Table of Contents
- Introduction: Why Retire in Chicago?
- Retirement Visa Options for Chicago (2026)
- Monthly Budget Breakdown for Retirees
- Rent & Housing
- Food & Groceries
- Healthcare & Insurance
Health insurance for retirees abroad: SafetyWing offers affordable international coverage starting at $45/month — no age limit surprises, covers 180+ countries.
- Utilities & Internet
- Transportation
- Leisure & Entertainment
- Healthcare System & Insurance for Retirees
- Quality of Healthcare in Chicago
- Medicare & Private Insurance Options
- Cost of Prescriptions & Long-Term Care
- Safety for Elderly Residents
- Crime Rates & Safe Neighborhoods
- Emergency Services & Senior Support
- Community & Social Life for Retirees
- Expat Clubs & Meetups
- Senior Centers & Activities
- Cultural & Recreational Opportunities
- Banking & Financial Considerations for Retirees
- Opening a US Bank Account
- International Transfers & Fees
- Credit & Debit Cards for Expats
- Tax Implications for Retirees in Chicago
- Pension Taxation in Illinois
- Double Taxation Treaties (US-UK, US-Australia, etc.)
- Property & Sales Tax Considerations
- Cost Comparison: Chicago vs. US, UK & Australia
- Housing & Rent
- Healthcare Costs
- Overall Cost of Living
- Best Neighborhoods for Retirees in Chicago
- Lincoln Park
- Hyde Park
- Andersonville
- Beverly
- Edgewater
- Accessibility & Infrastructure for Seniors
- Public Transportation (CTA, Metra, Paratransit)
- Walkability & Sidewalk Access
- Senior-Friendly Housing & Services
- Climate Suitability for Retirees
- Seasonal Weather Patterns
- Best & Worst Aspects of Chicago’s Climate
- Tips for Coping with Extreme Weather
- Final Verdict: Is Chicago a Good Place to Retire?
- Additional Resources & Useful Contacts
1. Introduction: Why Retire in Chicago?
Chicago, the "Windy City," is one of the most dynamic and culturally rich cities in the United States. With its world-class museums, vibrant arts scene, diverse culinary offerings, and stunning lakefront views, it’s an attractive destination for retirees seeking an urban lifestyle with Midwestern charm.
Key Advantages of Retiring in Chicago (2026)
✅ Affordable Cost of Living – Compared to coastal cities like New York or San Francisco, Chicago offers lower housing costs while still providing big-city amenities.
✅ Excellent Healthcare – Home to top-ranked hospitals (Northwestern Memorial, University of Chicago Medical Center) and a robust Medicare system.
✅ Strong Public Transportation – The CTA (Chicago Transit Authority) and Metra make it easy to get around without a car.
✅ Cultural & Recreational Opportunities – From the Art Institute of Chicago to Millennium Park, there’s always something to do.
✅ Diverse & Welcoming Communities – Large expat populations (especially from Europe, Latin America, and Asia) make integration easier.
✅ Four Distinct Seasons – For those who enjoy variety in weather, Chicago offers hot summers, snowy winters, and beautiful springs/autumns.
Potential Drawbacks
❌ Harsh Winters – Snow, ice, and sub-zero temperatures can be challenging for some retirees.
❌ Property Taxes – Illinois has some of the highest property taxes in the US.
❌ Crime in Certain Areas – While many neighborhoods are safe, some parts of the city have higher crime rates.
Who Should Retire in Chicago?
- Retirees who enjoy urban living but want affordability compared to NYC or LA.
- Those who prefer walkable neighborhoods with good public transit.
- Expats who want cultural diversity and international communities.
- Seniors who don’t mind cold winters in exchange for four distinct seasons.
2. Retirement Visa Options for Chicago (2026)
Since Chicago is in the United States, retirees must navigate US immigration laws. Unlike some countries (e.g., Portugal, Spain, Thailand), the US does not have a dedicated "retirement visa." However, there are several pathways to legally reside in Chicago as a retiree.
Option 1: B-2 Tourist Visa (Short-Term Stay)
- Duration: Up to 6 months (extendable to 1 year in some cases).
- Requirements:
- Proof of sufficient funds (bank statements, pension income).
- Ties to home country (property, family, job) to show intent to return.
- No work allowed.
- Cost: €160 (visa application fee).
- Limitations:
- Must leave the US before the visa expires (no path to residency).
