Military families are accustomed to moving, but when it comes time to retire, it can be difficult to decide where to put down roots. For example, veterans must consider state tax policies on military benefits, along with the relative friendliness of different job markets and other socioeconomic factors, when choosing a state in which to settle down. Many retirees also face major struggles including Posttraumatic Stress Disorder, disability and homelessness.
To help ease the burden on our nation’s military community, WalletHub compared the 50 states and the District of Columbia based on their ability to provide a comfortable military retirement. Our analysis uses a data set of 28 key metrics, ranging from veterans per capita to the number of VA health facilities to job opportunities for veterans.
Cassandra Happe, WalletHub Analyst
Main Findings
Best States for Military Retirees
Overall Rank | State | Total Score | Economic Environment Rank | Quality of Life Rank | Health Care Rank |
---|---|---|---|---|---|
1 | South Carolina | 63.82 | 5 | 3 | 9 |
2 | Florida | 59.80 | 11 | 4 | 18 |
3 | Virginia | 59.36 | 10 | 5 | 19 |
4 | Maryland | 58.58 | 17 | 1 | 32 |
5 | North Dakota | 58.10 | 2 | 26 | 13 |
6 | Minnesota | 57.98 | 27 | 35 | 2 |
7 | Alaska | 57.97 | 8 | 6 | 28 |
8 | Connecticut | 57.83 | 43 | 20 | 1 |
9 | New Hampshire | 57.13 | 23 | 10 | 11 |
10 | South Dakota | 56.18 | 14 | 27 | 10 |
11 | North Carolina | 56.04 | 7 | 15 | 21 |
12 | Pennsylvania | 55.63 | 31 | 36 | 4 |
13 | Wyoming | 55.31 | 6 | 2 | 47 |
14 | Alabama | 55.29 | 3 | 16 | 38 |
15 | Michigan | 54.33 | 16 | 41 | 7 |
16 | Massachusetts | 54.19 | 15 | 49 | 5 |
17 | Ohio | 54.02 | 26 | 42 | 6 |
18 | Arizona | 53.69 | 12 | 9 | 41 |
19 | Oklahoma | 53.67 | 9 | 7 | 44 |
20 | Wisconsin | 53.57 | 30 | 28 | 8 |
21 | West Virginia | 53.34 | 4 | 40 | 29 |
22 | Maine | 52.86 | 19 | 25 | 24 |
23 | Montana | 52.31 | 25 | 23 | 17 |
24 | Arkansas | 52.26 | 20 | 30 | 22 |
25 | Kansas | 51.95 | 40 | 17 | 15 |
26 | Utah | 51.87 | 1 | 37 | 45 |
27 | Louisiana | 51.52 | 28 | 19 | 26 |
28 | Texas | 51.22 | 13 | 34 | 34 |
29 | Hawaii | 51.21 | 41 | 12 | 30 |
30 | Missouri | 51.16 | 35 | 21 | 20 |
31 | Kentucky | 51.12 | 34 | 38 | 12 |
32 | Idaho | 51.09 | 37 | 14 | 27 |
33 | Illinois | 49.62 | 38 | 39 | 14 |
34 | Georgia | 49.30 | 21 | 18 | 43 |
35 | Delaware | 49.04 | 49 | 11 | 23 |
36 | Indiana | 48.83 | 24 | 43 | 31 |
37 | New York | 48.60 | 50 | 47 | 3 |
38 | New Jersey | 48.33 | 44 | 13 | 33 |
39 | Nebraska | 48.19 | 46 | 22 | 25 |
40 | Rhode Island | 48.03 | 18 | 46 | 36 |
41 | California | 47.80 | 51 | 8 | 16 |
42 | Colorado | 47.44 | 42 | 24 | 37 |
43 | Iowa | 46.26 | 33 | 33 | 40 |
44 | Tennessee | 45.36 | 22 | 48 | 39 |
45 | Mississippi | 43.46 | 39 | 32 | 49 |
46 | Washington | 43.39 | 36 | 31 | 51 |
47 | Nevada | 42.98 | 29 | 45 | 48 |
48 | District of Columbia | 41.76 | 32 | 50 | 46 |
49 | Vermont | 41.24 | 47 | 44 | 42 |
50 | New Mexico | 40.66 | 48 | 29 | 50 |
51 | Oregon | 37.26 | 45 | 51 | 35 |
Note: With the exception of “Total Score,” all of the columns in the table above depict the relative rank of that state, where a rank of 1 represents the best conditions for that metric category.
