You served this great nation for years, maybe decades, and now you’ve transitioned back to civilian life. First, we’d like to say congratulations, and thank you for your service! We know you and your family made a lot of sacrifices, and we appreciate everything you did to help keep our nation safe.
One of the sacrifices you made during your military career was not having much say in where to live. The needs of the service and your specialty meant you didn’t always get your first (or second) choice of locations.
But now that you’re out, you and your family have more freedom in deciding where to call home. Maybe you want to return to where it all started, back to where you grew up. Or maybe you want to try someplace completely new. In any case, the choice is yours, and there are many options.
If you’re thinking of trying someplace new, the first decision is which state to relocate to. Each state has its own individual character, and some may be more attractive for military retirees than others. Some features that may be relevant to military retirees when choosing a place to live include:
- Cost of living including housing costs
- Veteran population
- Percentage of population aged 60 and over
- Quality of Life https://wellbeingindex.sharecare.com/wp-content/uploads/2023/09/CWBI-State-Rankings-Report20230828.pdf
- Healthcare
Of course, you may have other criteria when deciding on a place to call home. The choice of where to live is very personal and subjective. Nevertheless, these are some of the features of a place that make it appealing to many military retirees.
Consider Your and Your Family’s Preferences
During your years in the military, you probably lived in multiple locations, so you may have a good idea of what you like and don’t like, in terms of climate, environment, and community. This may help you narrow down your choices, as you have an idea of what parts of the country you do and don’t want to live in. You may want to be close to your relatives, so that could also influence your decisionmaking. The choice of where to live will affect your entire family, so you’ll want to include them in each step of the decision process.
States That Don’t Fully Tax Military Retirement
There are several things to consider when deciding where to relocate in retirement. [LINK] You might be hunting for a place where your retired pay will go farthest. This means, for one thing, a state that won’t take a bite out of your military retired pay. There are nine states that have no state income tax:
- Alaska
- Florida
- Nevada
- New Hampshire
- South Dakota
- Tennessee
- Texas
- Washington
- Wyoming
Other states have income tax but exempt military retired pay. According to Veteran.com, these states are:
- Alabama
- Arizona
- Arkansas
- Hawaii
- Illinois
- Indiana
- Iowa
- Kansas
- Louisiana
- Maine
- Massachusetts
- Michigan
- Mississippi
- Missouri
- Nebraska
- New Jersey
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Pennsylvania
- Rhode Island
- South Carolina
- West Virginia
- Wisconsin
Finally, some other states give credits or partial exemptions for military retired pay, according to Kiplinger:
- Colorado
- Delaware
- District of Columbia
- Georgia
- Idaho
- Kentucky
- Maryland
- Montana
- New Mexico
- Oregon
- Utah
- Vermont
- Virginia
The exemption in each state depends on the retiree’s age and income and the amount of retired pay received.
Note that tax laws are complicated and subject to constant changes and updates. Be sure to check the current laws in the states you’re considering and consult a qualified accountant or tax professional if in doubt.
An off-topic sidebar on the subject of taxes: even if you live in a state that doesn’t tax military retired pay, remember the federal government still does. So if you decide to get a paid civilian job to supplement your military retirement, make sure you adjust your federal withholdings appropriately in order to avoid a huge tax bill. Many retirees overlook this.
Other Considerations
State taxes may be something to keep in mind, but it’s not your only consideration. Some other things to take into account include:
- Your and your family’s desires
- Job and career opportunities
- Educational opportunities
- Cost of living including housing costs
- Veteran population
- Percentage of population aged 60 and over
- Community well-being score
- Healthcare score
If you plan to get a job or start a second career, or further your education with the help of VA education benefits, then you’ll want to consider areas with good career prospects or proximity to schools offering the programs you’re interested in. If your children are still in school, you’ll want to consider the quality of the schools in the area.
Cost of living is always a factor. How much will you need to pay to buy or rent in the area, can you get a suitable home that fits your budget, and how much will you need to spend on food, utilities, and entertainment?
A substantial veteran population is positive because it usually means the state has incentive to offer benefits to veterans. Florida, for instance, has the third-largest population of veterans in the country and offers a number of special benefits to veterans like homestead tax exemptions, education and tuition assistance, and state employment preferences. Similarly, a large population of adults aged 60 and over helps ensure the area caters to the needs and interests of older adults.
If you live near a military base, living in military housing may be an option. Some bases offer housing to local retirees if there is an excess of housing beyond what the active-duty population needs. Several cities also have senior living communities specifically for retired military people.
Healthcare score may be important, depending on your situation. Are there quality healthcare facilities and physicians in the area? How about VA hospitals or treatment facilities? As we get older, most of us have increasing need for healthcare.
Community well-being is also crucial. Is the area prospering or on the decline? Are people moving into the area or is there a net outflow of people? How are the public facilities, such as parks, recreation centers, and golf courses? How are the crime rates? You will probably appreciate being safe outdoors and being able to enjoy the amenities the location has to offer.
