Illinois ???

[militaryman]

A few years out from retirement yet and live in the Midwest currently. Thinking seriously to relocate to Missouri after retirement but thought Illinois may be much better for finances. I'm an 80 percent disabled veteran and I understand 70 percent and above get full property tax exemption in Illinois. On top of that, military pension -- not taxed, fers government pension -- not taxed, SS -- not taxed and 401k/TSP withdraws (you guessed it) not taxed! This could significantly boost the retirement budget. Illinois sales tax is among the highest but if I bought a home near Scott AFB I'd be able to get tax free groceries and use the BX (tax free).

Anything glaring financially I'm not thinking about? Anyone from Illinois using these benefits to stretch their budgets?

Thanks

 

[street]

Thank YOU for your service!
I don't have an answer for the best place to relocate at, but it sounds like you have done your homework. Not knowing any other details, I would say you are golden for retirement.

 

[GenXguy]

I'm from Illinois and will definitely appreciate that I won't have to pay state income tax on retirement income, but as a worker, I'm not there, yet. So, I'm still paying the high taxes including very high property tax. If you can get an exemption on the property tax, that is great, because it's very high in Illinois.

Sales tax was 5% when I was a kid, now it's 10% here, some places can be higher due to local taxes on top of the state sales tax. Gas is higher than surrounding states, and they even added an automatic inflation adjustment to the gas tax. At least services aren't taxed.

Edit: The grocery sales tax in Illinois is 1%, which is suspended through June 30, 2023. It does exclude some things like alcohol and soda, which are taxed at the full sales tax rate.

 

[Gumby]

I don't have an answer for you, but I do have some unsolicited advice (from a USN vet). You should live where you think you and your family will be the happiest. And that determination encompasses much, much more than taxes and tax breaks. If you can't stand a place, it won't matter that it is cheap to live there.

 

[militaryman]

Thanks for the replies! Good to know about the 1% on groceries.....

I totally agree also on the "live where your family is happiest" sentiment and would probably "test drive" the area before committing.

 

[wrigley]

I was born and raised in Chicago and both my wife and I are retired, disabled vets. My entire family lives in Chicago and the surrounding suburbs. I'm 62 and my wife is 60. NO WAY IN H^LL would I put up with those winters again. I wish you well and thank you for your service.

Mike

 

[steelyman]

I’m also from Illinois (Chicago-born) and now in a warmer clime (NC). I don’t miss the winters a-tall and am glad to be elsewhere. I enjoy going back to visit though, Illinois has a lot to offer.

On a topic well-known and much-discussed here at e-r.org: if you are considering doing any Roth conversions, doing them while an Illinois resident will allow you to avoid state tax.

 

[militaryman]

I was born and raised in Chicago and both my wife and I are retired, disabled vets. My entire family lives in Chicago and the surrounding suburbs. I'm 62 and my wife is 60. NO WAY IN H^LL would I put up with those winters again. I wish you well and thank you for your service.

Mike

Yea, I hear you on Chicago winters! Was thinking more like the area of Carbondale or Marion. Pretty far south in the state but not too far to make a run to Scott AFB every couple weeks. Also think Marion has a VA Health center there.

Maybe something like this...

 

[Rianne]

Welcome to Illinois! I live in Champaign, a university town. Lots of sports activities, and things to do for kids and adults. A great community. I'm not that excited about the corn and bean fields all around us but we have awesome forest preserves and many natural spaces within driving distance. Yes, property taxes suck. We accept the good with the bad.

 

[Ronstar]

A few years out from retirement yet and live in the Midwest currently. Thinking seriously to relocate to Missouri after retirement but thought Illinois may be much better for finances. I'm an 80 percent disabled veteran and I understand 70 percent and above get full property tax exemption in Illinois. On top of that, military pension -- not taxed, fers government pension -- not taxed, SS -- not taxed and 401k/TSP withdraws (you guessed it) not taxed! This could significantly boost the retirement budget. Illinois sales tax is among the highest but if I bought a home near Scott AFB I'd be able to get tax free groceries and use the BX (tax free).

