Considering moving from Illinois?

Considering moving from Illinois?

February 27, 2020

One of the main things I hear from friends and clients these days is about moving away from Illinois because of all of the taxes.  Income taxes, property taxes (ouch!), sales taxes.  They certainly seem to take a big bite out of our income.  And with the recent tax reform, most of these taxes might be limited and not even available for a deduction.  This is certainly true for those of us who are working.  However, it may be a different story if you are retired.

If you are considering moving out of state, a key thing to know is that Illinois does not tax retirement income.  That includes income from Social Security, pensions and IRA/401k distributions.  For most people, that is a huge surprise.  At the current Illinois tax rates, that is a 5% savings immediately when you retire.

As an example, if you are single and you have $30,000 in social security income and $30,000 in IRA distributions, you would pay no income tax in Illinois. However, if you lived over the border in Wisconsin, you might be subject to 4%-7% on the IRA/pension income.  While this tax savings may not offset our high property taxes, it is a good thing to consider if you are thinking of moving just because of the taxes. 

As you contemplate a move either for work or retirement, it is important to understand all the taxes that you might be subject to.  A couple resources you can use are  and  If you are considering moving, lets make sure we build that into your plan.

Live Fully. Plan wisely.

This commentary was created by Aspire Planning Group and is for informational purposes only. The views expressed are based on current market conditions and are subject to change. The commentary does not take into account any investor’s particular investment objectives, strategies, tax status, or time horizon. There are no assurances that the techniques and strategies discussed are suitable for all investors or that the predicted results will occur. The commentary does not constitute investment advice, tax advice, or legal advice. All investments are subject to risk, and past performance is no guarantee of future results.
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