Retirement Planning

2023’s Best & Worst States For Military Retirees

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

With May being Military Appreciation Month and Memorial Day approaching, the personal-finance website WalletHub today released its report on 2023’s Best & Worst States for Military Retirees, along with its Memorial Day Facts infographic and expert commentary. View the complete findings here.

As military personnel retire, whether they faced active combat or not, they may find it difficult to readjust to civilian life. Many retirees face major struggles including Posttraumatic Stress Disorder, disability and homelessness, which are especially difficult to deal with during this period of economic difficulty. These veterans must also consider how state tax policies on military benefits vary, along with the relative friendliness of different job markets and other socioeconomic factors, when choosing a state in which to settle down.

In order 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 number of VA health facilities to job opportunities for veterans.

Best States for Military RetireesWorst States for Military Retirees
1. Florida42. Georgia
2. South Carolina43. Tennessee
3. Virginia44. California
4. Minnesota45. New Mexico
5. Connecticut46. Washington
6. New Hampshire47. Vermont
7. Maryland48. Mississippi
8. South Dakota49. Nevada
9. North Carolina50. District of Columbia
10. North Dakota51. Oregon

Memorial Day Facts

  • 97 – Number of members of the 118th Congress who have served in the U.S. military, only the 4th time in the last 50 years with an increase at all in the total veterans elected.
  • 3.4M – Number of people expected to travel by plane over Memorial Day weekend (up 11% over 2022).
  • 818 – Number of hot dogs consumed every second from Memorial Day to Labor Day (seven billion total).
  • 15 to 80 Percent Off – Discount shoppers can expect during Memorial Day weekend sales.
  • 100M+ – Number of households worldwide that will watch the National Memorial Day parade broadcast on TV.

Expert Commentary

Should veterans have to pay taxes on retirement pay?

“I believe military retirement benefits should be taxed similarly to Social Security. That said, the Social Security system’s tiered taxation structure, which taxes benefits at 0%, 50%, or 85%, is complex and could benefit from modernization. Therefore, a simplistic replication of this system for military retirement benefits might not be ideal. Our military personnel deserve our utmost respect, and while their service merits substantial retirement benefits, a balanced tax system should apply. However, when it comes to military disability benefits, the situation is completely different. These benefits should remain tax-exempt.”
Colin M. Slabach Ph.D. CFP® – Clinical Assistant Professor; Faculty Lead for the Masters in Financial Planning program, New York University

When considering career opportunities post-retirement, veterans bring a wealth of experience that many employers highly value...

“The absence of a Federal Income Tax on Veteran’s benefits might be a further incentive to attract highly skilled people with strength of character to consider enlisting in the US Armed Forces. People generally respond to incentives, and such a tax benefit might be a difference-maker for people thinking of making such a commitment.”
George A. Haloulakos, CFA – Charterholder Finance Instructor, University of California, San Diego; Owner, Spartan Research; Author of Call to Glory

What should veterans consider in choosing where to retire?

“Veterans should retire in a State that brings them the most joy and comfort. Proximity to the family is the most critical. If a veteran plans to work part-time, where is the best place to maintain part-time employment? Another important consideration should be the presence of a veteran’s hospital if that is where they plan to receive their health care. Of course, leisure activities are also important, whether these are outdoor activities such as hunting or fishing or indoor activities. Every veteran will weigh each of these and other factors differently, yet these are the key ones that should be considered.”
Carl A. Castro, Ph.D. – Professor; Director, Military and Veteran Programs, University of Southern California; Colonel, U.S. Army (Retired)

“If we are talking about the quality of life – then factors such as being close to family and friends, as well as the weather, can suggest specific places to retire. If we are talking about money decisions, then the two big areas are the cost of living and taxes (a part of the cost of living). States that do not have a state income tax can be very attractive. Given the recent drastic increase in housing prices, locations, where a veteran can afford a house, can also be great choices. Some retired veterans, like my brother, like to live very close to a military base so they can use the commissary, gym, health system, and other services on post. All of these factors should be considered when deciding where to retire.”
James Brau – Professor, Brigham Young University

What are the best economic opportunities for retired military personnel looking for a new career?

“Given our country’s continued labor shortage, which can fluctuate depending on the most recent job reports, there exist myriad economic opportunities for retired military personnel. Instead of listing specific occupations, more generally, I would encourage veterans to seek jobs requiring skills that translate well from their military background. Doing so will allow military retirees to capitalize the most on their military experiences. Transition experts can help with this process, both mechanically and in terms of decoding military job responsibilities into language that the civilian sector comprehends. Conversely, if a veteran wishes to pivot significantly to a new career field, doing so might require some additional education or certification(s) to establish professional credibility before seeking a position. Either way, the best economic opportunities will likely result from the veteran finding a role that provides the most fulfillment. Being excited about an occupation will lead to productivity and advancement. So, from an economic perspective, it could be better to start at a lower-paying job the veteran loves than a higher-paying one that makes the veteran miserable. In the end, the former situation will become more beneficial economically.”
Brian C. Payne, Ph.D., CFP® – Associate Professor, University of Nebraska at Omaha

“When considering career opportunities post-retirement, veterans bring a wealth of experience that many employers highly value. Certain sectors, such as government and civil services, defense contracting, security, and education, often actively recruit former military personnel. However, the most beneficial opportunities tend to be those that directly correlate with the skills acquired during military service. Jobs that can leverage these transferable skills or where a veteran’s certification or security clearance could streamline the hiring process can be particularly advantageous. This is because these factors can reduce the cost and time associated with training new hires, making veterans an attractive choice for employers.”
Colin M. Slabach Ph.D. CFP® – Clinical Assistant Professor; Faculty Lead for the Masters in Financial Planning program, New York University