Anything glaring financially I'm not thinking about? Anyone from Illinois using these benefits to stretch their budgets?

Thanks

Thank you for your service! I'm from Illinois, but not a veteran. Good things about Illinois - You're right - No state tax on SS and retirement account withdrawals. And the state's 1% sales tax on groceries has been suspended through June 30, 2023.

 

[VanWinkle]

I have lived in Illinois for all but 2 years of my life. Currently in Morton, Il. near Peoria. Property taxes are excessive compared to other states. It is true that all retirement income is excluded at this time from taxation by Illinois. That could change as the state is in dire financial condition due to the government pension being vastly underfunded. Chicago rules the state as far as any laws and elections. If you live downstate from Chicago, get used to getting your marching orders from Chicago. I am currently in Tennessee looking at property for a move out of Illinois. If you can get past the property taxes, retirement there can be less expensive than many areas.

Best to you,

VW

 

[braumeister]

Another retired USAF guy here, was stationed at Scott a long time ago. Lived in O'Fallon and enjoyed my three years there very much. St. Louis is close for anything a big city can provide, and the towns around Scott were friendly and welcoming. They're very accustomed to military folks, many of whom retire in the area. My only complaint, a small one, was that the humidity is very high so summers could be brutal. But that might just be because I tolerate cold much better than heat.

 

[Gumby]

I recommend Connecticut. Military retirement pay is not taxed. If your federal AGI is less than $100k (MFJ), social security is not taxed, and it is only partially taxed (up to 25% of it) above $100k AGI. If you have civilian pension income and AGI < $100k, your civilian pension is currently 56% tax free and will be 100% tax free by 2025. If your AGI is < $100k, starting next year, tIRA withdrawals will be 25% tax free, which will ramp up to $100% tax free in 2026.

More importantly, it is a beautiful state with nice people, a high quality of life, and weather that is far superior to the St. Louis area (my family all live there).

 

[militaryman]

Another retired USAF guy here, was stationed at Scott a long time ago. Lived in O'Fallon and enjoyed my three years there very much. St. Louis is close for anything a big city can provide, and the towns around Scott were friendly and welcoming. They're very accustomed to military folks, many of whom retire in the area. My only complaint, a small one, was that the humidity is very high so summers could be brutal. But that might just be because I tolerate cold much better than heat.

Thanks, I have heard that humidity can be kinda brutal a several times now Thank you for serving

 

[militaryman]

I recommend Connecticut. Military retirement pay is not taxed. If your federal AGI is less than $100k (MFJ), social security is not taxed, and it is only partially taxed (up to 25% of it) above $100k AGI. If you have civilian pension income and AGI < $100k, your civilian pension is currently 56% tax free and will be 100% tax free by 2025. If your AGI is < $100k, starting next year, tIRA withdrawals will be 25% tax free, which will ramp up to $100% tax free in 2026.

More importantly, it is a beautiful state with nice people, a high quality of life, and weather that is far superior to the St. Louis area (my family all live there).

Thanks -- I will check CT out! Interested in what exactly their prop tax exemption would equate to.

"All veterans with a disability rating of 75 percent or more in Connecticut may receive a property tax exemption of $3,000 from the total assessed value of his/her property if the veteran served at least 90 days of active duty during wartime and are honorably discharged."

I would qualify for that criteria but does $3000 mean $3k OFF the tax BILL or just a Assessed value coming down from say 200K to 197K

 

[OldShooter]

Personally, I wouldn't consider Illinois. Both the state and the city of Chicago are in dire financial states and the likelihood of some kind of bankruptcy looms. I have read, too, that there is a steady out-migration of the more affluent people. When the dust settles on all that, there will certainly be new taxes, increases in existing taxes, and a decline in property values. Not my idea of a retirement haven.

https://www.illinoispolicy.org/amen...dcfs-provisions-aimed-at-protecting-children/

https://www.chicagotribune.com/news...0190925-55e2uha64rardg7pa5734u6twu-story.html

 

[wrigley]

I recommend Connecticut. Military retirement pay is not taxed. If your federal AGI is less than $100k (MFJ), social security is not taxed, and it is only partially taxed (up to 25% of it) above $100k AGI. If you have civilian pension income and AGI < $100k, your civilian pension is currently 56% tax free and will be 100% tax free by 2025. If your AGI is < $100k, starting next year, tIRA withdrawals will be 25% tax free, which will ramp up to $100% tax free in 2026.

