Florida has no state income tax and property taxes around 0.8–1.2% on homesteaded properties. Illinois has property taxes of 2.0–2.8% but exempts 100% of retirement income from state income tax. The comparison is not as one-sided as "Florida has lower taxes" suggests — it depends entirely on your income level, home value, and what you value beyond the tax math.
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Talk to a Specialist →The Core Tax Comparison — Illinois vs. Florida
| Tax Item | Illinois (DuPage Co.) | Florida (Sarasota Co.) |
|---|---|---|
| State income tax on $90K retirement income | $0 (fully exempt) | $0 (no state income tax) |
| Property tax — $350K home | ~$7,000–7,700/yr | ~$2,800–3,500/yr (homesteaded) |
| Home insurance (estimate) | ~$1,500–2,000/yr | ~$5,000–12,000/yr (post-2023) |
| Total estimated housing cost gap | Florida property tax savings: ~$3,500–4,900/yr. Florida insurance premium: ~$3,500–10,000/yr more. | |
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What Actually Drives the Illinois vs. Florida Decision
Financial factors favoring Florida
If your home prices are comparable and Florida insurance costs are manageable (typically under $5,000/year for inland communities), Florida wins on total annual housing cost by $2,000–$5,000/year depending on county. Over 10 years that is $20,000–$50,000 in real savings. The climate benefit, if you prefer warmth year-round, is worth additional consideration as a non-financial quality-of-life factor.
Financial factors favoring staying in Illinois
Illinois retirement income tax exemption — zero. Florida also has no income tax, so this is a wash if your income is primarily retirement distributions. The real Illinois advantages are: proximity to family and established social networks (which have real cost value — fewer flights, no hotel costs for family visits), established medical relationships that do not require rebuilding, and lower home insurance costs. The "Illinois taxes are punishing" narrative ignores that Illinois exempts the income most retirees actually receive.
The non-financial factors that actually decide it
Most Chicago retirees who move to Florida and return within 5 years cite the same reasons: family proximity, social isolation in a new community, and missing the actual seasons (not just the cold — the full four-season calendar). Most who stay in Florida successfully cite: established friend networks already in Florida, distance from family that was already large, and genuine preference for a warm climate year-round. The financial math rarely makes the decision; the lifestyle alignment does.
| Factor | Illinois Edge | Florida Edge |
|---|---|---|
| State income tax | Both are $0 on retirement income | — |
| Property tax ($350K home) | — | Saves ~$3,500–5,000/yr |
| Home insurance | Saves ~$3,000–8,000/yr | — |
| Climate | Four seasons, harsh winters | Warm year-round |
| Family proximity (Chicago-based family) | Usually better | Usually worse |
| Social network rebuilding | Established | Must build from scratch |
| Medical continuity | Existing relationships | Must establish new |
| Net financial verdict | Florida wins modestly on taxes IF insurance is manageable. Illinois wins on insurance. Overall: roughly a wash in many scenarios. | |
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