Illinois retirees face a double tax burden that Nevada eliminates entirely: 4.95% flat state income tax on all retirement income, plus some of the highest effective property tax rates in the country. Moving to Las Vegas cuts both permanently.
Illinois is unusual among Midwestern states: it taxes pension income, IRA withdrawals, and most retirement income at its flat 4.95% rate. Social Security is exempt in Illinois, but virtually everything else is not. Nevada exempts all retirement income from state taxation. The combination of income tax elimination and property tax relief makes the Illinois-to-Nevada move one of the strongest financial cases in the country.
Illinois has the second-highest effective property tax rate in the nation at approximately 1.73–2.27% of market value. Chicago suburbs like Naperville, Schaumburg, and Downers Grove routinely have effective rates exceeding 2%. On a $400,000 Illinois home, property tax runs $6,920–$9,080 per year. On a $400,000 Nevada home, property tax runs approximately $2,200 per year. The annual property tax savings alone — $4,720–$6,880 per year — exceeds the income tax savings for many middle-income retirees.
Chicago suburb home values have been moderate compared to coastal markets — many Illinois retirees arrive in Las Vegas with $300K–$600K in equity rather than the $1M+ common for Bay Area sellers. This still funds a cash or near-cash purchase at most Las Vegas 55+ communities, especially in the North Las Vegas corridor (Sun City Aliante, Ardiente) where homes start in the $250K–$400K range.