Choosing where to settle after military service is one of the most consequential financial decisions you will make. The best states for military retirees offer far more than warm weather—they combine tax exemptions on retirement pay, access to military healthcare facilities, veteran property tax relief, and a cost of living that lets your pension stretch further.
That is why identifying the best states for military retirees should be your first step before house hunting, not an afterthought.
According to the U.S. Department of Veterans Affairs, over 2 million military retirees live in the United States, and their distribution is far from even. States compete aggressively for this demographic because military retirees bring stable, recession-resistant income and valuable skills to local economies.
The problem is that generic "best places to retire" lists ignore what actually matters to veterans: Does the state tax my military pension? Are there nearby commissaries and exchanges? What about VA disability property tax exemptions?
This guide breaks down five states that consistently rank among the best states for military retirees, with the specific tax policies and practical factors behind each ranking.
1. Florida: No State Income Tax and Unmatched Veteran Infrastructure
Florida has long been a magnet for military retirees, and it routinely tops any list of the best states for military retirees. The reasons are concrete rather than anecdotal. The state imposes no personal income tax, which means your military pension, Thrift Savings Plan withdrawals, and Social Security benefits all escape state taxation entirely.
Florida also offers a homestead exemption that can reduce the assessed value of a primary residence by up to $50,000. Veterans with a service-connected disability of 10% or higher can qualify for an additional $5,000 exemption, and totally disabled veterans may be fully exempt from property taxes.
The state hosts six major military installations, including Naval Air Station Pensacola, MacDill Air Force Base in Tampa, and Naval Station Mayport near Jacksonville. Each installation operates a commissary, exchange, and medical treatment facility open to retirees.
According to data from the U.S. Census Bureau, Florida's veteran population exceeds 1.4 million, making it one of the largest concentrations of former service members in the country—and a major reason analysts keep ranking it among the best states for military retirees.
How to apply this: Check your eligibility for Florida's disabled veteran property tax exemption through your county property appraiser's office before purchasing a home.
2. Texas: Zero State Income Tax Plus Expanded Property Tax Relief
Texas matches Florida on the headline benefit—no state income tax on any retirement income—but adds a layer of property tax relief that many retirees overlook. For many veterans weighing the best states for military retirees, this combination is the deciding factor.
The state's 100% disabled veteran exemption can eliminate property taxes entirely for qualifying veterans, and surviving spouses may retain the exemption.
Texas also exempts a portion of a home's value from taxation for veterans with a disability rating between 10% and 90%, with the exemption amount scaling based on the rating. The Texas Veterans Commission publishes current exemption thresholds annually.
The state's size means you can choose between the Hill Country around San Antonio, the Gulf Coast near Corpus Christi, or the drier climate of West Texas. San Antonio alone hosts Joint Base San Antonio, which includes Fort Sam Houston, Lackland Air Force Base, and Randolph Air Force Base—a concentration of military medical facilities unmatched in the country.
A common scenario: a retiree with a 70% VA disability rating moving to Texas can combine the partial property tax exemption with the state's no-income-tax policy to reduce their annual tax burden by thousands compared to states like California or Virginia. Few places on any ranking of the best states for military retirees deliver savings this large.
How to apply this: File for your Texas disabled veteran exemption through your county appraisal district using VA Form 20-10209 or your VA disability award letter.
3. Virginia: Strong Proximity to Military Healthcare and Federal Jobs
Virginia does tax military retirement pay, but it offers a deduction of up to $20,000 for retirees aged 55 and older, and the deduction phases in for younger retirees.
While this is less generous than Florida or Texas, Virginia compensates with proximity to some of the best military healthcare facilities in the nation—which keeps it competitive among the best states for military retirees overall.
The Hampton Roads region hosts Naval Medical Center Portsmouth, the oldest continuously operating military hospital in the country, along with Langley Air Force Base, Fort Eustis, and Naval Station Norfolk—the largest naval base in the world. Retirees living within driving distance can access TRICARE Prime at these facilities without long travel.
Virginia also exempts military retirement pay from local property taxes in some jurisdictions, though this varies by county. The state's veteran population exceeds 700,000 according to U.S. Census Bureau data, and the Virginia Department of Veterans Services operates a dedicated retiree assistance program.
The trade-off is a higher cost of living in Northern Virginia, but retirees willing to live in the Richmond or Tidewater areas can find housing at roughly half the cost of the D.C. suburbs while remaining within reach of federal employment opportunities.
How to apply this: Compare TRICARE network availability in your target Virginia county using the TRICARE Plan Finder before committing to a location.
4. Tennessee: No Income Tax on Pensions and Low Overall Tax Burden
Tennessee eliminated its tax on investment income in 2021, making it one of the few states with no state income tax on any form of retirement income, including military pensions, Social Security, and 401(k) or TSP withdrawals. The state also has no tax on earned income.
For budget-conscious veterans comparing the best states for military retirees, Tennessee deserves a close look.
Property taxes in Tennessee are among the lowest in the nation. According to data from the Tax Foundation, Tennessee's median effective property tax rate is below 0.7%, roughly half the national average. Veterans with a 100% service-connected disability can qualify for a full property tax exemption, and partial exemptions exist for lower disability ratings.
The state's veteran population has grown faster than the national average in recent years, driven in part by retirees seeking lower costs than neighboring Virginia or North Carolina. The Tennessee Valley Authority region around Clarksville—home to Fort Campbell—offers military healthcare access through Blanchfield Army Community Hospital.
