This is your Ultimate Guide to the Top 5 Best States for Military Retirees, whereby we used a weighted average statistical analysis to arrive at our conclusions.
We compared metrics across five key financial measures that matter most to military retirees.
If you’re retired military who served your country for 20 years or more, choosing where to live after leaving the military is a very important decision for you and your family.
You might be wondering: What are the best military friendly retirement states?
Well, here’s the deal: Some states are more friendly to military retirees than others, and thus, selecting where to live could save (or cost) you thousands of dollars per year!
Okay, let’s jump into VA Claims Insider’s list of the best states for military retirement in 2023.
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- 18 States With Full Property Tax Exemption for 100 Disabled Veterans
- List of the 5 Best States for Military Retirement
- #1 Best Places to Live for Military Retirees: Texas
- #2 Overall Best States for Veterans to Retire: Florida
- #3 Overall Best Places Military Retirement: Alaska
- #4 Best State to Retire for Military: Nevada
- #5 Best Places for Military Retirement: Illinois
- Top 5 Best Military Friendly Retirement States: Weighted-Average Scores
- How We Developed Our Top 5 States for Retired Military (Quality Assessment Scores)
- About the Author
List of the 5 Best States for Military Retirement
- #1. Texas
- #2. Florida
- #3. Alaska
- #4. Nevada
- #5. Illinois
#1 Best Places to Live for Military Retirees: Texas
No surprise here: Texas is the #1 overall best state for military retirees.
The benefits offered to retired military in Texas are simply unmatched by any other state.
For example, Texas is one of just two states with full property tax exemptions for 100% scheduler or TDIU disabled veterans (in addition to veterans with a 100% P&T rating).
Texas also offers generous property tax reductions for disabled veterans with a VA rating between 10% and 90%.
Also, Texas is one of 9 states with no state income tax, so you get more bang for your buck.
Texas also exempts military retiree pay, Survivor Benefit Plan (SBP) payments, and VA disability compensation payments from any taxation.
Texas also has the #1 most robust veteran benefits programs in the nation, which offers incredible state benefits to retired military.
For example, the Hazelwood Act is one of the best veteran education benefits in the country; it provides military retirees, veterans, disabled veterans, spouses, and dependent children with up to 150 hours of tuition free college at state schools.
The state of Texas benefits from large federal VA expenditures as well, with over $21 billion directly benefiting military retirees, veterans, and disabled veterans (the highest expenditure rate in the country).
TOTAL EXPENDITURES: $21.7 billion
TOTAL EXPENDITURE BY VETERAN: $13,907.60
- Compensation & Pension: $12.2 billion
- Construction: $48.4 million
- Education/Voc Rehab/Employment: $1.3 billion
- Loan Guaranty: $873.9 million
- General Operating Expenses: $94.3 million
- Insurance & Indemnities: $86.9 million
- Medical Care: $7.1 billion
Finally, Texas is the #2 overall most veteran friendly state (behind California) by population—meaning, a lot of other retired military and veterans live there.
According to VA published statistics for FY 2021, a total of 1,562,560 retired military and veterans call Texas home.
All these factors make Texas the #1 best state to retire for military in 2023.
Texas Military Retirees Quality Assessment Score: 99/100
#2 Overall Best States for Veterans to Retire: Florida
Again, no surprise here: Florida is the #2 overall best state for disabled veterans to retire in 2023.
Florida offers military retirees a ton of fantastic benefits.
For example, Florida is one of 18 states with full property tax exemptions for disabled veterans with a 100% P&T VA rating.
Florida also offers a substantial property tax exemption of $5,000 for disabled veterans with a VA rating of 10% or higher.
Also, Florida is one of 9 states with no state income tax, so your earnings go a long way.
Florida also exempts military retirement pay for military retirees, Survivor Benefit Plan (SBP) payments, and VA disability compensation payments from state taxes.
Furthermore, the state of Florida has the second best veteran benefits program in the nation (just behind Texas), which offers incredible state benefits to retired military members.
Florida’s Congressman C.W. Bill Young Tuition Waiver Program is one of the best education benefit programs for military retirees, veterans, and disabled veterans in the United States.
Florida waives out-of-state tuition fees for all retired military and honorably discharged veterans who reside in the state and who are enrolled in Florida public, post-secondary institutions.
Florida also provides scholarship opportunities for dependent children and spouses of veterans who died from a service-connected disability or who are rated at 100% P&T by the VA.
In addition, the state of Florida benefits from large federal VA expenditures, with over $17 billion directly benefiting military retirees, veterans, and disabled veterans (the third highest expenditure rate in the country).
TOTAL EXPENDITURES: $17.3 billion
TOTAL EXPENDITURE BY VETERAN: $11,620.12
- Compensation & Pension: $9.1 billion
- Construction: $101.9 million
- Education/Voc Rehab/Employment: $907 million
- General Operating Expenses: $62.4 million
- Insurance & Indemnities: $96.0 million
- Medical Care: $7.1 billion
Lastly, Florida is the #3 overall most veteran friendly state (behind California and Texas) by population—meaning, a lot of other military retirees and veterans live there.