More importantly, it is a beautiful state with nice people, a high quality of life, and weather that is far superior to the St. Louis area (my family all live there).

My wife grew up in Trumball. Her father commuted daily into Manhattan for work. They lived in CT because it was cheaper than living in NY but CT has been one of the highest cost of living states in the country for years. Plus......it snows there!

Mike

 

[militaryman]

Personally, I wouldn't consider Illinois. Both the state and the city of Chicago are in dire financial states and the likelihood of some kind of bankruptcy looms. I have read, too, that there is a steady out-migration of the more affluent people. When the dust settles on all that, there will certainly be new taxes, increases in existing taxes, and a decline in property values. Not my idea of a retirement haven.

https://www.illinoispolicy.org/amen...dcfs-provisions-aimed-at-protecting-children/

https://www.chicagotribune.com/news...0190925-55e2uha64rardg7pa5734u6twu-story.html

Yea, Looks pretty bad fiscally. Wonder what the logic would be in "we are already a high tax state so let's "fix" our fiscal problems by raising taxes further and driving more tax payers away

 

[GenXguy]

I have read, too, that there is a steady out-migration of the more affluent people.

In one of those articles, it states, "When the Tribune looked at the demographics of people who moved out of state from the Chicago area — Cook, DuPage, Kane, Lake, McHenry and Will counties — it found the income and racial breakdowns for this group generally mirrored the patterns of the overall population in the area. Most of the movers made $50,000 or less in income, and most were white non-Hispanic, according to census survey data collected from 2013 to 2017."

So, that indicates it's reflective of the population, most making less than $50K/yr, not just affluent people.

 

[Rocket Man]

I have lived in Illinois all but two years of my life. You were wondering about the logic of raising taxes even higher to fix financial problems, which in turn drives more people and businesses out of the state, thereby lowering the tax base. I had to laugh at that one! That is called ILLINOIS logic. It makes absolutely no sense, but democrats from the Chicago area have a stranglehold on the state and they never seem to care about making sensible financial decisions. They only care about creating more government programs, usually corrupt, with free benefits, in order to obtain votes. They seem to hold fast to the idea that the federal government will eventually bail them out. Certainly not likely nowadays. I would not count on Illinois continuing to exempt retirement income, although if they discontinue the exemption there will likely be a mass exodus from the state.

 

[GenXguy]

Yea, I hear you on Chicago winters! Was thinking more like the area of Carbondale or Marion. Pretty far south in the state but not too far to make a run to Scott AFB every couple weeks. Also think Marion has a VA Health center there.

Maybe something like this...

I went to college down in Carbondale and spent some time in Marion with relatives. Winters aren't as bad down there compared to Chicago. And, the housing would be much more affordable there than nice areas around Chicago.

 

[GenXguy]

That could change as the state is in dire financial condition due to the government pension being vastly underfunded.

Underfunded and over-promised. They can't cut them because of the state constitution. There was an amendment vote back in 2012 to help address the situation of public pensions, but that was voted down by Illinois voters.

 

[Dash man]

You might consider Pennsylvania, which doesn’t tax pensions, social security or IRA withdrawals or conversions. Lots of beautiful areas in our state and a lot of history. Easy access to the D.C. area, NYC and the Jersey Shore and Delaware beaches.

 

[braumeister]

You might consider Pennsylvania, which doesn’t tax pensions, social security or IRA withdrawals or conversions.

Kentucky is the same. Very tax friendly for retirees.

 

[Teacher Terry]

Champaign is a nice college town and Springfield is nice with mild weather.