Tennessee does not have a state-level veterans affairs department with the same breadth as Virginia or Texas, so benefits research requires more individual legwork. That administrative gap is the main reason it doesn't climb higher on lists of the best states for military retirees.
How to apply this: Use the Tennessee Department of Veterans Services benefits calculator to estimate your total state and local tax burden before moving.
5. South Dakota: The Underrated Option for Remote Retirees
South Dakota rarely appears on generic retirement lists, but it deserves attention from a specific group of military retirees: those who travel frequently or live internationally. Among the best states for military retirees, it stands out for one reason—flexibility.
The state has no state income tax, no inheritance tax, and no estate tax, and it allows retirees to establish residency with minimal physical presence requirements.
South Dakota's residency program requires spending just one night in the state to establish domicile, which is why it is popular among full-time RVers and expatriates. Military retirees who plan to travel extensively after service can maintain South Dakota residency, keep their driver's license and vehicle registration there, and avoid state income tax entirely.
The state also exempts all military retirement pay from taxation, and property taxes are moderate. The trade-off is limited military healthcare infrastructure—the nearest major military medical centers are in Colorado or Nebraska—so this option works best for retirees using TRICARE Select or those in good health.
Full-time RV living is a common arrangement among South Dakota-domiciled military retirees. The state's mail forwarding services and residency requirements are well-documented through the South Dakota Department of Revenue.
How to apply this: If you plan to travel extensively, research South Dakota's residency requirements through the South Dakota Department of Revenue and compare them to your current state's domicile rules.
Comparing the Top States for Military Retirees
Choosing between the best states for military retirees comes down to how you weigh the factors in the table below, which summarizes the key financial data across all five.
| State | State Income Tax on Military Pension | Disabled Veteran Property Tax Relief | Military Healthcare Access | Best For |
|---|---|---|---|---|
| Florida | None | Up to full exemption | Excellent (6 installations) | Overall value and amenities |
| Texas | None | Up to full exemption | Excellent (San Antonio cluster) | Property tax relief |
| Virginia | Partial deduction ($20,000) | Varies by county | Outstanding (Hampton Roads) | Healthcare proximity |
| Tennessee | None | Full at 100% disability | Moderate (Fort Campbell) | Low overall tax burden |
| South Dakota | None | Limited | Minimal | Travelers and RVers |
Action to take: Rank your top three priorities—tax savings, healthcare access, or lifestyle—then match them against this table to narrow your search.
Frequently Asked Questions About best states for military retirees
1. Which state offers the largest total tax savings for a 100% disabled veteran?
Texas and Florida both offer full property tax exemptions for 100% disabled veterans, combined with no state income tax. The difference comes down to local sales taxes and insurance costs. A retiree in Texas might save more on property taxes but pay more for homeowners insurance than a comparable Florida retiree.
Run the numbers for your specific disability rating and target county before deciding.
Texas and Florida both deliver full property tax exemptions for 100% disabled veterans, making them the best states for military retirees seeking maximum savings.
2. Do any states tax military retirement pay that I should avoid?
Yes. California, Vermont, and Oregon tax military retirement pay at their full state income tax rates, with limited or no veteran-specific deductions. New York exempts military pensions entirely, but its overall tax burden remains high.
If avoiding state income tax on your pension is a priority, these states should fall to the bottom of your list for the best states for military retirees.
3. How does TRICARE coverage work if I move to a state without a military base?
TRICARE Select allows you to see any TRICARE-authorized civilian provider, so living far from a military installation is workable. However, TRICARE Prime requires access to a military treatment facility or a Prime service area. Check the TRICARE service area map for your target ZIP code before moving to a state like South Dakota with limited military infrastructure.
TRICARE Select lets you see any authorized civilian provider, so distance from a base need not rule out the best states for military retirees.
4. Can I claim residency in a tax-friendly state while living overseas?
Yes, and this is a common strategy among military retirees living abroad. South Dakota, Texas, and Florida all allow you to maintain residency while living overseas, provided you meet their domicile requirements. Your military pension remains exempt from state tax, and you can use a mail forwarding service for official correspondence.
Consult a tax professional familiar with expatriate military retirement before committing.
Living abroad doesn't bar you from the best states for military retirees, since South Dakota, Texas, and Florida all permit overseas residency.
5. What is the best state for a military retiree who wants to work part-time?
Texas and Florida offer the strongest combination of no state income tax on either retirement or earned income, making part-time work financially efficient. Tennessee also qualifies since it eliminated its investment income tax. Virginia's $20,000 retirement pay deduction is less favorable if you plan to earn additional income, since that earned income is taxed at the state's regular rates.
For part-time work, Texas and Florida rank among the best states for military retirees by taxing neither retirement nor earned income.
Conclusion
Finding the best states for military retirees requires weighing tax policy against healthcare access and lifestyle preferences.
- Florida and Texas lead on overall tax savings and military infrastructure
- Virginia offers unmatched healthcare proximity despite partial pension taxation
- Tennessee provides low taxes with a lower cost of living than coastal states
- South Dakota works for travelers and remote retirees willing to trade healthcare access for tax simplicity
Ultimately, the best states for military retirees are the ones that align with your disability rating, healthcare needs, and post-service plans. Your next step is to request a benefits estimate from your target state's veterans affairs office.
Most states publish detailed military retiree benefit guides online, and a 30-minute review can reveal thousands in annual savings you might otherwise leave on the table.
