The 10 Best States For Military Retirees To Buy A House

It may seem strange to think of a retiree as looking for a place to put down roots. That’s typically the plan of a much younger person contemplating a city to move to, or a young couple seeking a place to buy their first house.

But for recently retired service members, the decision of where in the wonderfully huge and diverse United States to begin their civilian life can be daunting. First, many retired military personnel are still in the prime of life — many have put in the minimum 20 years of service for full retirement by the time they are in their early 40s. Most look forward to a second career, so a place with a vibrant economy is a plus. And second, having spent many years living a nomadic life, in which moving around the U.S. and the world is the norm, for many ex-military their new stateside home will be the first place in adulthood they can really call home. So choosing where to set down roots is an important decision.

After gathering data on state taxes, cost of living, veteran population and state-specific resources available for veterans (see methodology below), Rocket Homes^SM determined that the following 10 states are the best states for military retirees to buy a house and build a future.

• Alabama
• Wyoming
• Arkansas
• Oklahoma
• Nevada
• Tennessee
• Mississippi
• North Carolina
• Louisiana
• South Dakota

Factors That Influence The Best States For Retired Military

When retired U.S. service members look for a good place to settle into their post-military life, there are many things to consider. Fortunately, regardless of what state they live in, all retired service members are entitled to the VA Home Loan benefit, which allows them and their surviving spouses financing on a home with no down payment, lenient credit requirements and no mortgage insurance. Each state, however, has different tax systems, cost of living rates, veterans benefits and veterans incentive programs. To reflect these differences, Rocket Homes has gathered the relevant data to determine and rank the best states in several areas most important to military retirees.

• State funding: Many states have a wide variety of benefits programs for both active service members and military retirees, as well as their families. These include state tax benefits, tuition assistance and grants, free vehicle tags, parks and recreation passes, hiring preferences and more.
• Taxes: Members who accrue 20 years of active duty in the Army, Navy, Air Force, Marines or Coast Guard qualify for U.S. Military Retirement Pay. These pension benefits count as taxable income at the federal level. Some states exempt this income when determining state income taxes. Further, some states do not have an income tax at all.
• Veteran population: The military represents a real cross-section of the American population, but in general many veterans are aligned in their values and worldview. It makes sense that many will make similar choices when deciding on a place to live. If a state has a healthy veteran population, it’s likely that it does things that attract and retain retired veterans.
• Cost of living: The cost of living in a state — a reflection of how much the necessities of life, such as shelter, food, energy, transportation and taxes — has strong ramifications for military retirees. This is mostly because retirees are on a fixed income through their military retirement pay. A low, stable cost of living helps retirees relax knowing that they can live within their means. Of course, many military retirees move on to productive second careers and enjoy the luxury of a double income.

The 10 Best States For Military Retirees

All these factors weigh on deciding the best U.S. states for military retirees. All U.S. states have programs and benefits for veterans, for example, but some are more comprehensive than others. For military retirees who are truly retired and not planning a return to civilian work, the tax burden and cost of living is also crucial. Finally, states that have a nice balance of peace and quiet, excellent recreation, and culture and nightlife that is well-suited to the 40+ age group have more appeal to this demographic. Here are the 10 states that meet all of these criteria extremely well.  

1. Alabama

• No military retirement income tax
• Property tax: 0.41%
• State funding per veteran: $12.68
• Percentage veteran population: 8.10%
• Cost of living index: 88.1

 With plenty of Southern charm, tight-knit communities and mild winters (213 days of sunshine annually), Alabama can be an excellent choice for retired military personnel to kick back and relax, start a new career or perhaps a little of both. Alabama’s cost of living index consistently scores in the top 10 lowest among U.S. states, a plus for retirees living on a fixed pension income. The state’s median home sale price in 2023 was $243,153, well below the national average of $332,070.

In 2024 Alabama will add its fifth veterans home. These subsidized facilities provide everything from long-term and short-term care, rehab, therapy, dementia and memory care as well as palliative care. Active retirees enjoy Alabama’s natural beauty and recreational opportunities, including 60 miles of white sandy beaches on the Gulf of Mexico. The communities of Orange Beach, Gulf Shores and Dauphin Island are popular with retirees.

If you’re considering moving to the “Heart of Dixie” state, check out homes for sale in Alabama.

