While Illinois may not be on your radar, that doesn’t mean you should overlook it as a retirement destination. The state has a lot to offer seniors, including everything from beautiful country towns to bustling cities. Plus, the Prairie State is brimming with critical retirement amenities. If you are wondering whether it’s right for you, here’s everything you need to know to retire well in Illinois.
Cost of Living
If you’re trying to decide which state is best for your retirement, examining the state’s cost of living scores is a wise move. These metrics compare how expensive an area is to the national average, allowing you to estimate overall affordability.
For cost of living scores, the national average is always 100. States that score higher than 100 are more expensive, while those that are below 100 are less expensive. For retirees on tighter budgets, finding a state with a lower cost of living may be critical.
Illinois’s overall cost of living score is 89.7. The Prairie State also comes in below 100 in four major categories. Groceries (94.8), housing (74.4), utilities (93.4), and healthcare (99.4) all come in below the national average.
As you can see, Illinois really shines when it comes to housing costs. The average home value in the Prairie State is $215,891. That’s a full $44,015 below the national average, which comes in at $259,906.
While that may lead you to think that housing quality is lower in Illinois, that isn’t the case. The lower average means that comparable properties cost less there than they do in other higher-cost areas.
The one cost of living score where Illinois is above the national average is transportation. For that, the state comes in at 104.8.
Another crucial point to review before you select a retirement destination is local taxes. How much you pay in taxes significantly impacts your budget and can make a difference for retirees at every income level
Illinois does have a state income tax. Unlike many other states, it isn’t bracketed. Instead, everyone pays the same flat rate, which comes in at 4.95 percent. However, Illinois doesn’t tax most forms of retirement income. Social Security is exempt, as well as distributions from qualifying pensions (including military retirement), IRAs, and 401(k)s. That means many seniors could avoid most – if not all – state income taxes during their golden years.
Now, the Prairie State also has a sales tax. On the state level, it’s set at 6.25 percent for general merchandise. Additionally, some qualifying purchases – including certain foods, medications, and medical devices – are only taxed at a rate of 1 percent by the state. However, there can be additional taxes at the lower level, bumping up the rate you pay, depending on the city where you’re shopping.
Comparatively speaking, property taxes in Illinois are fairly high. You may be able to reduce what you owe if you qualify for any of the available exemptions, such as the Senior Citizens Assessment Freeze Homestead Exemption or General Homestead Exemption.
Part-Time Job Opportunities
While part-time job opportunities were likely relatively available in Illinois before the coronavirus pandemic, that situation has probably changed dramatically. COVID-19 seriously hindered the local economy.
In April 2020, the unemployment rate in Illinois was a shocking 17.2 percent. The national average at that time was 14.7 percent, which is 2.5 percentage points lower. As of August 2020, the unemployment rate remains above the national average – 8.4 percent for that period – coming in at 11.0 percent. That’s 2.6 percentage points above the national average.
While this doesn’t mean that there aren’t part-time job opportunities, they could be harder to land until the local economy recovers. This is especially true if there is a resurgence of COVID-19, which could send unemployment numbers back up. As a result, retirees should make sure that, at least initially, they can largely support themselves on their retirement income, just in case they can’t find a position quickly.
Best Cities for Retirees in Illinois
The city you choose has a big impact on your retirement. Not only can it influence your costs, but it also affects your quality of life. Luckily, Illinois has some outstanding options.
Alton has long been a favorite for retirees. It’s near St. Louis, ensuring you always have access to a big city but offers a small-town, riverside community feel.
Aurora – one of Chicago’s outer suburbs – is incredibly livable. There’s a thriving arts community, a casino, and tons of boutique shops and cafes, all while being only a short drive away from Chicago.
While it’s often considered a college town, Champaign also has a lot to offer retirees. It’s a mid-sized town with a lower cost of living. Plus, there’s a youthful vibe and tons of events, so there’s always something to do and see.
How Much Money You Need to Retire Well in Illinois
Since Illinois’s cost of living is below average, it doesn’t take as much savings to retire comfortably there. Retirees with moderate incomes may have better long-term financial success in the Prairie State, especially if they avoid higher costs cities like Chicago.
Generally, with access to about $56,861 a year, it’s possible to retire well in Illinois. You should have enough cash to take care of your needs and to also afford some wants, ensuring your golden years are exactly what you envisioned.
Do you have any other tips that can help someone retire well in Illinois? Share your thoughts in the comments below.
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