There are many websites that can show you the “best” and “worst” states or locations for military retirees. But one person’s meat is another’s poison, as the saying goes. What might be an ideal location for someone else might make you miserable, or vice versa. Ultimately, it’s a personal decision.
Popular Places for Military Retirees
Some military retirees know exactly where they want to live, and head straight there when they leave the military. For many others, however, the choice isn’t quite so obvious. If you’re having difficulty deciding where to make your next home, here are some suggestions to get started.
Your (Or Your Spouse’s) Home Town
Many retirees want to return to their roots and go to the place where they grew up. There’s a special attachment to our childhood home. It’s why even people who can afford to live anywhere, choose to stay close to where they were born.
But if your original home town doesn’t hold that kind of appeal, or you moved a lot when you were growing up and don’t really have a home town, then you might consider these other choices.
Your Last Assignment
Your last duty station in the military was probably at or close to a military base, so it may be a military-friendly town with a substantial veteran population and plentiful jobs. You may have some close friends and community connections from living there, or you may simply like the location. With a large veteran population, there may be a VA hospital and veterans support systems to provide for the needs of military retirees.
San Antonio, TX
San Antonio is well-known for its military-friendly atmosphere, with multiple military installations, the Air Force’s flagship hospital, Brooke Army Medical Center, and a large VA medical center. Home to Lackland AFB, Randolph AFB, and Fort Sam Houston, there is a large active-duty and veteran population and many veteran-owned businesses. Texas also has no state income tax, many amenities for veterans, and an affordable cost of living.
Norfolk, VA
Like San Antonio, Norfolk also has several major military bases, a VA hospital, and a large active-duty and military retiree population. If you’re looking for a job, there are many government and defense contractor positions that value military skills. Several major colleges and universities enable you to further your education. Although Virginia doesn’t fully exempt military retired pay, the cost of living is more affordable than some other parts of the state, especially near the Washington, D.C. area.
San Diego, CA
San Diego has some of the best weather in the country and five military bases, with Camp Pendleton just one hour north. While the living cost is high, San Diego is very veteran-friendly and hosts numerous military organizations and charities. There are many natural attractions and the retiree population is almost three times as large as active-duty.
Pensacola, FL
With a great climate, no state income tax, and many military installations, Florida is one of the top living destinations for military retirees. The Florida panhandle has the most military bases in the state, with six located on the Gulf Coast. Pensacola also has a Naval hospital and three VA treatment facilities, as well as several colleges.
Tacoma, WA
Located just south of Seattle, Tacoma is home to increasing numbers of veterans because of the lack of state income tax and the five military bases and 11 VA healthcare facilities close by in the Pacific Northwest. Although the housing cost in Tacoma is lower than in Seattle, it’s still expensive and there are relatively few job opportunities for veterans and veteran-owned businesses.
Manchester, NH
Although New England isn’t known as a particularly military-friendly area, New Hampshire is ranked the sixth-best state for military retirees. Manchester has a high number of defense contracts, low unemployment rate, no state tax on military retired pay, affordable housing, and low sales tax rate. The state also offers benefits to veterans including tax credits and exemptions for veterans and spouses, veterans education benefits, and veterans employment benefits.
Madison, WI
Madison appears on several lists of the best cities for military retirees because of the strong job market for veterans, beautiful scenery, friendly people, low crime rate, cultural and recreational options, and good healthcare. Also, the state doesn’t tax military retired pay.
Sioux Falls, SD
South Dakota ranks among the best states for military retirees based on access to recreational opportunities, VA facilities, cost of living and housing, and no state tax on military retired pay. Sioux Falls has been ranked the third-best city in the nation for military retirees for its low taxes on older residents and high number of VA benefits offices relative to veteran population.
Boise, ID
A study ranked Boise the best among 200 large cities for military veterans to retire in. Boise has the 15th-highest percentage of population comprised of veterans aged 65 and over. It also has the third-lowest unemployment rate and the 15th-lowest percentage of veterans below the poverty line. It also has a high number of retirement communities.
Oklahoma City, OK
Oklahoma City has a stable economy, low cost of housing, and several major military installations including Tinker AFB, Fort Sill, and Altus and Vance AFB, making it attractive for military retirees. It is home to over 300,000 veterans, some of whom have one of the many civil service jobs in the area. Oklahoma has one of the highest percentages of businesses owned by veterans and also among the highest number of VA healthcare facilities, favorable job prospects for veterans, affordable housing, and tax benefits for military retirees.
You can view the state benefits available to you in each state and U.S. territory at MyArmyBenefits.com.
Military OneSource provides an online information resource for states and neighborhoods in the U.S.
For state information: At the bottom of the page, under “Looking for state resources?” click the button labeled “View State Resources.” This brings up a list of states. Click on a state name, then click the box titled “State & Federal Resources.” This brings you to a page showing resources and information that are available to military families and veterans in the state.
For neighborhood information: At the bottom of the page, under “Resources in your neighborhood” click the button labeled “Access the Neighborhood Navigator.” This bring you to a page where you can enter an address, city, or zip code and learn more about that area.
View this video for more ideas: