Best States for Military Retirees 2025: Tax-Free Living and VA Healthcare Access

Where you retire matters. Not just for the weather or being near family, but for how much of your retirement pay you actually keep.

Some states will let you keep every dollar of your military retirement pay. Others will tax it like regular income and take a 5-7% cut every month for the rest of your life.

Over a 30-year retirement, that difference could be $50,000-$100,000+.

Then there's cost of living, VA healthcare access, property taxes, military retiree communities, and whether your spouse can find decent work.

This guide ranks the best states for military retirees based on real financial impact - not just "nice weather and beaches." I'll show you exactly what you'll pay in taxes, what cost of living really looks like, and where VA facilities are actually accessible.

What Makes a State Good for Military Retirees?

Let's be clear about what matters:

1. Tax Treatment of Military Retirement Pay

Some states don't tax it at all. Some tax it fully. This is the biggest financial factor.

2. Cost of Living

A state with no income tax doesn't help if your rent is $3,000/month. We need to look at the full picture.

3. VA Healthcare Access

If you're relying on VA healthcare, you need to be near a VA facility. Rural states with no VA hospitals aren't great, even if taxes are low.

4. Property Tax and Other Taxes

Some states make up for no income tax with brutal property taxes (looking at you, Texas). Others have high sales taxes.

5. Military Retiree Community

Are there jobs for military retirees? Are there other vets around? Do employers understand military experience?

6. Quality of Life Factors

Employment opportunities for spouses, schools, crime rates, climate, and overall livability.

The Top 10 States for Military Retirees (Ranked)

Here are the best states based on overall value for military retirees.

1. Florida

Tax Treatment: No state income tax. Military retirement pay is 100% tax-free.

Why it ranks #1:

Zero income tax (you keep all your retirement pay)
Massive military retiree population (1.5+ million veterans)
Multiple VA facilities (13 VA hospitals, 50+ clinics)
No estate tax or inheritance tax
Homestead exemption reduces property taxes
Warm weather year-round
Major job market (Miami, Tampa, Orlando, Jacksonville)

Cost of Living: Moderate to high

Median home price: $410,000
Average rent (2-bed): $2,100/month
Property tax: ~0.98% (offset by homestead exemption)

VA Healthcare: Excellent

VA hospitals in Miami, Tampa, Orlando, Gainesville, West Palm Beach, Bay Pines, Lake City
50+ community-based outpatient clinics

Military Presence:

MacDill AFB (Tampa)
Eglin AFB (Panhandle)
Pensacola NAS
Jacksonville NAS
Huge military retiree communities in all major cities

Best cities for military retirees:

Jacksonville (large military community, lower cost than Miami/Tampa)
Tampa (jobs, VA hospital, affordability)
Pensacola (military town, lower cost, beaches)

Bottom line: Florida is the top choice for most military retirees. No income tax, warm weather, massive veteran community, and excellent VA access. Cost of living is rising, but you're not paying state income tax to offset it.

2. Texas

Tax Treatment: No state income tax. Military retirement pay is 100% tax-free.

Why it ranks #2:

Zero income tax
Huge military presence (15 major installations)
Strong job market (Austin, Dallas, Houston, San Antonio)
Large veteran population (1.5 million+)
Good VA healthcare access
Affordable compared to coastal states
No estate tax

Cost of Living: Moderate

Median home price: $320,000
Average rent (2-bed): $1,650/month
Property tax: 1.74% (high, but no income tax offsets this)

VA Healthcare: Very good

VA hospitals in Houston, Dallas, San Antonio, El Paso, Temple, Amarillo, Big Spring, Bonham, Kerrville, Waco
30+ outpatient clinics

Military Presence:

Fort Cavazos (formerly Fort Hood)
Fort Bliss (El Paso)
Joint Base San Antonio (Lackland, Randolph, Fort Sam Houston)
Naval Air Station Corpus Christi
Dyess AFB (Abilene)
Massive military contractor presence

Best cities for military retirees:

San Antonio (military city USA, affordable, great VA hospital)
Austin (jobs, culture, but expensive)
El Paso (affordable, military community)

Downside: Property taxes are high (1.74% average). On a $300,000 home, that's $5,220/year. But no income tax balances this out.

Bottom line: Texas is great for retirees who want no income tax, strong job market, and military community. Property taxes are high, but overall cost of living is reasonable outside of Austin.

3. Virginia

Tax Treatment: Military retirement pay is 100% exempt from state income tax (for retirees age 55+ as of 2025 updates).

