How to Buy a House as an Enlisted Service Member
The Best States For Military Retirement
Military retirees look for many different things when settling down. These states have more of those things than any others.
When most people hear “retiree” they probably think “old.” Right? Honestly, a person retires when they can’t work any more. Setting aside folks who have medical crises as a result of work, who often retire, the vast majority of retirees are people in their 60s or 70s — or even older, in the case of the U.S. presidency.
Not so, not so, with military retirees. The 17 year old who enlists with a waiver from their parents can retire as an E-7 or E-8 at 37 — barely even middle-aged. The 18-year-old who matriculates at a service academy may be retiring from the military as 38-year-old O-5.
Military retirees have different professional, financial, and medical concerns than many other retirees. For this reason, it’s worth taking a specific look at the states that best provide for their needs. Wallethub has a more methodological approach to ranking states, and one can see the conclusions they reached, though it is not our conclusion.
Things are always changing at the federal and state level, so this is a snapshot of the world as it is. Five years from now, things could be different.
#1: Connecticut
Here are the traditional dings against The Constitution State: cold, high property taxes and state income taxes, difficult to learn how to spell, and filled with snooty people from Connecticut. Once you look past the stereotypes, though, there’s a lot to like, especially if you are a retired veteran of the military. Military retirement benefits are exempt from state taxes. There is a bill being argued before the state legislature that could supercharge a Civil War-era property-tax exemption for veterans (and especially wounded veterans). The state is full of large veteran-friendly employers including Sikorsky, Pratt & Whitney, and Electric Boat. And for people with service-connected disabilities or mental health trauma incurred during service the West Haven Veterans Affairs Medical Clinic (VAMC) is the best in the nation when it comes to cutting edge PTSD therapy, as well as many other basic services. If you don’t mind cold winters (thanks to recent climate change, these haven’t been as cold as in the past), Connecticut is a wonderful place to spend one’s retirement, or to start a second career after one’s service.
#2: Massachusetts
Similar to Connecticut, Massachusetts likely has a reputation as being “blue” and “progressive” so therefore hostile to veterans. Folks, nothing could be further from the truth. Colder than CT, MA offers many of its smaller southern neighbor’s benefits, including some of the best VA hospitals in the world, a very healthy veteran-friendly business sector for folks looking to move into their next career (especially near Boston and Cambridge), and the retirement benefit is exempt from state taxes. If one enjoys exploring the past, Massachusetts has heaps of Revolutionary War era history that has been scrupulously preserved. Not only is it underrated as a destination for veterans, it’s underrated generally.
#3: California
Now we’re talking. Yeah! Cali, awesome beaches, good food, amazing wine… retirement, baby. While the economic environment in California might not be the best, it has plenty of military and military-adjacent businesses if one is looking to move on to a second career. And when evaluating states, it’s important to keep in mind that being a veteran gives one a slight competitive advantage against others for hiring. The VAs are overall quite good, with those in Palo Alto, San Diego, and Los Angeles being particularly noteworthy.
There’s one important drawback with California: and no, it’s not the traffic and self-involved neighbors. California has a state tax rate of 7.25%, and district rates can bump that up by up to another full percent. Unlike the other two states mentioned before, military retirement benefits are taxed in California. But hey — you’re retired in California. Living the dream!
#4: South Carolina
Pound for pound one of the best states for military veteran retirees, South Carolina has highly-rated VA hospitals for wounded veterans requiring specialty treatment, a good environment for hiring, pleasant climate, and cheap land (some of the cheapest and lowest-taxed in the country). The two minor drawbacks to living as a veteran in SC are that retirement benefits are taxed slightly, which is annoying, and the state does suffer from not-infrequent weather disasters such as hurricanes. There’s cold weather and snow, and then there’s a giant windstorm that can kill you. Just something to keep in mind.
Honorable Mentions: Florida, Virginia, Michigan, New York
People will disagree about which state is better than others, so let’s just acknowledge here that the best state really depends on you, the veteran. If you want to go into finance in your thirties, you should move to New York City. Obsessed with the federal government? Get to Washington, D.C., and to hell with the lousy health care and sky-high prices for real estate. Don’t let reality get in the way of your dreams.
Having said that, if you don’t have a specific dream, reality’s all there is. Florida has above-average health care, but not the best — and climate change is wreaking havoc on homeowners and their requirements to carry insurance. Saving $600 a year in state taxes because you live in Florida and not California, only to pay $600 carrying state-mandated flood insurance isn’t really saving money at all. Then, you have the floods and the hurricanes themselves (though these days, depending on where you are in California, that’s not a guarantee either).
All the states above have something extraordinary to recommend them to veterans thinking to retire there, as well as something extraordinary recommending against veterans retiring there, in the absence of some compelling reason such as family or career. But that shouldn’t stop you from going there, if that’s what you really want.
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