2. Wyoming

• No income tax
• Property tax: 0.61%
• State funding per veteran: $12.72
• Percentage veteran population: 9.20%
• Cost of living index: 92.5

Veterans who have given two-plus decades of their lives in service to America might find the awesome, rugged beauty of Wyoming a perfect reward in their retirement. Two of America’s most popular national parks — Yellowstone and Grand Tetons — are located in the Cowboy State. And stargazing is spectacular in a state with some of the cleanest air and lowest light pollution in the nation.

Nearly 10% of Wyoming’s population is comprised of veterans. Those living on a fixed income of military retirement pay find the state very affordable. In addition to zero income tax and a state sales tax of just 4%, Wyoming is also among the top 10 states for lowest property tax rate. The cost of living index in Wyoming is also well below the national median. In Cheyenne, the state’s largest city, for instance, the cost per square foot to rent an apartment is just $77.50, well below the U.S. average of $219.10. Qualified veterans get special benefits for unemployment, hunting and fishing licenses and park passes, as well as a state property tax exemption.

Interested in what the housing market has to offer in Wyoming? Check out homes for sale in Wyoming.

3. Arkansas

• No military retirement income tax
• Property tax: 0.62%
• State funding per veteran: $13.96
• Percentage veteran population: 7.70%
• Cost of living index: 90.6

Arkansas is a state of underrated natural beauty that is also among the top 10 U.S. states for lowest cost of living. The median home sale price is $273,423, well below the national average. In a state with 9,700 miles of waterways and 600,000 acres of lakes, a waterfront home is well within reach of people with a fixed or modest income. Arkansas also has very low property taxes and charges no income tax on military retirement income. The Arkansas Department for Veterans Affairs (ADVA) oversees a broad program of veterans benefits, including discounts for camp sites and hunting and fishing licenses, in-state tuition for veterans, spouses and families regardless of where they live and an employment counseling and job referral service.

Arkansas has seven national parks, including Hot Springs National Park and the Buffalo National River, which runs for 135 miles through the Ozark Mountains. The state is centrally located, with four interstates and an extensive highway system that can get you anywhere in the eastern United States in a day’s drive, with access to cities like Memphis, Dallas/Fort Worth, New Orleans and the entertainment mecca of Branson, Missouri.

If you’re thinking of moving Arkansas, begin by researching homes for sale in Arkansas.

4. Oklahoma

• No military retirement income tax
• Property tax: 0.90%
• State funding per veteran: $14.13
• Percentage veteran population: 8.00%
• Cost of living index: 85.8

Oklahoma is another U.S. state that combines lots of peaceful rural living, small town charm and high affordability as compared to other U.S. states. The state is among the top five states for lowest cost of living and the median home sale price of $212,250 is among the lowest in the U.S. Even the bigger towns in Oklahoma are pretty small, and there are small towns everywhere. Located in the middle of the southern U.S., Oklahoma’s food and culture take a little flavor from the South, the Southwest, the Midwest, and of course their southern neighbors in Texas.

Oklahoma offers multiple veterans programs for education and employment. Military retirees are exempt from paying state income tax on their retirement pay and can also get relief from the state sales tax if they sign up on the Oklahoma Veterans registry. The state offers special programs for women veterans as well.

If you find yourself dreaming about life in Oklahoma, you can start by looking at homes for sale in Oklahoma.

5. Nevada

• No income tax
• Property tax: 0.60%
• State funding per veteran: $12.88
• Percentage veteran population: 7.90%
• Cost of living index: 103.2

Though gambling is now legal in many U.S. states, Nevada was the first and the city of Las Vegas is the greatest gambler’s paradise in the country, if not the world. With its warm climate and low humidity, endless entertainment and booming economy, Las Vegas is a favorite for many American retirees. It even has an NFL franchise now. But for those who like the quiet life, wide open spaces, and great natural beauty, basically the rest of Nevada is nothing but that. The nature writer Richard G. Lillard said that Nevada is “a land that is geology by day and astronomy at night.”

While the cost of living and housing prices are pretty high around Las Vegas, they are much lower in the rest of the state, and state property taxes are low, too. There is no income tax in Nevada. Nevada has a wide variety of programs and benefits specifically for veterans. To help cut through the red tape, which can be daunting, the state employs VA accredited Veterans Service Officers through the Nevada Department of Veterans Services.

Considering buying a home in The Silver State? Check out homes for sale in Nevada.