Why it ranks #3:

Military retirement pay fully exempt from state taxes
Massive military presence (largest concentration of military installations in the US)
Excellent VA healthcare (Hampton VA is one of the best)
Strong job market, especially for defense contractors
Close to DC (federal job opportunities)
Military-friendly culture

Cost of Living: Moderate to high (varies widely by region)

Median home price: $380,000
Average rent (2-bed): $1,800/month
Property tax: ~0.80%

VA Healthcare: Excellent

VA hospitals in Richmond, Hampton, Salem
Multiple community clinics
Close proximity to Walter Reed (DC) and other top facilities

Military Presence:

Norfolk Naval Station (largest naval base in the world)
Joint Base Langley-Eustis
Quantico Marine Base
Fort Gregg-Adams (formerly Fort Lee)
Pentagon (nearby in DC)

Best cities for military retirees:

Virginia Beach/Hampton Roads (huge military retiree community, beaches, VA hospital)
Richmond (lower cost than NoVA, good VA hospital, jobs)
Roanoke/Salem (affordable, VA hospital, lower cost of living)

Downside: Northern Virginia (NoVA) is very expensive. Stick to Hampton Roads, Richmond, or Southwest Virginia for affordability.

Bottom line: Virginia is perfect if you want defense contractor work, strong military community, and excellent VA care. Avoid NoVA unless you're making six figures.

4. North Carolina

Tax Treatment: Military retirement pay is 100% exempt from state income tax (as of 2021).

Why it ranks #4:

Military retirement pay fully tax-exempt
Large military presence (Fort Liberty/Bragg, Camp Lejeune, multiple bases)
Affordable cost of living
Good VA healthcare access
Growing job market (Charlotte, Raleigh)
Mild climate (not too hot, not too cold)

Cost of Living: Moderate

Median home price: $340,000
Average rent (2-bed): $1,500/month
Property tax: ~0.77%

VA Healthcare: Good

VA hospitals in Durham, Salisbury, Fayetteville, Asheville
Multiple outpatient clinics

Military Presence:

Fort Liberty (formerly Fort Bragg) - largest military base by population
Camp Lejeune (Marine base)
Fort Bragg military retiree community is huge

Best cities for military retirees:

Fayetteville (military town, affordable, large veteran community)
Raleigh/Durham (jobs, VA hospital, growing tech scene)
Wilmington (coastal, affordable, military-friendly)

Bottom line: North Carolina offers tax-free military retirement pay, affordable living, and strong military communities. Great choice if you want four seasons without brutal winters.

5. Tennessee

Tax Treatment: No state income tax. Military retirement pay is 100% tax-free.

Why it ranks #5:

Zero income tax
Affordable cost of living (outside of Nashville)
Growing job market
No estate or inheritance tax
Decent VA healthcare
Mild climate

Cost of Living: Low to moderate

Median home price: $310,000
Average rent (2-bed): $1,400/month
Property tax: ~0.71%

VA Healthcare: Good

VA hospitals in Nashville, Memphis, Mountain Home (Johnson City)
Outpatient clinics throughout the state

Military Presence:

Naval Support Activity Mid-South (Millington)
Arnold Air Force Base
Large veteran population despite fewer active installations

Best cities for military retirees:

Nashville (jobs, VA hospital, but expensive and growing fast)
Knoxville (affordable, access to VA in Johnson City)
Clarksville (near Fort Campbell, military community)

Bottom line: Tennessee is great for retirees who want no income tax and affordable living. Not as much military presence as other states, but solid overall value.

6. Nevada

Tax Treatment: No state income tax. Military retirement pay is 100% tax-free.

Why it ranks #6:

Zero income tax
No estate or inheritance tax
Nellis AFB provides military community
Good VA healthcare in Las Vegas
Outdoor recreation opportunities

Cost of Living: Moderate

Median home price: $425,000 (Las Vegas area)
Average rent (2-bed): $1,650/month
Property tax: ~0.60%

VA Healthcare: Good in urban areas

VA hospitals in Reno and Las Vegas
Limited rural access

Military Presence:

Nellis AFB (Las Vegas)
Fallon Naval Air Station
Large veteran population in Las Vegas

Best cities for military retirees:

Las Vegas (VA hospital, jobs, entertainment, but hot summers)
Reno (outdoor recreation, milder climate, VA hospital)

Downside: Very hot summers in Las Vegas. Limited rural healthcare access.

Bottom line: Nevada is solid if you like the desert, no income tax, and access to Vegas or Reno. Not ideal if you hate heat or want rural living.

