Midwestern Retirements Part 2: Michigan, Illinois, Indiana, and Ohio

You didn't mention the awful roads in Michigan!

Thank you for all your hard work providing this information. These are exactly the kind of areas that attract my husband and me. We avoid tourist communities which so many people retire to, whether it be north, south, east or west. I'm taking notes and planning to visit several of the places you discussed. Many of them I already knew about. This gives me the push to go have fun! I already live in the Midwest. Well, NE Ohio which doesn't really seem Midwest. Honestly it's really 3 months that get seriously cold. We're not ones to want summer all year so 2-3 months away is more than enough for us. As far as roads in MI go in my opinion Rhode Island has the roughest. The only thing wrong with many of the areas you covered is the bashing that people do about them. I don't get it, I've lived in areas down south that are considered perfect retirement areas and I couldn't disagree more. The area offers beautiful topography, museums, colleges, libraries, restaurants and outstanding healthcare facilities.

Columbus, Ohio was never on my radar as a place to move to; lived in a lot of well-known cities and states...but Ohio? Well a long-time friend moved here and liked it; after living through 4 hurricanes in Florida, sold my home, quit my job and moved to O-H-I-O. Have been reading this newsletter, subscribe to a where to retire magazine and still didn't know where I'd retire. Last week, I pretended that I knew nothing about Ohio, let alone Columbus. Surprise, surprise I was so impressed and to boot was surprised about the low cost of living, amazing healthcare and research facilities, Columbus seemed to tick off my wants and needs that I had prepared for other cities. For now, Columbus will be where I start my retirement; it really is a hidden treasure and readers of this week's column would do well to heed the remarks.

There are nice affordable 55 communities and cities in Ohio…, Stow, Grove City, Oberlin, Tipp City and Zanesville, to name a few areas I like. Lol! Columbus or Pittsburg? Really? Really?? Both are nice to visit....It is about a healthier climate for me, mentally and physically. Rent a place for a year and decide for yourself. There is always an option to be a snowbird, if you can afford it a second home. You could own an RV and live out it for 3 months of the year (more like 4-5 months) in a warmer climate.

We have lived in NW Indiana for over a decade in a small town near Lake Michigan. The cost of living is low and there are plenty of things to do. Working just two halfdays a week at a golf pro shop gives me the equivalent of a full golf membership. We bought a used pontoon boat and have it in a local lake for just $750 for the season, which includes membership in the local "Yacht" club where drinks are $2.50 and lots of friendly people. So many beer & winefests in the summer, you can't go to them all.
We have gone south for the last 5 years from Jan-March but this year plan to stay here with just some short trips out of the area. We want to save our money to mark off two bucket list items next year, Oktoberfest in Munich, and a stay in Tuscany for a week. We had thought about moving south several years ago, but with our life here among many good friends, we decided to stay.
This is what a good retirement is to us!!

Check out Ohio taxes for retirees before you commit.

Bill is your social security and pension taxed in Indiana as a retiree? How are property taxes?

Jeff: What taxes concern you in Ohio? Ohio real estate taxes look lower than PA but comparable to NC on realtor.com. (The PA difference may be offset by the fact that PA doesn't tax retirement income.) Ohio real estate taxes look a little higher than FL, but FL's insurance costs are substantially higher and that offsets them. I thought Ohio didn't tax Social Security? Gas taxes and sales taxes seem pretty comparable. Am I missing an additional tax? I still haven't looked at estate taxes in OH.

SC still has the lowest tax bite of the states I'm considering thanks to really low real estate taxes, but I'm also weighing Northern winters to be closer to family..

Social Security retirement benefits are exempt from the state income tax in Indiana, while income from pensions and retirement savings accounts are not. Indiana has low property taxes and the fourth lowest average cost of living in the U.S. Wages are taxed at normal rates, the marginal state tax rate is 4.0%.
Our property tax on an 1800 sf home on two acres is about $1000

Ohio taxes your pension and IRA distributions, See Kiplinger tax tables by state or Ohio.gov.

Jeff - Thank you! There aren't too many states that don't tax that income (and the ones that don't usually have other expenses (like the higher insurance costs in FL or higher real estate taxes in PA) that tend to balance out for many states. Some states also have exemptions that help to reduce a retiree's actual taxable income. Figuring out the actual cost of living can be very tricky. Kiplinger's and the various cost of living calculators on the real estate sites are good for research, to help narrow down the choices. I am going to spend the $20 per state for the state software on Turbotax this year for my two finalist states and run a sample return, to see how the same info compares. Yes, I am a "little" compulsive about research. I will make my final decision and retire at 65 in the first quarter of 2018, since I have hit my financial target HURRAY! I am focused on the East Coast, and am familiar with each location on my final list. For me, it's down to SC, PA, OH (and a distant 4th FL). Each one has a lot of pros and cons, like weather or being near to relatives. This is harder than I thought it would be!

Kate- Also look at Ky, Tn, and Ga. Even then carefully look at the taxes et all in specific locations. Different states, locals, may better than others depending on your finances and how they are structured.

Thank you for your tour of Michigan, my home state. I currently live in CA. I was very disappointed that you were unable to spend more time in Traverse City, MI. I lived there for over 23 years and it is the most beautiful place in the world to live. Spring, Summer, and Fall are so beautiful!!! Then you would need to go someplace warm for the winter, say from October until April (that is when the snow flies)! Munson Medical Center is and excellent hospital; an regional medical center in Traverse City with First Class physicians, nurses, surgeons, a Cancer Center, Hospice and Palliative Care program; a Rehab program. A skilled facility next to the hospital. Everything you need. A hospital based Home Care program; Private Duty. The best of the best in medicare care. Great restaurants; shopping, entertainment, the National Cherry Festival every year. Grand Traverse Bay. A walking/biking trail. Traverse City has it all; and a beautiful Senior Center on the water! Go for a visit and you won't be disappointed! You'll want to move :)

I agree with all of the above comments.

A year ago, the wife and I on one of our day trips, stumbled upon Gallipolis, Ohio. Since then we have visited the town every other month. We spent two weeks for a vacation in this surprising town after the 4th., finding it is a very friendly retirement community. Boating and fishing is important to me, and my wife loves entertaining places. Winter was mild, little snow (has a history of 8 inches a year!) and Summer has a need for air conditioning. On the east side of town is all the major shopping stores. There is a local smaller airport to make connecting flights in Columbus, 90 miles northwest. People can use motorized vehicles, hike, or bike on the local trails. There is even a golf course. It may seem small time to some, but it is big time living in a small active town at a lessor cost.