According to VA published statistics for FY 2021, a total of 1,492,176 retired military and veterans call Florida home.
All these factors combined make Florida the #2 best state for military retirement in 2023.
Florida Military Retirees Quality Assessment Score: 94/100
#3 Overall Best Places Military Retirement: Alaska
This one might raise some eyebrows: Alaska is the #3 overall best state for military retirees.
Alaska has some fantastic statewide benefits for retired military, veterans, and disabled veterans.
Alaska disabled veterans with a VA disability rating of 50% or higher can receive a property tax exemption of up to the first $150,000 of the assessed value of his/her primary residence.
The exemption transfers to a surviving spouse if the veteran is deceased due to a service connected disability.
In addition, Alaska is one of 9 states with no state income tax, therefore, veterans in Alaska do not pay any state income tax.
Military retirees pay, Survivor Benefit Plan (SBP) payments, and VA disability pay are also tax free in Alaska.
Likewise, Alaska has one of the top veteran benefits programs in the nation (just behind Texas and Florida), which offers incredible state benefits to retired military, veterans, and disabled veterans.
Alaska veterans, their spouses, and dependents may qualify for a host of educational benefits while attending school at any Alaska state school.
These benefits include resident tuition rates or tuition waivers.
Alaska does rank toward the bottom in federal VA expenditures, but that’s largely due to its small veteran population.
In FY 2021, Alaska received $777.2 million directly benefiting military retirees, veterans, and disabled veterans (the fifth lowest expenditure rate in the country).
TOTAL EXPENDITURES: $777.2 million
TOTAL EXPENDITURE BY VETERAN: $11,534.41
- Compensation & Pension: $330.4 million
- Construction: $3.7 million
- Education/Voc Rehab/Employment: $53.6 million
- General Operating Expenses: $23.7 million
- Insurance & Indemnities: $1.7 million
- Medical Care: $364 million
Finally, Alaska is the #47 overall most veteran friendly state by population—meaning, there’s a much smaller number of military and veterans that call Alaska home.
But it’s a perfect place if you’re looking to escape into the wild and live off the grid post military retirement.
According to VA published statistics for FY 2021, a total of 67,388 retired military and veterans live in Alaska.
Even though the last two factors count against Alaska, in our weighting factors, it’s still the #3 best state for military retirees.
Alaska Military Retirees Quality Assessment Score: 80/100
#4 Best State to Retire for Military: Nevada
This pick even surprised us a bit: Nevada is the #4 overall best state for retired military.
Nevada has some fantastic benefits for military retirees, veterans, and disabled veterans.
Retired military and veterans in Nevada with a 100% VA disability rating can receive a property tax exemption up to $20,000 of the assessed value of his/her primary residence.
Disabled veterans with a VA rating between 60% to 70% are eligible for a $10,000 deduction, and disabled veterans with a disability rating of 80% to 90% percent are eligible for a $15,000 reduction.
In addition, Nevada is one of 9 states with no state income tax, and therefore, veterans in Nevada do not pay any state income tax.
Military retirement pay, Survivor Benefit Plan (SBP) payments, and VA disability pay are also tax-free in Nevada.
Similarly, Nevada has one of the top 10 veteran benefits programs in the country, which offers incredible state benefits to retired military, veterans, and disabled veterans.
Honorably discharged veterans and on active duty stationed in Nevada at the time of discharge (including the Marine Corps Mountain Warfare Training Center at Pickle Meadows, California according to NVDS) are charged tuition as in-state residents.
In addition, honorably discharged veterans within “the two years immediately preceding the date of matriculation” may also receive in-state tuition rates at any Nevada state school.
The state of Nevada falls in the middle of federal VA expenditures, with over $2.81 billion directly benefiting military retirees, veterans, and disabled veterans.
TOTAL EXPENDITURES: $2.81 billion
TOTAL EXPENDITURE BY VETERAN: $12,881.02
- Compensation & Pension: $1.45 billion
- Construction: $6.7 million
- Education/Voc Rehab/Employment: $123 million
- General Operating Expenses: $10.9 million
- Insurance & Indemnities: $11.1 million
- Medical Care: $1.2 billion
Finally, Nevada is the #29 overall most veteran friendly state by population.
According to VA published statistics for FY 2021, a total of 218,052 retired military and veterans call Nevada home.
In conclusion, we rank Nevada #4/5 best states for military retirees to live in 2023.
Nevada Military Retirees Quality Assessment Score: 75/100
#5 Best Places for Military Retirement: Illinois
Illinois rounds out our top 5 best states for disabled veterans in 2023, coming in at #5/5.
