloomington (2026):
• General sales tax: 9.75% • Food & beverage tax: 2.0% • Combined restaurant tax: 11.75%
PROPERTY TAXES Property taxes remain one of the biggest reasons Illinois residents consider relocating. Illinois consistently ranks among the highest property tax states in the country, often first or second. Locally, homeowners in Bloomington-Normal have seen their property tax bills rise rapidly in recent years. Much of this increase is driven by higher assessed home values, which can raise tax bills even when tax rates stay the same. For homeowners who do not qualify for special exemptions, these increases can create meaningful pressure on retirement cash flow. Illinois does offer the Senior Citizens Assessment Freeze Homestead Exemption (SCAFHE), which helps protect income- qualified seniors by freezing the assessed value of their primary residence. For the 2025 tax year (paid in 2026), the income limit is $65,000, increasing to $75,000 starting with the 2026 tax year, with future adjustments tied to inflation. This exemption provides meaningful relief for seniors who meet the income criteria, but many retirees earn above the threshold and therefore continue to face rising property taxes as assessments increase.
• Normal (2026):
• General sales tax: 9.75% • Food & beverage tax: 2.25% beginning April 2026 • Combined restaurant tax: 12% When property taxes, income taxes, sales taxes, fuel taxes, fees, and local taxes are combined, Illinois is consistently ranked among the highest overall tax burdens in the country, often first or second. PROPERTY INSURANCE Illinois generally maintains moderate homeowners’ insurance costs, though premiums have increased in recent years. States with elevated hurricane or coastal risk, like Florida, tend to have significantly higher insurance expenses, which should be factored into relocation planning. HEALTH CARE ACCESS Health care availability and cost vary greatly between states. It is wise to review hospital systems, specialists, Medicare options, and long-term care resources when evaluating a potential new location. Many long-term care facilities recommend beginning research 10 years or more before the anticipated need. SO … DOES MOVING MAKE SENSE? There is no universal answer. Some retirees find that moving provides financial breathing room and a lifestyle they enjoy. Others discover they prefer staying close to family, familiar routines, and community connections. The key is to understand the financial implications before making the decision. If relocating is part of your retirement vision, beginning the planning process 2–3 years in advance can help ensure a smoother transition. And whether you stay in Illinois or move across the country, maintaining continuity in your financial planning can help support a retirement built around your goals.
STATE INCOME TAXES Illinois continues to have a flat 4.95%
income tax. The proposed progressive tax structure was rejected in 2020. Although discussions about future tax changes continue, retirement income remains exempt as of 2026. This includes 401(k) and IRA withdrawals, as well as pension and Social Security benefits. Other income, such as wages, dividends, rental income, or business income, is still taxable at the state level. Several states offer different tax advantages, and nine states have no income tax at all, though other types of taxes may be higher. SALES TAXES AND EVERYDAY SPENDING Sales tax plays a major role in your cost of living:
Beyond housing, the general cost of living (groceries, utilities, insurance, and
2 McBeathFinancialGroup.com
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