7. Washington

Tax Treatment: No state income tax. Military retirement pay is 100% tax-free.

Why it ranks #7:

Zero income tax
Strong military presence (Joint Base Lewis-McChord)
Excellent VA healthcare
Beautiful scenery (mountains, ocean, forests)
Strong job market (Seattle, tech industry)

Cost of Living: High

Median home price: $560,000
Average rent (2-bed): $2,200/month
Property tax: ~0.93%
High sales tax (8-10%)

VA Healthcare: Excellent

VA hospitals in Seattle, Spokane, Walla Walla
Multiple clinics throughout the state

Military Presence:

Joint Base Lewis-McChord (JBLM)
Naval Base Kitsap
Naval Air Station Whidbey Island
Large defense contractor presence (Boeing)

Best cities for military retirees:

Tacoma/Lakewood (near JBLM, military community, more affordable than Seattle)
Spokane (lower cost, VA hospital, four seasons)

Downside: High cost of living, especially near Seattle. Rain and gray weather 6+ months per year.

Bottom line: Washington is great if you want no income tax, strong job market, and military community. But you'll pay for it in housing costs.

8. Alaska

Tax Treatment: No state income tax. Military retirement pay is 100% tax-free.

Why it ranks #8:

Zero income tax
Permanent Fund Dividend (PFD) pays residents $1,000-$2,000/year just for living there
Excellent VA healthcare in Anchorage
Strong military community
Outdoor recreation (if you love nature)

Cost of Living: High (due to remote location)

Median home price: $380,000
Average rent (2-bed): $1,600/month
Groceries and goods are 30-50% more expensive (shipping costs)
Heating costs are high

VA Healthcare: Good in Anchorage, limited elsewhere

VA hospital in Anchorage
Limited rural access

Military Presence:

Joint Base Elmendorf-Richardson (Anchorage)
Fort Wainwright (Fairbanks)
Strong military retiree community

Best cities for military retirees:

Anchorage (VA hospital, jobs, milder Alaska climate)
Fairbanks (military community, but harsh winters)

Downside: Harsh winters, isolation, high cost of goods, limited healthcare access outside Anchorage.

Bottom line: Alaska is for those who truly love the outdoors and don't mind cold, dark winters. The PFD and no income tax are nice, but cost of living offsets those benefits.

9. South Dakota

Tax Treatment: No state income tax. Military retirement pay is 100% tax-free.

Why it ranks #9:

Zero income tax
Very low cost of living
Low property taxes
No estate or inheritance tax
Friendly people, small-town feel

Cost of Living: Very low

Median home price: $280,000
Average rent (2-bed): $1,100/month
Property tax: ~1.22%

VA Healthcare: Limited

VA hospitals in Fort Meade, Hot Springs, Sioux Falls
Limited specialty care

Military Presence:

Ellsworth Air Force Base (Rapid City)
Smaller veteran population

Best cities for military retirees:

Sioux Falls (largest city, VA healthcare, jobs)
Rapid City (near Ellsworth AFB, outdoor recreation)

Downside: Harsh winters, limited healthcare options, smaller job market, rural isolation.

Bottom line: South Dakota is ideal for retirees who want ultra-low cost of living and no income tax. Not great if you need specialized VA care or want urban amenities.

10. Wyoming

Tax Treatment: No state income tax. Military retirement pay is 100% tax-free.

Why it ranks #10:

Zero income tax
Lowest population density (wide open spaces)
Very low crime rates
Low property taxes
No estate or inheritance tax
Beautiful natural scenery

Cost of Living: Low to moderate

Median home price: $320,000
Average rent (2-bed): $1,300/month
Property tax: ~0.61%

VA Healthcare: Limited

VA hospitals in Cheyenne and Sheridan
Must travel to Denver or other states for specialty care

Military Presence:

F.E. Warren Air Force Base (Cheyenne)
Small veteran population

Best cities for military retirees:

Cheyenne (capital, VA hospital, near Colorado)
Casper (central location, affordable)

Downside: Extreme isolation, brutal winters, very limited healthcare, small job market.

Bottom line: Wyoming is for those who want to disappear into the wilderness with no taxes. Not practical for most retirees due to limited healthcare and isolation.

States to Avoid for Military Retirees

These states tax military retirement pay heavily and/or have poor overall value:

California

Taxes military retirement pay: Yes, up to 13.3% (highest in the nation)
Cost of living: Extremely high
Verdict: Unless you have a high-paying job or family ties, avoid. You'll lose 13% of your retirement pay to taxes plus brutal housing costs.