The state of Illinois offers a wide range of benefits for disabled veterans, which we’ll discuss in this section.
State of Illinois disabled veterans or surviving spouses with a VA disability rating of 30% to 50% receive an annual property tax exemption of $2,500 on their primary residence.
Disabled veterans or surviving spouses with a VA disability rating of 50% to 70% receive an annual exemption of $5,000 per year.
And Illinois veterans or surviving spouses of veterans with a service connected VA disability rating of 70% or higher are completely exempt from paying property taxes on their primary residences.
Illinois does have a flat income tax system, which means that everyone, regardless of income level, is taxed at the same rate.
The current state income tax rate in Illinois is 4.95%.
However, military retirement pay, SBP payments, and VA disability pay are tax free in Illinois.
The Illinois Veterans’ Grant (IVG) Program pays tuition and fees at all Illinois state-supported colleges, universities, and community colleges for eligible Illinois veterans.
The state of Illinois falls at #11 for federal VA expenditures, with over $5.52 billion directly benefiting military retirees, veterans, and disabled veterans.
TOTAL EXPENDITURES: $5.52 billion
TOTAL EXPENDITURE BY VETERAN: $9,342.87
- Compensation & Pension: $2.43 billion
- Construction: $24.0 million
- Education/Voc Rehab/Employment: $235.7 million
- General Operating Expenses: $21.0 million
- Insurance & Indemnities: $46.3 million
- Medical Care: $2.76 billion
Finally, Illinois is the #10 overall most military veteran friendly state by population.
According to VA published statistics for FY 2021, a total of 591,269 retired military and veterans call Illinois home.
For these reasons, we rank Illinois #5/5 best states for military retirees to live in 2023.
Illinois Military Retirees Quality Assessment Score: 73.5/100
Top 5 Best Military Friendly Retirement States: Weighted-Average Scores
| Overall State Rank | Property Tax Exemptions (30%) | Income Tax Waivers (30%) | State Veterans Benefits (20%) | Federal VA Expenditures (10%) | Veteran Population (10%) | TOTALS | |
| Texas | #1 | 30 | 30 | 20 | 9.5 | 9.5 | 99 |
| Florida | #2 | 27 | 30 | 20 | 9.5 | 9.5 | 94 |
| Alaska | #3 | 22.5 | 30 | 15 | 7.5 | 5 | 80 |
| Nevada | #4 | 15 | 30 | 15 | 9 | 6 | 75 |
| Illinois | #5 | 30 | 15 | 16 | 5 | 7.5 | 73.5 |
How We Developed Our Top 5 States for Retired Military (Quality Assessment Scores)
VA Claims Insider used five key qualitative and quantitative measures to calculate the Best Overall States for Military Retirees, including (1) Property Tax Exemptions, (2) Income Tax Waivers, (3) State Veterans Benefits Availability, (4) Federal VA Expenditures and Improvements Per Veteran, and (5) Veteran Population.
Property tax exemptions are the crème-de-la-crème state benefit military and veterans, so we assigned it a 30% weighting with a 100 point maximum score.
Income tax waivers are also critically important to military retirees, and thus, we assigned it a 30% weighting with a 100 point maximum score.
State veterans benefits availability was assigned a 20% weighting while federal VA expenditures and improvements per veteran and veteran population received 10% each.
All weighted averages were also based on a 100 point maximum score.
The final step was to sum the weighted average scores across each of the five metrics to get a total Military Retirees Quality Assessment Score.
Source Data: VA National Center for Veterans Analysis and Statistics
About the Author
Brian Reese
Founder & CEO
Brian Reese is a VA benefits expert, author of the #1 Amazon Bestseller You Deserve It: The Definitive Guide to Getting the Veteran Benefits You’ve Earned, and founder of VA Claims Insider – “The Most Trusted Name in Education-Based Resources for Veterans.”
His frustration with the 8-step VA disability claims process led him to create “VA Claims Insider,” which provides U.S. military veterans with tips, strategies, and lessons learned for successfully submitting or re-submitting a winning VA disability compensation claim.
Brian is also the CEO of Military Disability Made Easy, which is the world’s largest free searchable database for all things related to DoD disability and VA disability claims and has served more than 4,600,000 military members and veterans since its founding in 2013.
His eBook, the “9 Secrets Strategies for Winning Your VA Disability Claim” has been downloaded more than 300,000 times in the past three years and is the #1 rated free VA disability claims guide for veterans.
He is a former active duty Air Force officer with extensive experience leading hundreds of individuals and multi-functional teams in challenging international environments, including a combat tour to Afghanistan in 2011 supporting Operation ENDURING FREEDOM.
Brian is a Distinguished Graduate of Management from the United States Air Force Academy, Colorado Springs, CO and he holds an MBA from Oklahoma State University’s Spears School of Business, Stillwater, OK, where he was a National Honor Scholar (Top 1% of Graduate School class).