- Most
- 1. Alaska
- 2. Maine
- 3. Virginia
- 4. Montana
- 5. Wyoming
- Fewest
- 47. Massachusetts
- 48. California
- 49. Utah
- 50. New York
- 51. New Jersey
- Most
- 1. New York
- 2. California
- 3. Wyoming
- 4. Montana
- 5. Texas
- Fewest
- 47. Washington
- 48. South Carolina
- 49. District of Columbia
- 50. Delaware
- 51. Rhode Island
- Lowest
- 1. Mississippi
- 2. North Dakota
- 3. Virginia
- 4. Iowa
- 5. West Virginia
- Highest
- 47. Washington
- T-48. Nevada
- T-48. Oregon
- T-48. California
- T-48. District of Columbia
- Most
- 1. Connecticut
- 2. District of Columbia
- 3. North Dakota
- 4. Oklahoma
- 5. Alabama
- Fewest
- 47. Tennessee
- 48. Maine
- 49. Nevada
- 50. Delaware
- 51. New Mexico
- Most
- 1. Iowa
- 2. North Dakota
- 3. Nebraska
- 4. Kansas
- 5. Ohio
- Least
- 47. Florida
- 48. District of Columbia
- 49. New York
- 50. Hawaii
- 51. California
- Highest
- 1. West Virginia
- 2. Virginia
- 3. Alabama
- 4. South Carolina
- 5. New Hampshire
- Lowest
- 47. Illinois
- 48. Michigan
- 49. New Jersey
- 50. New York
- 51. District of Columbia
In-Depth Look at the Best States for Military Retirees
South Carolina
South Carolina is the best state for military retirees, in part because it has many policies in place to help veterans. The state allows businesses to give preferential hiring to veterans, offers academic credit for military service, and has veteran treatment courts, which give services like treatment and mentoring to veterans in the criminal justice system. South Carolina doesn’t tax military pensions, either.
The Palmetto State has the fourth-best VA hospitals in the country, and the third-most hospitals per capita, which can help ensure that military retirees stay healthy. In addition, South Carolina has the seventh-most veterans per capita and the fourth-most veteran-owned businesses per capita, which indicates that military retirees have good social and business opportunities.
Finally, South Carolina has the sixth-best job growth rate in the country, so veterans may find it easy to get work after their service if they choose to.
Florida
Florida is the second-best state for military retirees, in part because it has a large number of VA health facilities and VA Benefits Administration facilities per capita. The state is also a great place for veterans to continue their education after their military service is done, as Florida has the fifth-best colleges and universities in the country, and it gives academic credit for military service.
The Sunshine State is a good place for military retirees’ finances, too. Florida does not tax military pensions, and it has the ninth-lowest tax rates overall. It also has the fourth-best average annual job growth rate.
To top things off, Florida allows employers to give preference to veterans when hiring and has veteran treatment courts.
Virginia
Virginia is the third-best state for military retirees, and it boasts the second-highest share of veteran-owned businesses, at over 8%. This is partly due to the fact that veterans make up over 8% of the population in general, the third-highest share in the country. In addition, Virginia has the third-greatest amount of funding contracts from the Department of Defense per capita.
Old Dominion takes care of its military retirees, too. It has the third-lowest veteran homelessness rate in the country, at just 0.05%, along with the tenth-lowest veteran suicide rate. Virginia also has the fourth-most mental health counselors per capita, which makes it easier for struggling veterans to find someone to help them.
Finally, Virginia has a number of policies in place to help veterans, such as programs that help them transition from the military back to civilian life. Virginia also allows veterans to be preferred in hiring, has veteran treatment courts and provides academic credit for military service.
Blue States vs. Red States
Ask the Experts
Members of the armed forces deserve a comfortable retirement in exchange for their brave sacrifices. But it’s not easy to readjust to civilian life. For insight and advice on overcoming challenges faced by veteran retirees, we asked a panel of experts to share their thoughts on the following key questions:
- Should veterans have to pay taxes on retirement pay?
- What should veterans consider in choosing where to retire?
- What are the best economic opportunities for retired military personnel looking for a new career?
- How can the VA health care system be improved to better serve veterans and their families?
- How should the government help the military community?