6. Tennessee

• No income tax
• Property tax: 0.71%
• State funding per veteran: $12.51
• Percentage veteran population: 7.30%
• Cost of living index: 90.2

With cost of living and median home prices both well below the national average, as well as terrific weather year-round, Tennessee remains a very affordable and enjoyable place to live, which fuels its rapidly growing attractiveness for migrating retirees from northern midwestern states, the northeast and even Canada. The cultural jewel in the center of Tennessee is the country music and entertainment mecca of Nashville, one of the fastest growing cities in America. To the east is the fabulous beauty of the Appalachian Mountains, with several peaks above 6,000 feet. And to the west, along the Mississippi River, lies Memphis, the home of the blues.

Retired veterans will appreciate that Tennessee has zero income tax and very low property taxes, with further property tax relief for disabled veterans and surviving spouses. There are multiple benefits for veterans’ motor services, recreation passes, hunting and fishing licenses, as well as burial services and expenses.

Starting to think seriously of a move to Tennessee? Check out homes for sale in Tennessee.

7. Mississippi

• No military retirement income tax
• Property tax: 0.81%
• State funding per veteran: $12.37
• Percentage veteran population: 6.90%
• Cost of living index: 85

With the lowest cost of living, low property taxes and the second lowest median home price in the United States, along with mild winters, Mississippi is an extremely affordable and comfortable state for fixed income veterans living on military retirement pay. Further helping is that Mississippi does not tax military retirement pay.

Mississippi is a very rural state, with lots of tight-knit small and medium-sized towns that make excellent places to retire. The largest city and capital, Jackson, has a population of about 150,000. For the amenities of a larger city, it is a drive of less than two hours to places like Memphis, New Orleans and Birmingham, Alabama. Mississippi culture embraces a slow-paced, genteel southern lifestyle, soul food and blues music. Mississippi has more than 60 miles of coastline on the Gulf of Mexico. West Ship Island in the Gulf Islands National Seashore is a pristine sanctuary with white sandy beaches.

If you’re interested in researching Mississippi’s housing market, check out homes for sale in Mississippi.

8. North Carolina

• No military retirement income tax
• Property tax: 0.84%
• State funding per veteran: $13.86
• Percentage veteran population: 7.60%
• Cost of living index: 95.7

If you want to get in on North Carolina’s affordability and diverse natural beauty, you’d better act fast. The Tar Heel State is booming, with more than 900,000 new residents since 2010. Whether you want oceanfront views on the Atlantic, bustling nightlife or a gorgeous sunset over the Appalachian Mountains, North Carolina has got you covered. And despite its clean, modern cities, top-notch universities, and a diverse economy covering everything from agriculture to high tech, North Carolina maintains its southern manners. The food and craft beer scene is elite, and it’s the physical and spiritual home of NASCAR racing. What’s not to like?

North Carolina takes care of its veterans. The state does not charge income tax on military retirement pay. The North Carolina Department of Military and Veterans Affairs has programs in education, housing, and employment — every state agency gives preferential consideration to veterans in hiring. There are specific programs and an annual conference supporting women veterans as well.

If you’re considering a move to North Carolina, begin by looking at homes for sale in North Carolina.

9. Louisiana

• No military retirement income tax
• Property tax: 0.55%
• State funding per veteran: $11.49
• Percentage veteran population: 6.30%
• Cost of living index: 93.6

With a culture that is truly unique among all other U.S. states, Louisiana might be the perfect place to retire for former service members. First, the cost of living is low, the average home price is well below the national average, state property taxes are very low and there is tax on military retirement pay. Among the many progressive veterans assistance programs is the Military Family Assistance fund for financial hardship, five state-of-the-art Veterans Homes, as well as military funeral and burial coverage.

No discussion of Louisiana can proceed without mentioning New Orleans, one of the liveliest cities, with perhaps the greatest music scene, in the entire world. Then there is the food. Louisiana has large Cajun and Creole populations that bring unique (sometimes spicy) flavors to their food, which relies heavily on seafood from the Gulf of Mexico and its tidal waters as well freshwater fish from the state’s many lakes and streams. Louisiana’s people are friendly, with plenty of southern charm, and they tend to take life at a little slower pace.

If Louisiana intrigues you as a place retire, you can start by looking at homes for sale in Louisiana.