- Cannot access US healthcare (must have private insurance).
Best for: Retirees who want to test Chicago before committing to a long-term move.
Option 2: E-2 Investor Visa (If You Own a Business)
- Duration: 2-5 years (renewable indefinitely).
- Requirements:
- Must invest a substantial amount in a US business (typically €100,000+).
- The business must be active and profitable.
- Must be from a treaty country (e.g., UK, Germany, France, Australia).
- Cost: €205 (visa fee) + legal fees (€2,000-€5,000).
- Limitations:
- Does not lead to a green card (permanent residency).
- Must maintain the business to keep the visa.
Best for: Retirees who want to run a small business (e.g., café, consulting, real estate).
Option 3: EB-5 Immigrant Investor Visa (Green Card)
- Duration: Permanent residency (green card).
- Requirements:
- Invest €800,000+ in a USCIS-approved project (usually in a Targeted Employment Area).
- Create 10+ full-time jobs for US workers.
- Cost: €800,000+ investment + €3,675 (visa fee) + legal fees (€15,000-€30,000).
- Processing Time: 2-5 years (long backlog for some countries).
- Limitations:
- High financial threshold.
- Complex legal process (requires an immigration lawyer).
Best for: Wealthy retirees who want permanent US residency.
Option 4: Family-Based Green Card (If You Have US Relatives)
- Duration: Permanent residency.
- Requirements:
- Must have a US citizen or green card holder spouse, parent, or child who can sponsor you.
- Cost: €1,200+ (filing fees) + legal fees (€2,000-€5,000).
- Processing Time: 1-3 years (varies by relationship).
- Limitations:
- Only available if you have close family in the US.
Best for: Retirees with US family members who can sponsor them.
Option 5: Digital Nomad Visa (If You Work Remotely for a Non-US Company)
- Duration: Up to 1 year (renewable).
- Requirements:
- Must work for a non-US employer (remote job).
- Proof of €3,000+/month income.
- Private health insurance.
- Cost: €200-€500 (varies by state).
- Limitations:
- No path to residency.
- Must pay US taxes if staying >183 days/year.
Best for: Retirees who work remotely and want to split time between the US and another country.
Best Visa Strategy for Retirees in 2026
| Visa Type | Duration | Cost (EUR) | Difficulty | Path to Residency? |
|---|---|---|---|---|
| B-2 Tourist Visa | 6-12 months | €160 | Easy | ❌ No |
| E-2 Investor Visa | 2-5 years (renewable) | €2,000-€5,000 | Medium | ❌ No |
| EB-5 Green Card | Permanent | €800,000+ | Hard | ✅ Yes |
| Family Green Card | Permanent | €3,000-€8,000 | Medium | ✅ Yes |
| Digital Nomad Visa | 1 year (renewable) | €200-€500 | Easy | ❌ No |
Recommendation:
- If you don’t have US family and can’t afford EB-5, the E-2 visa (if you’re from a treaty country) is the best long-term option.
- If you just want to try Chicago first, the B-2 visa is the easiest.
- If you have €800,000+ to invest, the EB-5 visa is the best path to permanent residency.
3. Monthly Budget Breakdown for Retirees in Chicago (2026)
Chicago is more affordable than coastal US cities but more expensive than smaller Midwestern towns. Below is a detailed monthly budget for a comfortable retirement in Chicago.
Assumptions:
- Couple (2 people) – Most retirees move with a partner.
- Rent: €1,000/month (1-bedroom in a safe, senior-friendly neighborhood).
- Healthcare: Medicare + supplemental insurance (€300-€500/month).
- Lifestyle: Moderate (dining out 2-3x/week, occasional travel, cultural activities).