Ask the Experts
Methodology
In order to determine the best and worst states for military retirement, WalletHub compared the 50 states and the District of Columbia across three key dimensions: 1) Economic Environment, 2) Quality of Life and 3) Health Care.
We evaluated those dimensions using 28 relevant metrics, which are listed below with their corresponding weights. Each metric was graded on a 100-point scale, with a score of 100 representing the most favorable conditions for military retirees. For metrics marked with an asterisk (*), we measured the “number of veterans” by the square root of the veteran population in order to avoid overcompensating for small differences among states, considering Veterans Administration (VA) facilities have not increased proportionally with the number of veterans.
We then determined each state and the District’s weighted average across all metrics to calculate its overall score and used the resulting scores to rank-order our sample.
Economic Environment – Total Points: 33.33
- State Tax on Military Pension: Quadruple Weight (~6.35 Points)
- Tax-Friendliness: Double Weight (~3.17 Points)
Note: This metric is based on WalletHub’s “Tax Rates by State” report. - Share of Veteran-Owned Businesses: Full Weight (~1.59 Points)
- Dollars in Defense Department Contracts per Capita: Full Weight (~1.59 Points)
- Job Opportunities for Veterans: Triple Weight (~4.76 Points)
- State Authorization for Veterans’ Preference in Private Hiring: Full Weight (~1.59 Points)
Note: This binary metric considers the presence or absence of a state statute authorizing private employers to implement a veteran-employment preference without vulnerability to claims of discrimination. - Job Growth (2023 vs. 2022): Double Weight (~3.17 Points)
- Military Bases & Installations per 100,000 Veterans: Full Weight (~1.59 Points)
- Total VA Expenditure per Number of Veterans: Full Weight (~1.59 Points)
- Presence of State Help for Returning Veterans: Full Weight (~1.59 Points)
Note: This binary metric considers the presence or absence of veteran transition programs & commissions in a state. - Presence of Academic Credit for Military Service: Full Weight (~1.59 Points)
Note: This binary metric considers the presence or absence of state legislation recognizing the varied skills and knowledge veterans acquire by counting it toward college credit. - Housing Affordability: Double Weight (~3.17 Points)
- Cost-of-Living Index: Full Weight (~1.59 Points)
Quality of Life – Total Points: 33.33
- Share of Veterans: Full Weight (~3.17 Points)
- Share of Veterans Not Receiving SNAP: Full Weight (~3.17 Points)
- Share of VA Benefits-Administration Facilities per Number of Veterans*: Double Weight (~6.35 Points)
- Quality of Public University System: Full Weight (~3.17 Points)
Note: This metric is based on WalletHub “College & University Rankings.” - Arts, Entertainment & Recreation Establishments per Capita: Half Weight (~1.59 Points)
- Share of Population Aged 40 & Older: Full Weight (~3.17 Points)
- Share of Homeless Veterans: Double Weight (~6.35 Points)
- Idealness of Weather: Double Weight (~6.35 Points)
Note: This metric is based on WalletHub’s “Cities with the Best & Worst Weather” ranking.
Health Care – Total Points: 33.33
- Number of VA Health Facilities per Number of Veterans*: Full Weight (~3.70 Points)
- Federal, State, Local & Private Hospitals per Capita: Full Weight (~3.70 Points)
- Quality of VA Hospitals: Triple Weight (~11.11 Points)
Note: This metric includes VA hospital performance star rating from the U.S. Department of Veterans Affairs’ “Strategic Analytics for Improvement and Learning” (SAIL) performance improvement tool. - Physicians per Capita: Full Weight (~3.70 Points)
- Mental Health Counselors per Capita: Full Weight (~3.70 Points)
- Veteran Suicide Rate: Full Weight (~3.70 Points)
- Presence of Veteran-Treatment Courts: Full Weight (~3.70 Points)
Note: This binary metric considers the presence or absence of veteran-treatment courts, programs that provide treatment and mentoring services to veterans with mental-health and substance-abuse problems in order to keep them out of the criminal justice system and help stabilize their lives.
Sources: Data used to create this ranking were collected as of April 22, 2024 from the U.S. Census Bureau, Bureau of Labor Statistics, Military Officers Association of America, Military OneSource, USAspending.gov, U.S. Department of Veterans Affairs, National Conference of State Legislatures, Center on Budget and Policy Priorities, Council for Community and Economic Research, U.S. Department of Housing and Urban Development, Indeed and WalletHub research.
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