What Illinois actually takes from a 401(k) withdrawal, a pension, and Social Security — in dollars, against the state’s own brackets and exclusions rather than a yes-or-no list.
Long-term index-fund growth after expense-ratio drag — and what your state takes from the gains at withdrawal.
When your RMDs start under SECURE 2.0, how much this year's is, and what missing it costs.
2026 limits, employer match, the 60-63 super catch-up, and whether the Roth catch-up mandate applies to you.
A required minimum distribution is ordinary income, taxed at your top bracket and often pushing you into the next one. Here is the federal tax on RMDs from $20,000 to $75,000 at different income levels, why the default 10% withholding usually leaves a bill, how to avoid an underpayment penalty, and the three side effects that make the real rate higher than the bracket.
The required minimum distribution on every common balance at every age from 73 to 95, worked from the IRS table, plus what happens to the account over twenty years of withdrawals at 0%, 5% and 7% returns. The short version: the share you must take rises every year, and at good returns the dollar amount keeps rising with it.
What moving actually saves, on your own income mix rather than a headline rate — and how to establish domicile so the state you left cannot follow you.
Which account to draw first, priced. The three cliffs a withdrawal can cross without warning, the conversion window almost nobody uses, and why the order is the last big decision you can still change.
Illinois guide
On the ordinary retirement profile — $34,000 of Social Security and $61,000 of plan distributions — Illinois takes $0 a year in state income tax.
That is the number people compare, and it is the smallest of three. Property tax adds about $6,331 on the state's $315,000 median home, and insurance another $2,060. The three together come to $8,391, placing Illinois 31st of 50.
A note before you start. This is general education, not tax advice. Every Illinois figure comes from this site's own fifty-state income-tax dataset and its retirement tax engine, computed for a single filer aged 70 unless stated otherwise; property tax, median home price and insurance figures come from the site's core state dataset. Rates are for tax year 2026. Property tax is assessed locally in most states, so the effective rate here is a statewide figure rather than your county's.
On Social Security. Illinois subtracts the federally taxed portion of Social Security benefits in full, with no income threshold, no phase-out, and no age condition.
On 401(k) and IRA distributions. Fully exempt, and the scope is broader than the headline suggests. The Illinois Department of Revenue's own list of subtractable retirement income covers: qualified employee benefit plans including 401(k) plans; an Individual Retirement Account (IRA) or self-employed retirement plan; a traditional IRA that has been converted to a Roth IRA; the redemption of U.S. retirement bonds; state and local government deferred compensation plans; a government retirement or government disability plan, including military plans; railroad retirement income; retirement payments to retired partners; and a lump sum distribution of appreciated employer securities. The condition that matters: Illinois exempts only the federally taxed portion, not the gross amount. The subtraction equals the amount actually included in federal AGI and carried to Form IL-1040 Line 1, so a distribution never taxable federally produces no additional Illinois benefit. A qualified employee benefit plan is defined by reference to Internal Revenue Code sections 402 through 408, and that is the boundary: a NON-qualified deferred compensation arrangement, or a commercial annuity that is not a distribution from a qualified plan, falls outside it and IS taxable in Illinois.
Read the full Illinois guide →17 min read · Updated 2026-09-03