| Category | Monthly Cost (EUR) | Notes |
|---|---|---|
| Rent (1-bedroom apartment) | €1,000 - €1,500 | Lincoln Park, Hyde Park, Andersonville |
| Utilities (electricity, gas, water, internet) | €150 - €250 | Higher in winter (heating costs) |
| Groceries | €400 - €600 | For 2 people (Trader Joe’s, Jewel-Osco) |
| Dining Out | €300 - €500 | Mid-range restaurants (€15-€30 per meal) |
| Healthcare (Medicare + Supplemental) | €300 - €500 | Part B ($174.70 in 2026) + Plan G (~€150) |
| Prescriptions | €50 - €150 | Depends on medications (some covered by Medicare) |
| Transportation (CTA Pass) | €75 - €100 | Unlimited rides (€108 for 30-day pass) |
| Car (if owned) | €200 - €400 | Insurance, gas, maintenance (€1,200-€2,400/year) |
| Entertainment (museums, shows, hobbies) | €200 - €400 | Art Institute (€25), theater (€50-€100) |
| Gym/Fitness | €30 - €80 | Senior discounts available (€20-€50) |
| Phone Plan | €30 - €60 | Unlimited talk/text/data (€30-€50) |
| Home Insurance | €50 - €100 | €600-€1,200/year |
| Miscellaneous (clothing, gifts, emergencies) | €200 - €400 | Unexpected expenses |
| Total (Monthly) | €2,785 - €4,640 | €33,420 - €55,680/year |
Budget Scenarios
| Lifestyle | Monthly Budget (EUR) | Notes |
|---|---|---|
| Frugal | €2,000 - €2,500 | Cook at home, use public transit, minimal entertainment |
| Moderate | €2,800 - €3,500 | Dining out, occasional travel, gym membership |
| Comfortable | €3,500 - €5,000 | Luxury apartment, frequent dining, travel, hobbies |
| Luxury | €5,000+ | High-end condo, premium healthcare, fine dining, frequent travel |
Key Takeaways:
✔ A couple can live comfortably in Chicago on €3,000-€4,000/month.
✔ Rent is the biggest expense (€1,000-€1,500 for a decent 1-bedroom).
✔ Healthcare costs €300-€500/month (Medicare + supplemental insurance).
✔ Public transit is affordable (€108/month for unlimited rides).
✔ Groceries are cheaper than in Europe (€400-€600/month for 2 people).
4. Healthcare System & Insurance for Retirees
Chicago has some of the best healthcare in the US, with top-ranked hospitals and a strong Medicare system. However, healthcare costs can be high without proper insurance.
Quality of Healthcare in Chicago (2026)
Chicago is home to world-class medical institutions, including:
- Northwestern Memorial Hospital (Ranked #1 in Illinois, #10 in the US)
- University of Chicago Medical Center (Top 20 nationally)
- Rush University Medical Center (Excellent for neurology & orthopedics)
- Advocate Christ Medical Center (Top 50 in the US)
Pros:
✅ Short wait times (compared to Canada/UK).
✅ Cutting-edge treatments (clinical trials, advanced surgeries).
✅ Highly specialized doctors (many trained at top US universities).
Cons:
❌ Expensive without insurance (a hospital stay can cost €10,000+).
❌ Complex billing system (surprise medical bills are common).
❌ Medicare doesn’t cover everything (dental, vision, long-term care).
Healthcare Options for Retirees
#### 1. Medicare (US Government Health Insurance)
- Eligibility: 65+ (or under 65 with certain disabilities).
- Cost (2026):
- Part A (Hospital Insurance): Free (if you paid Medicare taxes for 10+ years).
- Part B (Medical Insurance): €174.70/month (standard premium).
- Part D (Prescription Drugs): €20-€50/month (depends on plan).
- Coverage:
- Part A: Hospital stays, skilled nursing, hospice.
- Part B: Doctor visits, outpatient care, preventive services.
- Part D: Prescription drugs.
- Limitations:
- Does not cover:
- Dental, vision, hearing aids.
- Long-term care (nursing homes).
- Medical care outside the US.
Total Medicare Cost (2026): €200-€300/month per person.
#### 2. Medicare Advantage (Part C) – Private Alternative
- What it is: Private insurance plans that replace Original Medicare (Parts A & B).
- Cost: €0-€100/month (some plans have no premium).
- Coverage:
- Often includes dental, vision, hearing, and prescription drugs.
- May offer gym memberships, transportation benefits.
- Best Providers in Chicago (2026):
- Humana Gold Plus (€0 premium, good network).
- Aetna Medicare Advantage (€20 premium, extra benefits).
- Blue Cross Blue Shield of Illinois (€30 premium, strong local coverage).
- Limitations:
- Network restrictions (must use in-network doctors).
- Prior authorization required for some treatments.
Total Cost (2026): €0-€100/month (plus Part B premium).
#### 3. Medigap (Supplemental Insurance)
- What it is: Private insurance that covers gaps in Original Medicare (e.g., copays, deductibles).
- Cost: €100-€200/month (depends on plan).
- Best Plans (2026):
- Plan G (most comprehensive, covers almost everything except Part B deductible).
