Retiring from Illinois to Phoenix, Arizona

Illinois has the highest property taxes in the Midwest and significant income taxes. Phoenix offers the opposite — dry climate, year-round outdoor activity, and one of the country's most developed active adult markets.

Quick Reference

Phoenix metro median price
Days on market
Sun City entry price~$175K+
Arizona income tax2.5% flat
Drive/Flight~26 hours (I-55 south to I-40 west — some retirees drive but most fly)

The Illinois-to-Phoenix retirement move is driven primarily by property taxes and climate. Illinois property taxes are genuinely punishing — DuPage County homeowners paying $12,000–$16,000/year in property taxes arrive in Sun City West and find themselves paying $3,500/year. The savings are immediate and permanent. The climate improvement is equally immediate: Chicago winters are among the harshest in the Midwest; Phoenix winters are essentially perfect.

Illinois has a strong presence in the Sun City corridor — the I-55 to I-40 west route is a well-traveled Midwest retirement highway. The Phoenix active adult community has a large Illinois contingent, and the Midwest culture fits naturally with the Sun City social model. Former Chicagoans find the community's organized, activity-focused culture familiar and comfortable.

The Financial Picture

Illinois income tax: 4.95% flat. Arizona: 2.5% flat. Annual income tax savings on $80,000 retirement income: approximately $1,960/year. Illinois also has county taxes in some areas. The bigger driver is property taxes — Illinois property taxes are crushing and the Arizona comparison is dramatic.

Cook County (Chicago) effective property tax rates: 2–3%+. DuPage and Lake counties: 1.8–2.5%. On a $500,000 Illinois home: $9,000–$15,000/year in property taxes. A comparable Phoenix active adult home: $3,000–$5,000/year after homestead-equivalent exemptions. Annual savings: $6,000–$10,000. The Illinois-to-Arizona property tax case is among the strongest of any state pair.

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The Real Estate Math

Chicago North Shore and western suburbs (Naperville, Wheaton, Hinsdale, Lake Forest) have appreciated well. Many Illinois retirees have $400K–$700K in equity. That equity funds all-cash Phoenix purchases across most communities.

Chicago spring market is competitive. Phoenix is a year-round market. Many Illinois retirees visit Phoenix in January–February to see the climate, then sell in Chicago spring, and close Phoenix in summer or fall.

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