Vermont

Taxes military retirement pay: Yes, up to 8.75%
Cost of living: High
Limited VA access: Few VA facilities
Verdict: Beautiful state, but you'll pay for it. Not recommended unless you love skiing.

Rhode Island

Taxes military retirement pay: Partial exemption, but still taxed
Cost of living: Very high
Verdict: Small state, high costs, limited military community. Skip it.

Minnesota

Taxes military retirement pay: Partial exemption, still taxed
Harsh winters
Verdict: Better than California, but cold and expensive.

Comparison Table: Tax Treatment by State

State	Military Retirement Tax	State Income Tax	Property Tax Avg	Sales Tax Avg
Florida	0% (no income tax)	None	0.98%	6.5%
Texas	0% (no income tax)	None	1.74%	8.2%
Virginia	0% (exempt)	2-5.75%	0.80%	5.3%
North Carolina	0% (exempt)	4.5%	0.77%	6.9%
Tennessee	0% (no income tax)	None	0.71%	9.5%
Nevada	0% (no income tax)	None	0.60%	8.2%
Washington	0% (no income tax)	None	0.93%	9.3%
Alaska	0% (no income tax)	None	1.19%	1.4%
South Dakota	0% (no income tax)	None	1.22%	6.4%
Wyoming	0% (no income tax)	None	0.61%	5.4%
California	Fully taxed (up to 13.3%)	1-13.3%	0.76%	8.8%

Real Cost Comparison: E7 Retiring After 20 Years

Let's compare what an E7 retiree with $2,500/month retirement pay would actually take home in different states.

Assumptions:

Military retirement pay: $2,500/month ($30,000/year)
VA disability: $1,500/month (separate, not taxed by any state)
Home value: $300,000
Sales tax spending: $20,000/year

Florida

Military retirement after state tax: $30,000 (no state tax)
Property tax on $300K home: $2,940/year
Sales tax on $20K spending: $1,300/year
Total annual taxes: $4,240

Texas

Military retirement after state tax: $30,000 (no state tax)
Property tax on $300K home: $5,220/year (high property tax)
Sales tax on $20K spending: $1,640/year
Total annual taxes: $6,860

Virginia

Military retirement after state tax: $30,000 (exempt)
Property tax on $300K home: $2,400/year
Sales tax on $20K spending: $1,060/year
Total annual taxes: $3,460

North Carolina

Military retirement after state tax: $30,000 (exempt)
Property tax on $300K home: $2,310/year
Sales tax on $20K spending: $1,380/year
Total annual taxes: $3,690

California

Military retirement after state tax: $27,000 ($3,000 lost to state income tax at 10% bracket)
Property tax on $300K home: $2,280/year (but homes cost way more than $300K)
Sales tax on $20K spending: $1,760/year
Total annual taxes: $7,040 (including $3,000 income tax)

Winner for lowest taxes: Virginia ($3,460/year) Worst: California ($7,040/year, and that's with an unrealistically cheap home)

Over 30 years of retirement, the difference between Virginia and California is $107,400.

VA Healthcare Access Map

When choosing a state, check proximity to VA facilities:

States with Excellent VA Coverage:

Florida (13 VA hospitals, 50+ clinics)
Texas (10+ VA hospitals, 30+ clinics)
California (8 VA hospitals, many clinics - but not worth the taxes)
Virginia (multiple hospitals including Hampton VA, one of the best)

States with Good VA Coverage:

North Carolina, Tennessee, Washington, Georgia

States with Limited VA Coverage:

Wyoming, South Dakota, Alaska (outside Anchorage), Montana, North Dakota

Check VA facility locations: va.gov/directory

The Bottom Line: Where Should You Retire?

Best overall: Florida

No income tax, warm weather, huge military community, excellent VA access

Best for jobs: Texas, Virginia, North Carolina

Strong job markets, military contractor opportunities, no tax on retirement pay

Best for low cost of living: Tennessee, South Dakota, Wyoming

No income tax, affordable housing, but limited VA access in some areas

Avoid: California, Vermont, Rhode Island

High taxes on retirement pay, high cost of living, not worth it unless family ties demand it

Action steps:

Check the tax treatment in your target state
Map out VA facility locations near where you want to live
Calculate total tax burden (income + property + sales tax)
Visit before you commit - rent for 6 months before buying
Consider spouse employment and family needs

Where you retire will affect your finances for the next 30+ years. Choose wisely, and keep more of your hard-earned retirement pay.