- Plan N (lower premium, small copays for doctor visits).
- Best Providers:
- Mutual of Omaha (competitive rates).
- AARP/UnitedHealthcare (good customer service).
- Cigna (strong nationwide network).
Total Cost (2026): €300-€500/month (Medicare + Medigap).
#### 4. Private Health Insurance (For Those Under 65)
- Who needs it? Retirees under 65 who don’t qualify for Medicare.
- Cost: €400-€800/month (for a couple).
- Best Providers (2026):
- Blue Cross Blue Shield of Illinois (€500-€700/month).
- Cigna (€450-€650/month).
- Aetna (€500-€800/month).
- Limitations:
- Expensive (especially for older retirees).
- High deductibles (€1,500-€5,000).
#### 5. Long-Term Care Insurance
- What it is: Covers nursing homes, assisted living, in-home care.
- Cost: €150-€400/month (depends on age & coverage).
- Best Providers (2026):
- Genworth (€200-€350/month).
- Mutual of Omaha (€180-€300/month).
- New York Life (€220-€400/month).
- When to Buy: Before age 60 (premiums rise sharply with age).
Total Cost (2026): €150-€400/month per person.
Prescription Drug Costs (2026)
| Medication | Monthly Cost (EUR) | Notes |
|---|---|---|
| Lisinopril (blood pressure) | €5 - €15 | Generic available |
| Metformin (diabetes) | €4 - €12 | Generic available |
| Atorvastatin (cholesterol) | €10 - €25 | Generic available |
| Insulin (Humalog) | €100 - €300 | Medicare covers most |
| Eliquis (blood thinner) | €50 - €150 | Medicare covers most |
| Viagra (erectile dysfunction) | €20 - €50 | Not covered by Medicare |
Tips to Save on Prescriptions:
✔ Use generics (80-90% cheaper than brand-name drugs).
✔ Shop at Costco/Sam’s Club (cheaper than CVS/Walgreens).
✔ Apply for Medicare Extra Help (subsidy for low-income retirees).
✔ Order from Canada (some medications are 50-70% cheaper).
Healthcare Cost Summary (2026)
| Insurance Type | Monthly Cost (EUR) | Best For |
|---|---|---|
| Original Medicare (Parts A & B) | €175 - €250 | Basic coverage |
| Medicare Advantage (Part C) | €0 - €100 | Extra benefits (dental, vision) |
| Medigap (Supplemental) | €100 - €200 | Full coverage (no copays) |
| Private Insurance (Under 65) | €400 - €800 | Retirees not yet on Medicare |
| Long-Term Care Insurance | €150 - €400 | Future nursing home care |
Recommendation:
- If 65+, Medicare + Medigap (Plan G) is the best option (€300-€500/month).
- If under 65, private insurance is necessary (€400-€800/month).
- Long-term care insurance is highly recommended if you can afford it.
5. Safety for Elderly Residents in Chicago
Chicago has a mixed reputation for safety, with some areas being very safe and others having higher crime rates. Retirees should choose neighborhoods carefully.
Crime Rates in Chicago (2026)
- Violent Crime Rate: 9.5 per 1,000 residents (higher than US average of 4.0).
- Property Crime Rate: 20.5 per 1,000 residents (slightly higher than US average of 19.6).
- Homicide Rate: 18 per 100,000 (down from 25 in 2021 but still high).
Comparison with Other US Cities (2026):
| City | Violent Crime Rate (per 1,000) | Property Crime Rate (per 1,000) |
|---|---|---|
| Chicago | 9.5 | 20.5 |
| New York | 5.2 | 14.1 |
| Los Angeles | 7.8 | 23.1 |
| Houston | 10.1 | 35.2 |
| Phoenix | 6.9 | 30.5 |
Key Takeaway:
- Chicago is safer than Houston but more dangerous than NYC or LA.
- Most crime is concentrated in specific areas (South & West sides).
Safest Neighborhoods for Retirees (2026)
| Neighborhood | Violent Crime Rate (per 1,000) | Property Crime Rate (per 1,000) | Why It’s Good for Retirees |
|---|---|---|---|
| Lincoln Park | 2.1 | 12.5 | Walkable, near hospitals, low crime |
| Hyde Park | 3.5 | 15.2 | University of Chicago security, cultural attractions |
| Andersonville | 2.8 | 10.1 | LGBTQ+ friendly, great restaurants, safe |
| Beverly | 1.9 | 8.7 | Suburban feel, low crime, affordable |
| Edgewater | 3.2 | 14.3 | Lakefront views, diverse, good transit |
| Lakeview | 2.5 | 13.8 | Near Wrigley Field, lively but safe |
| Gold Coast | 2.3 | 11.9 | Luxury living, high-end amenities |
Best for Retirees:
✅ Lincoln Park, Hyde Park, Andersonville, Beverly – Low crime, walkable, senior-friendly.
