The Five Best States for Military Retirement

The top five best states for military retirement are Florida, followed by Texas, Alabama, Tennessee, and Mississippi. The parameters used are cost of living, taxation, the presence of military facilities or VA (veterans’ administration), special incentives for ex-military personnel, and the concentration of military retirees in these states. Florida has grabbed the top spot, first, because of the presence of facilities that cater to the health and well-being of the retirees. Just some of these facilities are the Bay Pines VA Healthcare System; the Orlando VA Medical Center; outpatient clinics in Tallahassee, Jacksonville, and Fort Myers; and, Vet Centers and Benefits Administration offices scattered in strategic Florida city locations. Surely, the availability of these facilities makes retirees’ lives not only more wholesome but also healthier.


Best States for a Military Retirement: Why Florida Is Number One

Although Florida has a sales tax to the tune of six percent, it is not the only determinant of cost of living. Besides, what a state usually gives away as an incentive, it usually gets back through other means, such as taxation in other areas like property. The good news is in the state, there is some form of property tax protection, in addition to the impending 30 percent reduction by the Florida Senate of this tax that will apply to four of five districts (Bill SB 7154). Take note, the state is one of seven, which do not have income tax, even more incentive for an ex-military couple.

Texas has handily won the second spot among the best states for a military retirement primarily because it makes available many VA facilities as well, making the transition from working to retirement living a lot easier for the families involved. The Texan sales tax is 6.25% or just slightly above that of Florida, and while this does not hurt a significantly reduced income brought about by retirement, when it comes to property tax, there is always the danger that it might be more than the retired can afford. This is because property assessment is based on the value of the property and not the owner’s income level. Texas being a southern state like Florida, taxation of property is not as high relative to northern states like New Jersey.


Alabama’s Low Property Tax: A Sure Come-On for Retirees

Alabama has made it to the third position of the best states for a military retirement because it is one of ten states that exempt pensions from taxation in all government levels. As John Brady, former chairman of the Madison Public Library, writes in the New York Times (December 16, 2007), the average property tax paid in Alabama was $328 as opposed to New Jersey’s whopping $5, 773.

For military families who own or are about to own a property in Alabama, such taxation scenario is definitely a big boon. They may strongly consider buying property, which cannot be said for other states that military service personnel would consider upon retirement.


Tennessee and Mississippi: What the Two States Have to Offer

Now concerning Tennessee, what would explain the state’s acquisition of the fourth position is for one, like Florida, it has no income tax as well, while it has the same 6.25% sales tax rate as Texas. It is also not behind the first three when it comes to attractions, surroundings, and sceneries. For example, while Florida boasts of Disney World-Epcot, warm winters and enthralling beach scenery, Tennessee has rustic, balmy mountain spots ideal for a cottage style retirement. For couples who plan to retire while maintaining an active lifestyle, there are many ideal locales in the four states in which to keep the mind active and the body engaged in sports such as golfing, hiking and other optimum physical activities.

As the reigning number five in the best states for military retirees, Mississippi is one of 27 states that do not tax military retirement pay. However, although the four earlier best states for military retirement are also part of the list, the fifth in line does this with conditions. Hence, it is important to double-check these restrictions with the local VA office.

According to the Defense Finance and Accounting Service, state income tax will not be withheld from US military retirement pay unless the state has entered into a special arrangement with the Department of Defense. Just like Alabama, Mississippi excludes pensions from any income tax responsibility.

In summary, retirees should choose from the five best states for a military retirement: Florida, Texas, Alabama, Tennessee, and Mississippi. Together, these states display the best cost-benefit ratio, living conditions, amenities, as well as facilities for couples or families who have proven their loyalty to the military institution through continuous as well as exemplary service. Thus, they only deserve the best states for military retirement and with what each of these can offer, it should feel every inch like a warm welcome.


Return to the Best State to Retire In Page

or click here to return to Cheapest Places to Retire

feed icon