Planning your military transition? Use our Transition Checklist to make sure you handle every step of your separation correctly, including choosing your retirement location.

Best States for Military Retirees 2025: Tax-Free Living and VA Healthcare Access

Where you retire matters. Not just for the weather or being near family, but for how much of your retirement pay you actually keep.

Some states will let you keep every dollar of your military retirement pay. Others will tax it like regular income and take a 5-7% cut every month for the rest of your life.

Over a 30-year retirement, that difference could be $50,000-$100,000+.

Then there's cost of living, VA healthcare access, property taxes, military retiree communities, and whether your spouse can find decent work.

What Makes a State Good for Military Retirees?

Let's be clear about what matters:

1. Tax Treatment of Military Retirement Pay

Some states don't tax it at all. Some tax it fully. This is the biggest financial factor.

2. Cost of Living

A state with no income tax doesn't help if your rent is $3,000/month. We need to look at the full picture.

3. VA Healthcare Access

If you're relying on VA healthcare, you need to be near a VA facility. Rural states with no VA hospitals aren't great, even if taxes are low.

4. Property Tax and Other Taxes

Some states make up for no income tax with brutal property taxes (looking at you, Texas). Others have high sales taxes.

5. Military Retiree Community

Are there jobs for military retirees? Are there other vets around? Do employers understand military experience?

6. Quality of Life Factors

Employment opportunities for spouses, schools, crime rates, climate, and overall livability.

The Top 10 States for Military Retirees (Ranked)

Here are the best states based on overall value for military retirees.

1. Florida

Tax Treatment: No state income tax. Military retirement pay is 100% tax-free.

Why it ranks #1:

Zero income tax (you keep all your retirement pay)
Massive military retiree population (1.5+ million veterans)
Multiple VA facilities (13 VA hospitals, 50+ clinics)
No estate tax or inheritance tax
Homestead exemption reduces property taxes
Warm weather year-round
Major job market (Miami, Tampa, Orlando, Jacksonville)

Cost of Living: Moderate to high

Median home price: $410,000
Average rent (2-bed): $2,100/month
Property tax: ~0.98% (offset by homestead exemption)

VA Healthcare: Excellent

VA hospitals in Miami, Tampa, Orlando, Gainesville, West Palm Beach, Bay Pines, Lake City
50+ community-based outpatient clinics

Military Presence:

MacDill AFB (Tampa)
Eglin AFB (Panhandle)
Pensacola NAS
Jacksonville NAS
Huge military retiree communities in all major cities

Best cities for military retirees:

Jacksonville (large military community, lower cost than Miami/Tampa)
Tampa (jobs, VA hospital, affordability)
Pensacola (military town, lower cost, beaches)

2. Texas

Tax Treatment: No state income tax. Military retirement pay is 100% tax-free.

Why it ranks #2:

Zero income tax
Huge military presence (15 major installations)
Strong job market (Austin, Dallas, Houston, San Antonio)
Large veteran population (1.5 million+)
Good VA healthcare access
Affordable compared to coastal states
No estate tax

Cost of Living: Moderate

Median home price: $320,000
Average rent (2-bed): $1,650/month
Property tax: 1.74% (high, but no income tax offsets this)

VA Healthcare: Very good

VA hospitals in Houston, Dallas, San Antonio, El Paso, Temple, Amarillo, Big Spring, Bonham, Kerrville, Waco
30+ outpatient clinics

Military Presence:

Fort Cavazos (formerly Fort Hood)
Fort Bliss (El Paso)
Joint Base San Antonio (Lackland, Randolph, Fort Sam Houston)
Naval Air Station Corpus Christi
Dyess AFB (Abilene)
Massive military contractor presence

Best cities for military retirees:

San Antonio (military city USA, affordable, great VA hospital)
Austin (jobs, culture, but expensive)
El Paso (affordable, military community)

Downside: Property taxes are high (1.74% average). On a $300,000 home, that's $5,220/year. But no income tax balances this out.

Bottom line: Texas is great for retirees who want no income tax, strong job market, and military community. Property taxes are high, but overall cost of living is reasonable outside of Austin.

3. Virginia

Tax Treatment: Military retirement pay is 100% exempt from state income tax (for retirees age 55+ as of 2025 updates).