❌ Avoid: Englewood, West Garfield Park, Austin – High crime, unsafe for seniors.
Emergency Services & Senior Support
- Chicago Police Department (CPD):
- Senior Services Unit – Helps elderly victims of crime.
- Neighborhood Watch Programs – Encourages community safety.
- Chicago Fire Department (CFD):
- Free smoke detector installations for seniors.
- Emergency medical services (EMS) – Fast response times.
- Senior Helpline (311): 1-312-744-4016 – For non-emergency assistance.
- Senior Wellness Checks: Some police districts offer free check-ins for elderly residents.
Safety Tips for Retirees:
✔ Avoid walking alone at night (even in safe neighborhoods).
✔ Use well-lit streets (stick to main avenues).
✔ Get a medical alert system (e.g., Life Alert, Medical Guardian – €25-€50/month).
✔ Join a neighborhood watch group (many areas have Facebook groups).
✔ Use rideshares (Uber/Lyft) at night instead of public transit.
6. Community & Social Life for Retirees
Chicago has a thriving expat and senior community, with plenty of clubs, activities, and cultural events to keep retirees engaged.
Expat Clubs & Meetups
Chicago has large expat communities from Europe, Latin America, and Asia.
| Expat Group | Nationality | Activities | Website |
|---|---|---|---|
| Chicago Expats | International | Networking, pub nights, cultural events | [Meetup](https://www.meetup.com/chicago-expats/) |
| British American Club | UK/US | Tea socials, pub quizzes, holiday parties | [Website](https://www.britishamericanclub.org/) |
| Alliance Française de Chicago | French | Language classes, film screenings, wine tastings | [Website](https://www.af-chicago.org/) |
| German-American Cultural Center | German | Oktoberfest, language exchange, hiking trips | [Website](https://www.dankhaus.com/) |
| Irish American Heritage Center | Irish | Live music, dance classes, St. Patrick’s Day events | [Website](https://www.irish-american.org/) |
| Latin American Chamber of Commerce | Latin American | Business networking, salsa nights, cultural festivals | [Website](https://www.lacc-chicago.com/) |
| Australian & New Zealand Society | Aussie/Kiwi | BBQs, sports events, holiday gatherings | [Facebook](https://www.facebook.com/groups/ANZChicago/) |
Best Expat-Friendly Areas:
- Lincoln Park (young professionals, expats).
- Lakeview (LGBTQ+ friendly, international crowd).
- Hyde Park (academic, intellectual community).
- Andersonville (Scandinavian, LGBTQ+ friendly).
Senior Centers & Activities
Chicago has over 20 senior centers offering classes, trips, and social events.
| Senior Center | Location | Activities | Cost |
|---|---|---|---|
| Lincoln Park Senior Center | 2045 N. Lincoln Ave | Yoga, art classes, day trips | €5-€20 per class |
| North Center Senior Center | 4040 N. Oakley Ave | Bingo, dance lessons, computer classes | Free-€15 |
| South Shore Senior Center | 1633 E. 71st St | Health screenings, book club, gardening | Free |
| Chinese American Service League (CASL) | 2141 S. Tan Ct | Tai Chi, language classes, cultural events | Free-€10 |
| Polish American Senior Center | 5711 N. Milwaukee Ave | Folk dancing, cooking classes, holiday parties | Free-€15 |
Popular Senior Activities in Chicago:
✅ Museums & Cultural Events (Art Institute, Chicago Symphony Orchestra).
✅ Fitness Classes (Yoga, Tai Chi, water aerobics at local gyms).
✅ Book Clubs & Writing Groups (Chicago Public Library).
✅ Volunteering (Chicago Food Depository, Habitat for Humanity).
✅ Travel Groups (Road Scholar, senior travel clubs).
