The No. 1 worst U.S. state to retire — it’s not New York or California
Hey there! Thanks for stopping by. It’s always great to share some interesting facts and research, especially around retirement (we all dream of a peaceful one, don’t we?). You must be curious about which U.S. state has the discreditable title of being the “worst” for retirees. While you might think it’s New York or California, given their high cost of living, you might be surprised to learn that they’re not at the top of the list.
In fact, various factors come into play when determining the best or worst states for retirement. These include the tax climate, living costs, healthcare quality, weather, and even crime rates. With these factors in mind, can you guess which state ends up last in this race? Let’s end the suspense – It’s actually Illinois! Yes, you read that right. Now, let’s dive deeper into why this is so.
Many retirees desire affordability, safety, and healthcare accessibility during their retirement phase, and unfortunately, Illinois seems to fall short in delivering these features. And it’s not just about the numbers or data-driven factors; real-life experiences from residents also paint a gloomy picture of retiring in Illinois. But what exactly makes Illinois the least desirable state for retirees? Let’s explore.
Living Costs: Higher than The National Average
Let me start with this- Illinois is expensive! On an overall scale, the cost of living in the Prairie State is higher than the national average. Even though housing costs may vary depending on whether you are in urbanized Chicago or more rural areas, they still bite a large chunk out of your budget.
Here’s a snapshot:
The median home cost in Illinois is around $219,300 compared to the U.S. average of $231,200.
While healthcare costs tend to be slightly below average in Illinois, don’t let that fool you. The other expenses like utilities and transportation are significantly higher.
Even the groceries can eat up your money! The grocery index for Illinois stands at 94.2, slightly below the national average of 100. But again, it depends on where in the state you’re residing.
Speaking of taxes – don’t get me started. The property tax in Illinois is known to be one of the highest in the nation. It’s nearly double the national median!
If you wish to rent instead of buying a home, well, renting isn’t cheap either. The median monthly rent is above the national average.
A general sales tax of 6.25% applies statewide, with municipalities adding their own sales taxes on top. Some places have a combined sales tax as high as 10.00%.
Unfriendly Tax Climate for Retirees
Not only does Illinois have a high cost of living, but its tax climate for retirees isn’t exactly friendly either. The taxation situation here can leave a significant dent in a retiree’s budget. It’s considered as one of the least tax-friendly states for retirees.
In contrast to many U.S. states that exempt all or some part of retirement income from taxes, Illinois taxes most types of retirement income (including Social Security and pensions) at the state level.
The aforementioned high property taxes are another thorn in retirees’ sides. The homeowners who were surveyed stated that property taxes were their number one cost concern.
Despite having a flat rate income tax system, there are plans to implement a graduated income tax structure in Illinois, which could increase taxes for higher earners.
The sales tax rate in Illinois can reach up to 11% in some municipalities when local taxes are counted, putting extra pressure on a retiree’s pocket.
Illinois charges an estate tax on death-causing any inheritance you leave behind to be possibly subject to taxation.
The state also imposes an additional “use tax” for untaxed items purchased from out of state or online. This applies even if you plan to use the item in Illinois.
Poor Fiscal Health
You might think living costs and taxes are enough to make Illinois a less desirable retirement destination, but there’s more. The state’s poor fiscal health plays a considerable role too. As a resident, the state’s budgetary woes may eventually trickle down to affect services valuable to retirees.
Let’s take a closer look:
One of the major problems contributing to Illinois’ recent economic struggles is its underfunded pension systems. With ongoing shortfalls, it puts more tax burdens on its residents to fill the gap.
This poor fiscal health has led to bond rating downgrades. The lower a state’s credit rating, the higher its borrowing cost
Lower credit ratings have made it harder for Illinois to borrow money, further stretching its already-tight finances.
Because of these fiscal difficulties, some services important to seniors like health and human services could be underfunded or cut entirely.
The poor fiscal health has forced many younger population to leave the state, making it even more difficult for the state to rectify the situation.
Public transportation systems, parks, and public libraries, which can greatly influence a retiree’s quality of life, can also face cuts due to budgetary strains.
After dissecting all these factors, it becomes quite clear why Illinois has earned the dreadful title of being the worst state for retirees. But remember, choosing a place to retire is a personal decision and requires careful consideration of various aspects. Maybe you’ve got family ties in Illinois or certain inherent characteristics about the state appeal to you. It’s essential to personally scrutinize how your retirement standards align with what Illinois has to offer.
Average cost of living
Higher than national average
Tax climate for retirees
This data only represents a part of what should be a multi-faceted decision about where to retire. While Illinois might not stand out as the most attractive option for retirees from this perspective, there are still many individuals who enjoy and cherish their lives here. After all, every place has its pros and cons, just like life itself!
So, whether you decide to retire to the sun-soaked beaches of Florida or the verdant hills of Virginia, ensure you make a well-informed choice. Happy (future) retirement!