Retire by state
Retiring in Indiana
Indiana keeps costs near the national average and exempts Social Security, while taxing pensions and sitting in tornado country.
A fit if
A near average cost of living, low property taxes, and untaxed Social Security matter, with Lake Michigan dunes and lakes within reach.
Hard look if
Pensions and retirement account income are taxed, and the state sees tornadoes in spring and cold, snowy winters.
Figures verified May 31, 2026.
Cost of living
93
BEA index, U.S. = 100
State income tax
~3.2%
Blended planning rate
Social Security
Not taxed
2026 state treatment
Town guides
1
Researched town in-state
How the plan models Indiana
The state lines the calculator actually changes.
These are the assumptions the planner applies for Indiana. They are blended, middle-bracket planning figures, not a tax return. Exemptions, county rules, and your own income mix can move the real number.
Cost of living
93
BEA regional price parities put Indiana about 6.7% below the U.S. average cost level. The U.S. average is 100.
BEA Regional Price ParitiesState income tax
~3.2%
Indiana does not tax Social Security in the summary used here, but a 3.2% blended planning rate is used for taxable retirement-income context. IRA and 401(k) withdrawals can still need a state-tax line in Indiana, with exemptions and local rules checked against current state guidance.
Tax FoundationSocial Security
Not taxed
Indiana does not tax Social Security benefits under the current state-tax summary used here.
AARP / IRS Pub. 915Property tax
0.9%
Property tax is local, but the Indiana state-level planning rate used here is 0.9% of home value. On a $350,000 home, that is about $3,000 a year before county detail.
Tax FoundationSales tax
7.0%
Tax Foundation puts Indiana's 2026 average combined state and local sales tax near 7.0%, ranked 24 among states in that table.
Tax FoundationVehicle costs
Check cars
Vehicle costs need a separate check in Indiana because value-based vehicle taxes or registration-linked property taxes can show up in the car budget.
FreeTaxUSA vehicle-tax guideLong-term care in Indiana
The care cliff, in Indiana dollars.
CareScout and Genworth 2025 median costs, compared with the national median. Long-term care is a separate planning layer from ordinary Medicare costs.
Assisted living
$5,639/mo
About $67,665 a year, 9% lower than the national median.
Nursing home (semi-private)
$8,943/mo
About $107,310 a year, 7% lower than the national median.
Home caregiver
$6,673/mo
About $80,080 a year, about the same as the national median.
Things to do in Indiana
What daily life can look like.
Indiana Dunes National Park on Lake Michigan
Indiana Dunes National Park lines the southern shore of Lake Michigan with beaches, dunes, and trails. Boardwalks and the beach areas give flatter options alongside the steeper dune climbs.
National Park ServiceState parks and reservoir lakes
Indiana's state parks include reservoir lakes that support boating, fishing, and shoreline walks. Many parks add paved trails and nature centers that work for a range of mobility levels.
Indiana Department of Natural ResourcesIndiana Dunes State Park beaches
Indiana Dunes State Park sits next to the national park and adds its own beach, pavilion, and trail system. The lakefront and nature center give gentler ways to enjoy the shoreline.
Indiana Department of Natural ResourcesWhat to know about Indiana
The trade-offs worth weighing.
Social Security exempt, pensions taxed
Indiana exempts Social Security benefits from state income tax, but income from pensions and retirement savings accounts is taxed. The state also has low property taxes and a cost of living near the U.S. average.
SmartAssetSpring tornado and severe storm season
Indiana sits in a region that sees tornadoes and severe thunderstorms, most often in spring and early summer. Knowing local warning systems and shelter options is part of living here.
National Weather ServiceCold winters with snow
Winters in Indiana bring cold and snow, and the northern part of the state near Lake Michigan can see heavier lake effect snow. Ice and snow affect travel during parts of the season.
National Weather ServiceRetirement towns in Indiana
Towns we have mapped in Indiana.
Weighing two states?
Put Indiana next to another state.
Compare cost of living, taxes, Social Security treatment, property and sales tax, and long-term-care costs side by side.
Common questions
Retiring in Indiana, answered.
Does Indiana tax retirement income?
Indiana does not tax Social Security benefits under the current state-tax summary used here. IRA and 401(k) withdrawals can still need a state-tax line in Indiana, with exemptions and local rules checked against current state guidance. Indiana does not tax Social Security in the summary used here, but a 3.2% blended planning rate is used for taxable retirement-income context.
AARP: how states tax retirement incomeIs Indiana cheaper or more expensive than average?
BEA regional price parities put Indiana about 6.7% below the U.S. average cost level. That price level is the first reason a national retirement number needs a Indiana translation.
BEA Regional Price ParitiesWhat does long-term care cost in Indiana?
In the CareScout and Genworth 2025 medians, Indiana assisted living runs about $67,665 a year (9% lower than the national median) and a semi-private nursing-home room about $107,310 a year (7% lower than the national median).
CareScout / Genworth Cost of CareWhich towns in Indiana have a retirement guide?
Indiana has 1 researched town guide: Indianapolis. Each one breaks down local costs, services, and things to do.
Does Indiana tax Social Security and pensions?
Indiana exempts Social Security benefits from state income tax, but income from pensions and retirement savings accounts is taxed. The state pairs this with low property taxes and a cost of living near the national average.
SmartAssetSources
- BEA Regional Price Parities
- Tax Foundation: state tax data
- AARP: how states tax retirement income
- CareScout / Genworth Cost of Care
- IRS Publication 915 (Social Security benefits)
- National Park Service
- Indiana Department of Natural Resources
- Indiana Department of Natural Resources
- SmartAsset
- National Weather Service
- National Weather Service
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