Cultural & Recreational Opportunities
Chicago is a cultural hub with endless entertainment options.
| Activity | Cost (EUR) | Best For |
|---|---|---|
| Art Institute of Chicago | €25 (senior discount) | Art lovers |
| Chicago Symphony Orchestra | €30-€100 | Classical music fans |
| Second City Comedy Club | €20-€50 | Comedy & improv |
| Millennium Park (Free) | Free | Outdoor concerts, festivals |
| Chicago Architecture Center River Cruise | €45 | History & architecture buffs |
| Chicago Botanic Garden | €15 (senior discount) | Nature lovers |
| Wrigley Field (Cubs Game) | €30-€100 | Baseball fans |
| Navy Pier (Ferris Wheel, Fireworks) | €15-€30 | Family visits, sightseeing |
Free & Low-Cost Activities:
- Chicago Public Library (free events, book clubs).
- Lincoln Park Zoo (free admission).
- Grant Park & Lakefront Trail (free, great for walking).
- Free Museum Days (Art Institute, Field Museum – check websites for dates).
7. Banking & Financial Considerations for Retirees
Opening a US bank account is essential for retirees in Chicago. Here’s what you need to know.
Opening a US Bank Account as a Retiree
Requirements:
✔ Passport (with visa/stamp).
✔ Proof of address (utility bill, lease agreement).
✔ Taxpayer Identification Number (TIN) – Either:
- Social Security Number (SSN) (if you have a work visa).
- Individual Taxpayer Identification Number (ITIN) (if you don’t qualify for an SSN).
✔ Proof of income (pension statements, investment accounts).
Best Banks for Expats in Chicago (2026):
| Bank | Monthly Fee | ATM Access | International Transfers | Best For |
|---|---|---|---|---|
| Chase | €0-€12 | 16,000+ ATMs | €35-€50 fee | Large branch network |
| Bank of America | €0-€12 | 16,000+ ATMs | €35-€50 fee | Good customer service |
| Wells Fargo | €5-€15 | 13,000+ ATMs | €30-€45 fee | Low fees for seniors |
| Charles Schwab | €0 | Free worldwide ATMs | Free | Best for frequent travelers |
| HSBC | €0-€50 | Global ATMs | Low fees | International retirees |
Best Choice for Expats:
- Charles Schwab (no fees, free international ATM withdrawals).
- Chase or Bank of America (large branch network, easy to open).
International Transfers & Fees
Sending money from Europe/Australia to the US can be expensive due to bank fees and exchange rates.
| Transfer Method | Fee | Exchange Rate | Speed | Best For |
|---|---|---|---|---|
| Bank Wire Transfer | €20-€50 | Poor (2-3% markup) | 1-3 days | Large transfers |
| [Wise](https://wise.com/invite/dic/alessandrob1684) (TransferWise) | €1-€3 | Excellent (mid-market rate) | Instant-1 day | Small/medium transfers |
| Revolut | €0-€3 | Good (small markup) | Instant | Frequent transfers |
| PayPal | €3-€5% | Poor (4-5% markup) | Instant | Small transfers |
| Western Union | €5-€10 | Poor (3-4% markup) | Instant | Cash pickup |
Best Option: Wise (TransferWise) – Low fees, best exchange rates.
Credit & Debit Cards for Expats
- Best Debit Card: Charles Schwab (no foreign transaction fees, free ATMs).
- Best Credit Card: Chase Sapphire Preferred (no foreign fees, travel rewards).
- Best for Seniors: AARP Credit Card (cashback on groceries, gas).
Tip: Avoid dynamic currency conversion (when merchants ask "Pay in EUR or USD?" – always choose USD to avoid bad exchange rates).
8. Tax Implications for Retirees in Chicago
Understanding US and Illinois taxes is crucial for retirees to avoid double taxation.
Pension Taxation in Illinois (2026)
- Illinois does NOT tax Social Security benefits.
- Illinois does NOT tax most pensions (including 401(k), IRA, private pensions).
- Exception: Federal government pensions (e.g., military, civil service) are taxed.
Comparison with Other States:
| State | Social Security Taxed? | Pension Taxed? |
|---|---|---|
| Illinois | ❌ No | ❌ No (most pensions) |
| California | ❌ No | ✅ Yes (up to 9.3%) |
| New York | ❌ No | ✅ Yes (up to 8.82%) |
| Florida | ❌ No | ❌ No |
| Texas | ❌ No | ❌ No |
Key Takeaway:
- Illinois is one of the best states for retirees tax-wise.
- No state income tax on Social Security or most pens