This Underrated Illinois Town Is A Top Retirement Pick Thanks To Its Trails, Festivals, And Affordable Homes

Roughly 24% of Illinois residents are over the age of 60, highlighting the growing population preparing for, or already enjoying, retirement. But how realistic is retiring in The Prairie State? While metropolitan centers like Chicago continue to grapple with soaring housing costs and congestion, smaller Illinois cities and towns are emerging as alternatives for retirees seeking affordability, safety, and community. In recent years, places once known primarily for their blue-collar work and industrial history have begun attracting a new wave of residents drawn by festivals, scenic walking trails, and modestly priced homes. One underrated Illinois city, along Rock River in northern Illinois, is gaining recognition as a retirement destination worth a second look.

Located about two hours west of Chicago and over an hour from the lively city of Peoria, ranked among the best cities to live in America, Dixon is close enough for family visits, yet far enough away to offer a slower pace. With a population of just over 15,000 people, Dixon's small-town atmosphere is part of its appeal, but what truly makes it stand out is its history. Founded in 1830 as a ferry crossing, Dixon has deep historical roots as a place where Abraham Lincoln served in the military and the childhood home of Ronald Reagan. Even agricultural manufacturer John Deere built his earliest plows in Dixon. His home and a replica of his workshop now serve as a museum with live demonstrations from blacksmiths.

Decorated in natural beauty, Dixon takes pride in its heritage by hosting a busy calendar of cultural events throughout the year. Downtown's curb appeal is well-maintained as pretty historic buildings line the city streets and riverfront trails add a year-round vacation element to this underrated Illinois neighborhood.

For retirees who value staying fit, Dixon offers multiple outdoor activities. Lowell Park, a 200-acre historic nature preserve, features walking trails, cycling paths, picnic areas, boat docks, yoga sessions, and scenic river views perfect for morning strolls or birdwatching. Rock River provides fishing, kayaking, canoeing, and quiet riverside walks, while the Dixon Park District maintains over 25 parks with tennis and pickleball courts. During the summer, free fitness classes led by the YMCA and local fitness instructors take place along the riverfront's scenic views. Golfers can also enjoy a round at the nearby Timber Creek Golf Club.

Cultural life is equally vibrant in Dixon. The Dixon: Historic Theatre and Dixon Stage Left present live plays and concerts, while The Next Picture Show fine arts center hosts art classes and rotating exhibits. History lovers can tour the Ronald Reagan Boyhood Home or explore exhibits at the Lee County Historical and Genealogical Society, where locals can pop into the research center on Hennepin Avenue to learn about the county's history and sift through old records and data. Seasonal festivals, including Petunia Festival in July, Scarecrow Festival in October, and the annual Christmas Walk, bring residents together and offer opportunities to volunteer or simply enjoy live music, parades, carnivals, fireworks, and local food.

Dining options are plentiful in Dixon and range from casual to refined. The Shamrock Pub is exactly where watering holes get their name from. The small shed-like building may appear unassuming from the outside, but this local pub prides itself on neighborly hospitality and award-winning pub food and beer. The Italian Basil Tree Ristorante is a more formal eatery but a favorite among online reviewers.

Retiring wealthy in the nation's top retirement destinations is not always financially possible for the average American. Popular states like California and Florida require seniors to save millions in order to live comfortably without an income. Just take Saratoga in California, America's most expensive place to retire, where retirees can expect to pay over $280,000 per year on living expenses. Dixon, however, provides practical advantages for retirees looking to stretch their budgets while maintaining quality of life. 

The cost of living is one of the city's strongest selling points. Downsizing is easy, as housing options include affordable single-family homes and condos. The average home sells for under $200,000, and renters can find apartments for around $700 per month, at the time of writing. Moreover, retirement communities, like Heritage Square, provide independent living in spacious duplexes, as well as assisted living and respite care. Liberty Court, on the other hand, is a pet-friendly community with studio apartments, one-bedroom and two-bedroom suites, and amenities tailored to seniors. 

Furthermore, Illinois exempts Social Security benefits, pensions, and retirement income from state taxes, and property tax rates in Dixon are lower than the state's median, helping people retire within their means. Utilities, groceries, and everyday expenses also remain lower than in more populated cities like Chicago or Naperville. Healthcare access in Dixon is also solid, with OSF Saint Katharine Medical Center providing full-service care in the city, and larger facilities in nearby Rockford available for specialty services. Safety adds another level of comfort with Dixon known for its low crime rate and strong sense of community policing.