10. South Dakota

• No income tax
• Property tax: 1.31%
• State funding per veteran: $13.57
• Percentage veteran population: 8.10%
• Cost of living index: 94.5

Fixed income retirees enjoy South Dakota’s zero income tax and low cost of living. The median home price of $275,123 is below the national average. If you like wide open spaces, South Dakota might be the right fit. Bisected through the middle by the Missouri River — this is the seventh largest state in terms of landmass and fifth least populated state. South Dakota law directs that each county in the state must employ a County Veterans Service Officer (CVSO) who guides inquiring veterans through an impressive menu of available services, programs and benefits available.

The vibe of South Dakota is decidedly small-town, Midwest friendly. You can expect holiday parades, Friday night football games and community fish fry dinners. Sioux Falls (pop. 196,000) to the extreme east and Rapid City (pop. 76,000) in the west are the two largest cities in South Dakota. The state’s open highways attract motorcyclists to the Badlands National Park and to the town of Sturgis, where every August hundreds of thousands of riders come to the Sturgis Motorcycle Rally.

Intrigued with what South Dakota has to offer? Check out homes for sale in South Dakota.

3 More Popular States For Military Retirees

Of course, there are military veterans enjoying their retirement in every state in the union. Here are a few more that may have special appeal to retired vets.

1. Alaska

While the cost of living may be a bit high, it’s impossible to deny the incredible natural beauty and recreational celebration that is Alaska. For retired veterans who like to hunt, fish, sail, boat, kayak or hike, Alaska may seem like paradise. No secret then why it has a higher percentage of veteran population than any other state on our list.

To further investigate what Alaska has to offer, search homes for sale in Alaska.

• No income tax
• Property tax: 1.19%
• State funding per veteran: $11.53
• Percentage veteran population: 15.50%
• Cost of living index: 126.6

2. Florida

• No income tax
• Property tax: 0.89%
• State funding per veteran: $11.62
• Percentage veteran population: 7.60%
• Cost of living index: 102.8

Retire in Florida? Not exactly a novel concept. In fact, a 2021 United Van Lines' National Movers Study found that Florida was the most popular state to retire to, with 39% of people moving to the Sunshine State citing retirement as the reason for their move. In the deepest winter months in America, Florida undeniably has better weather than most any other state. In a state surrounded by water and filled with lakes, the fishing is fantastic. Since there are so many retirees, services for retirement age people are plentiful. And, there is no income tax in Florida.

To start sizing up Florida’s real estate market, search homes for sale in Florida.

3. Virginia

• Income tax
• Property tax: 0.82%
• State funding per veteran: $10.89
• Percentage veteran population: 10.30%
• Cost of living index: 102.8

The wonder of Virginia is that it has a little bit — in some cases a lot — of everything. It has ocean frontage in and around Virginia Beach, hundreds of miles of coastline on the Chesapeake Bay, rich farmland and forest, and of course beautiful country in the Appalachian Mountains. It’s a state with a diverse and vibrant economy, excellent health care and great food. The winters are mild in Virginia, but residents get to experience all four seasons completely. Norfolk, Virginia is the home of the U.S. Navy’s Atlantic Fleet.

To get started on finding a place to live in Virginia, check out homes for sale in Virginia.

The Bottom Line

America’s military retirees remain a precious resource to the country even after their service is completed. They deserve a chance to set down roots after sometimes two decades of a nomadic existence moving from base to base across the U.S. and often the world. For those who subsist entirely on their military retirement income, a state that does not collect income tax or does not collect tax on military retirement pay provides extra economic security for veterans. Excellent recreation and plenty of peace and quiet are also great rewards for Americans who have given so much in service to their country.

Military retirees who have found a place to begin their next chapter, and are ready to buy a house, can begin the mortgage process online today.  

Methodology: Finding The Best States To Live In For Military Retirees

Rocket Homes^sm collected and analyzed the most recent data on 5 key statewide metrics to give us insight into the top states best for military retirees. The metrics used in this study include presence of military retirement income tax or income tax, property tax, amount of state funding per veteran, percentage of veteran population, and cost of living index. These metrics were chosen based on public data availability and topical relevance. Metrics from the U.S. Census are based on 2021 ACS 1-year estimates. Weights were then applied to each metric depending on their individual importance in the study. The weighted scores for each metric were summed to create the overall Best State To Live Score for each state. The final scores are sorted to produce the final rankings.