The most common North Shore retirement planning mistakes are: (1) staying in a house that's too large and too expensive once kids are gone. Northern Suburbs property taxes alone can consume $20K+/year; (2) underestimating healthcare costs in the bridge years between retirement and Medicare; (3) ignoring Illinois's $4M estate tax exemption that catches more families than expected; (4) holding too much employer stock from AbbVie, Abbott, Baxter, Walgreens, or other major regional employers; and (5) claiming Social Security too early.
The house is the single biggest mistake we see across Wilmette, Winnetka, Northbrook, Glenview, Kenilworth, and the rest of the North Shore. A $1.2M home that made sense raising three children doesn't necessarily make sense at age 65 with no children at home. Property taxes of $20-30K/year, maintenance costs, utility bills, and the opportunity cost of $1M+ tied up in a single illiquid asset combine to consume cash flow that could fund a more flexible and enjoyable retirement. Many North Shore retirees won't downsize because the house is emotionally tied to family memories, but the financial cost is real and compounds over a 30-year retirement.
Healthcare gap planning is the second most common gap. Retiring at 60 means 5 years of self-funded health insurance before Medicare. COBRA and ACA marketplace plans for a couple commonly run $1,500-$2,500/month. Over 5 years, that's $90K-$150K of healthcare cost most retirees haven't budgeted. Many North Shore retirees from major corporations (Abbott, AbbVie, Baxter) have access to retiree healthcare benefits that significantly reduce this cost, but they have to actively elect coverage during specific enrollment windows. Missing the window is expensive.
Illinois estate tax catches more families than they expect. The $4M exemption sounds high until you add: the $1M+ home, $2.5M of accumulated retirement savings, $500K of life insurance, and $500K of other assets, that's $4.5M for a family that doesn't think of themselves as wealthy. Without proper trust planning (AB trust, ILIT for life insurance), Illinois estate tax can claim 8-16% of the amount over $4M. For a $7M estate, that's $300K+ that could have gone to children instead of the state.
Concentrated employer stock is the underappreciated risk. Northern Suburbs households often hold 30-50% of net worth in a single company stock through 401(k) accumulation, ESPP, RSU vesting, and stock options. This works until it doesn't, a single company-specific event can cut the position in half overnight. Diversification through systematic gain harvesting, donor-advised funds, exchange funds, or 10b5-1 plans should start years before retirement, not after.
Key facts
- Northern Suburbs property tax: typically $15K-$30K/year for $700K-$1.5M homes
- Pre-Medicare healthcare cost: typically $1,500-$2,500/month for a couple via COBRA or ACA
- Illinois estate tax exemption: $4M per person, NOT portable between spouses without AB trust
- Concentration risk: a single-stock position over 25% of net worth represents major risk
- Social Security at 62 vs 70: claiming at 62 reduces lifetime benefit by 30%; delaying to 70 increases by 24% over FRA
- Most regretted retirement decisions: claiming SS too early, keeping a too-large house, holding concentrated stock through a downturn
Should North Shore retirees move to Florida?
Sometimes, but the financial argument is weaker than commonly assumed for retirees. Florida has no income tax, but Illinois already exempts Social Security, IRA distributions, and pension income from state income tax, meaning the income tax advantage is smaller than the headline suggests. Florida property taxes on equivalent homes are typically $4K-$8K/year vs $15K-$30K in the Northern Suburbs, a real but not transformative annual savings. The strongest case for Florida is for high-net-worth families ($5M+) facing the Illinois estate tax. Florida has no estate tax, and establishing genuine Florida residency before death can save hundreds of thousands. The non-financial costs (distance from family, leaving established healthcare relationships, climate change of seasons) are real and personal.
What's the single biggest financial decision in retirement?
When to claim Social Security. The decision affects 25+ years of monthly income, locks in permanently, and interacts with spousal/survivor benefits in ways that affect both spouses' retirement security. For most North Shore couples with reasonable health and financial flexibility, delaying both spouses to 70 (or at least delaying the higher-earning spouse to 70 to maximize survivor benefit) produces materially better lifetime outcomes than claiming at 62 or 67. The math is asymmetric: claiming early reduces benefits permanently; delaying increases them permanently and provides inflation-protected longevity insurance. Run the analysis before claiming, the decision is largely irrevocable after 12 months.