Why it ranks #3:

Military retirement pay fully exempt from state taxes
Massive military presence (largest concentration of military installations in the US)
Excellent VA healthcare (Hampton VA is one of the best)
Strong job market, especially for defense contractors
Close to DC (federal job opportunities)
Military-friendly culture

Cost of Living: Moderate to high (varies widely by region)

Median home price: $380,000
Average rent (2-bed): $1,800/month
Property tax: ~0.80%

VA Healthcare: Excellent

VA hospitals in Richmond, Hampton, Salem
Multiple community clinics
Close proximity to Walter Reed (DC) and other top facilities

Military Presence:

Norfolk Naval Station (largest naval base in the world)
Joint Base Langley-Eustis
Quantico Marine Base
Fort Gregg-Adams (formerly Fort Lee)
Pentagon (nearby in DC)

Best cities for military retirees:

Virginia Beach/Hampton Roads (huge military retiree community, beaches, VA hospital)
Richmond (lower cost than NoVA, good VA hospital, jobs)
Roanoke/Salem (affordable, VA hospital, lower cost of living)

Downside: Northern Virginia (NoVA) is very expensive. Stick to Hampton Roads, Richmond, or Southwest Virginia for affordability.

Bottom line: Virginia is perfect if you want defense contractor work, strong military community, and excellent VA care. Avoid NoVA unless you're making six figures.

4. North Carolina

Tax Treatment: Military retirement pay is 100% exempt from state income tax (as of 2021).

Why it ranks #4:

Military retirement pay fully tax-exempt
Large military presence (Fort Liberty/Bragg, Camp Lejeune, multiple bases)
Affordable cost of living
Good VA healthcare access
Growing job market (Charlotte, Raleigh)
Mild climate (not too hot, not too cold)

Cost of Living: Moderate

Median home price: $340,000
Average rent (2-bed): $1,500/month
Property tax: ~0.77%

VA Healthcare: Good

VA hospitals in Durham, Salisbury, Fayetteville, Asheville
Multiple outpatient clinics

Military Presence:

Fort Liberty (formerly Fort Bragg) - largest military base by population
Camp Lejeune (Marine base)
Fort Bragg military retiree community is huge

Best cities for military retirees:

Fayetteville (military town, affordable, large veteran community)
Raleigh/Durham (jobs, VA hospital, growing tech scene)
Wilmington (coastal, affordable, military-friendly)

Bottom line: North Carolina offers tax-free military retirement pay, affordable living, and strong military communities. Great choice if you want four seasons without brutal winters.

5. Tennessee

Tax Treatment: No state income tax. Military retirement pay is 100% tax-free.

Why it ranks #5:

Zero income tax
Affordable cost of living (outside of Nashville)
Growing job market
No estate or inheritance tax
Decent VA healthcare
Mild climate

Cost of Living: Low to moderate

Median home price: $310,000
Average rent (2-bed): $1,400/month
Property tax: ~0.71%

VA Healthcare: Good

VA hospitals in Nashville, Memphis, Mountain Home (Johnson City)
Outpatient clinics throughout the state

Military Presence:

Naval Support Activity Mid-South (Millington)
Arnold Air Force Base
Large veteran population despite fewer active installations

Best cities for military retirees:

Nashville (jobs, VA hospital, but expensive and growing fast)
Knoxville (affordable, access to VA in Johnson City)
Clarksville (near Fort Campbell, military community)

Bottom line: Tennessee is great for retirees who want no income tax and affordable living. Not as much military presence as other states, but solid overall value.

6. Nevada

Tax Treatment: No state income tax. Military retirement pay is 100% tax-free.

Why it ranks #6:

Zero income tax
No estate or inheritance tax
Nellis AFB provides military community
Good VA healthcare in Las Vegas
Outdoor recreation opportunities

Cost of Living: Moderate

Median home price: $425,000 (Las Vegas area)
Average rent (2-bed): $1,650/month
Property tax: ~0.60%

VA Healthcare: Good in urban areas

VA hospitals in Reno and Las Vegas
Limited rural access

Military Presence:

Nellis AFB (Las Vegas)
Fallon Naval Air Station
Large veteran population in Las Vegas

Best cities for military retirees:

Las Vegas (VA hospital, jobs, entertainment, but hot summers)
Reno (outdoor recreation, milder climate, VA hospital)

Downside: Very hot summers in Las Vegas. Limited rural healthcare access.

Bottom line: Nevada is solid if you like the desert, no income tax, and access to Vegas or Reno. Not ideal if you hate heat or want rural living.

7. Washington

Tax Treatment: No state income tax. Military retirement pay is 100% tax-free.

