$0 difference over 30 yearsFor an identical retiree (age 60, $2M, 60/40, $80K real spend), QuantCalc's Monte Carlo study found a median 30-year state-tax gap of $0 between Illinois and Florida — Florida is the cheaper state. That money stays invested, which is why Florida's median terminal balance is higher.
Illinois vs Florida at a glance
| Factor | Illinois | Florida |
|---|---|---|
| State income tax | 4.95% top | None |
| Taxes Social Security | No | No |
| Taxes 401(k)/IRA | No | No |
| State estate/inheritance tax | Yes | No |
| Tax on $100k withdrawal | $4,950/yr | $0/yr |
| Retirement-friendliness | friendly | tax free |
| 30-yr median state tax (MC) | $0 | $0 |
| 30-yr success rate (MC) | 76.01% (#11) | 75.92% (#13) |
| Median terminal balance (MC) | $975,928 | $954,632 |
The income-tax difference, year by year
The simplest way to see the gap: on a steady $100,000 annual retirement withdrawal, Illinois collects about $4,950 in state income tax and Florida collects about $0 — a difference of roughly $4,950 every year. Flat rate, exempts all retirement income (ss, 401k, ira, pensions), but $4m estate tax. No state income tax, no estate tax, primary fire destination.
Over a 30-year retirement, QuantCalc's Monte Carlo simulation (identical portfolio and spending in both states, only the tax code changes) puts the median lifetime state-tax difference at $0 — and because the saved tax stays invested and compounds, Florida's median ending balance is the higher of the two.
Beyond income tax
State income tax is only part of the retirement-cost picture. When comparing Illinois and Florida, also weigh:
- Property tax — a tax-free-income state can still have high property tax; factor your home value.
- Sales tax — affects every dollar you spend, not just income.
- Estate / inheritance tax — Illinois: has one; Florida: none. Matters for larger estates.
- Roth conversion cost — converting in the lower-income-tax state of the two cuts the state tax on each converted dollar. See conversion-tax scenarios.
See Illinois vs Florida on your full plan
Free 10,000-path Monte Carlo with every state's tax engine, Roth optimizer, ACA cliff, and IRMAA — in your browser, no signup.
Compare all states →Compare other states
Deep-dive either state: Illinois retirement tax guide · Florida retirement tax guide. Or see the full 50-state comparison and the 51-state Monte Carlo study.
FAQ
Is Illinois or Florida better for retirement taxes?
On state income tax, Florida is the lighter-tax state. In QuantCalc's 30-year Monte Carlo study, a representative retiree paid a median of $0 in state tax in Florida versus $0 in the other — a $0 lifetime difference on identical income and spending.
Does Illinois tax Social Security and 401(k) withdrawals?
Illinois does not tax Social Security benefits and exempts 401(k)/traditional IRA distributions at the state level. Flat rate, exempts all retirement income (ss, 401k, ira, pensions), but $4m estate tax.
Does Florida tax Social Security and 401(k) withdrawals?
Florida does not tax Social Security benefits and exempts 401(k)/traditional IRA distributions at the state level. No state income tax, no estate tax, primary fire destination.
How much would moving from Illinois to Florida save on retirement taxes?
On a $100,000 annual withdrawal, the state income tax is about $4,950 in Illinois versus $0 in Florida — roughly $4,950 per year of difference. Over 30 years, the Monte Carlo median gap was $0. Don't forget property tax, sales tax, and estate tax also differ — see the table above.
Last updated 2026-06-02. State tax data 2026 (Tax Foundation + state DoR). Monte Carlo figures from the QuantCalc 51-state study (2026-05-12, CC-BY-4.0): identical age-60 / $2M / 60-40 / $80K-real-spend retiree in each state. Educational only, not tax advice.