Why it ranks #7:

Zero income tax
Strong military presence (Joint Base Lewis-McChord)
Excellent VA healthcare
Beautiful scenery (mountains, ocean, forests)
Strong job market (Seattle, tech industry)

Cost of Living: High

Median home price: $560,000
Average rent (2-bed): $2,200/month
Property tax: ~0.93%
High sales tax (8-10%)

VA Healthcare: Excellent

VA hospitals in Seattle, Spokane, Walla Walla
Multiple clinics throughout the state

Military Presence:

Joint Base Lewis-McChord (JBLM)
Naval Base Kitsap
Naval Air Station Whidbey Island
Large defense contractor presence (Boeing)

Best cities for military retirees:

Tacoma/Lakewood (near JBLM, military community, more affordable than Seattle)
Spokane (lower cost, VA hospital, four seasons)

Downside: High cost of living, especially near Seattle. Rain and gray weather 6+ months per year.

Bottom line: Washington is great if you want no income tax, strong job market, and military community. But you'll pay for it in housing costs.

8. Alaska

Tax Treatment: No state income tax. Military retirement pay is 100% tax-free.

Why it ranks #8:

Zero income tax
Permanent Fund Dividend (PFD) pays residents $1,000-$2,000/year just for living there
Excellent VA healthcare in Anchorage
Strong military community
Outdoor recreation (if you love nature)

Cost of Living: High (due to remote location)

Median home price: $380,000
Average rent (2-bed): $1,600/month
Groceries and goods are 30-50% more expensive (shipping costs)
Heating costs are high

VA Healthcare: Good in Anchorage, limited elsewhere

VA hospital in Anchorage
Limited rural access

Military Presence:

Joint Base Elmendorf-Richardson (Anchorage)
Fort Wainwright (Fairbanks)
Strong military retiree community

Best cities for military retirees:

Anchorage (VA hospital, jobs, milder Alaska climate)
Fairbanks (military community, but harsh winters)

Downside: Harsh winters, isolation, high cost of goods, limited healthcare access outside Anchorage.

Bottom line: Alaska is for those who truly love the outdoors and don't mind cold, dark winters. The PFD and no income tax are nice, but cost of living offsets those benefits.

9. South Dakota

Tax Treatment: No state income tax. Military retirement pay is 100% tax-free.

Why it ranks #9:

Zero income tax
Very low cost of living
Low property taxes
No estate or inheritance tax
Friendly people, small-town feel

Cost of Living: Very low

Median home price: $280,000
Average rent (2-bed): $1,100/month
Property tax: ~1.22%

VA Healthcare: Limited

VA hospitals in Fort Meade, Hot Springs, Sioux Falls
Limited specialty care

Military Presence:

Ellsworth Air Force Base (Rapid City)
Smaller veteran population

Best cities for military retirees:

Sioux Falls (largest city, VA healthcare, jobs)
Rapid City (near Ellsworth AFB, outdoor recreation)

Downside: Harsh winters, limited healthcare options, smaller job market, rural isolation.

Bottom line: South Dakota is ideal for retirees who want ultra-low cost of living and no income tax. Not great if you need specialized VA care or want urban amenities.

10. Wyoming

Tax Treatment: No state income tax. Military retirement pay is 100% tax-free.

Why it ranks #10:

Zero income tax
Lowest population density (wide open spaces)
Very low crime rates
Low property taxes
No estate or inheritance tax
Beautiful natural scenery

Cost of Living: Low to moderate

Median home price: $320,000
Average rent (2-bed): $1,300/month
Property tax: ~0.61%

VA Healthcare: Limited

VA hospitals in Cheyenne and Sheridan
Must travel to Denver or other states for specialty care

Military Presence:

F.E. Warren Air Force Base (Cheyenne)
Small veteran population

Best cities for military retirees:

Cheyenne (capital, VA hospital, near Colorado)
Casper (central location, affordable)

Downside: Extreme isolation, brutal winters, very limited healthcare, small job market.

Bottom line: Wyoming is for those who want to disappear into the wilderness with no taxes. Not practical for most retirees due to limited healthcare and isolation.

States to Avoid for Military Retirees

These states tax military retirement pay heavily and/or have poor overall value:

California

Taxes military retirement pay: Yes, up to 13.3% (highest in the nation)
Cost of living: Extremely high
Verdict: Unless you have a high-paying job or family ties, avoid. You'll lose 13% of your retirement pay to taxes plus brutal housing costs.

Vermont

Taxes military retirement pay: Yes, up to 8.75%
Cost of living: High
Limited VA access: Few VA facilities
Verdict: Beautiful state, but you'll pay for it. Not recommended unless you love skiing.

Rhode Island

Taxes military retirement pay: Partial exemption, but still taxed
Cost of living: Very high
Verdict: Small state, high costs, limited military community. Skip it.

Minnesota

Taxes military retirement pay: Partial exemption, still taxed
Harsh winters
Verdict: Better than California, but cold and expensive.

Comparison Table: Tax Treatment by State

State	Military Retirement Tax	State Income Tax	Property Tax Avg	Sales Tax Avg
Florida	0% (no income tax)	None	0.98%	6.5%
Texas	0% (no income tax)	None	1.74%	8.2%
Virginia	0% (exempt)	2-5.75%	0.80%	5.3%
North Carolina	0% (exempt)	4.5%	0.77%	6.9%
Tennessee	0% (no income tax)	None	0.71%	9.5%
Nevada	0% (no income tax)	None	0.60%	8.2%
Washington	0% (no income tax)	None	0.93%	9.3%
Alaska	0% (no income tax)	None	1.19%	1.4%
South Dakota	0% (no income tax)	None	1.22%	6.4%
Wyoming	0% (no income tax)	None	0.61%	5.4%
California	Fully taxed (up to 13.3%)	1-13.3%	0.76%	8.8%

Real Cost Comparison: E7 Retiring After 20 Years

Let's compare what an E7 retiree with $2,500/month retirement pay would actually take home in different states.

Assumptions:

Military retirement pay: $2,500/month ($30,000/year)
VA disability: $1,500/month (separate, not taxed by any state)
Home value: $300,000
Sales tax spending: $20,000/year

Florida

Military retirement after state tax: $30,000 (no state tax)
Property tax on $300K home: $2,940/year
Sales tax on $20K spending: $1,300/year
Total annual taxes: $4,240

Texas

Military retirement after state tax: $30,000 (no state tax)
Property tax on $300K home: $5,220/year (high property tax)
Sales tax on $20K spending: $1,640/year
Total annual taxes: $6,860

Virginia

Military retirement after state tax: $30,000 (exempt)
Property tax on $300K home: $2,400/year
Sales tax on $20K spending: $1,060/year
Total annual taxes: $3,460

North Carolina

Military retirement after state tax: $30,000 (exempt)
Property tax on $300K home: $2,310/year
Sales tax on $20K spending: $1,380/year
Total annual taxes: $3,690

California

Military retirement after state tax: $27,000 ($3,000 lost to state income tax at 10% bracket)
Property tax on $300K home: $2,280/year (but homes cost way more than $300K)
Sales tax on $20K spending: $1,760/year
Total annual taxes: $7,040 (including $3,000 income tax)

Winner for lowest taxes: Virginia ($3,460/year) Worst: California ($7,040/year, and that's with an unrealistically cheap home)

Over 30 years of retirement, the difference between Virginia and California is $107,400.

VA Healthcare Access Map

When choosing a state, check proximity to VA facilities:

States with Excellent VA Coverage:

Florida (13 VA hospitals, 50+ clinics)
Texas (10+ VA hospitals, 30+ clinics)
California (8 VA hospitals, many clinics - but not worth the taxes)
Virginia (multiple hospitals including Hampton VA, one of the best)

States with Good VA Coverage:

North Carolina, Tennessee, Washington, Georgia

States with Limited VA Coverage:

Wyoming, South Dakota, Alaska (outside Anchorage), Montana, North Dakota

Check VA facility locations: va.gov/directory

The Bottom Line: Where Should You Retire?

Best overall: Florida

No income tax, warm weather, huge military community, excellent VA access

Best for jobs: Texas, Virginia, North Carolina

Strong job markets, military contractor opportunities, no tax on retirement pay

Best for low cost of living: Tennessee, South Dakota, Wyoming

No income tax, affordable housing, but limited VA access in some areas

Avoid: California, Vermont, Rhode Island

High taxes on retirement pay, high cost of living, not worth it unless family ties demand it

Action steps:

Check the tax treatment in your target state
Map out VA facility locations near where you want to live
Calculate total tax burden (income + property + sales tax)
Visit before you commit - rent for 6 months before buying
Consider spouse employment and family needs

Where you retire will affect your finances for the next 30+ years. Choose wisely, and keep more of your hard-earned retirement pay.

Planning your military transition? Use our Transition Checklist to make sure you handle every step of your separation correctly, including choosing your retirement location.