2014's Best and Worst States for Military Retirees

Some states are better than others for those retiring from the military.

May 26, 2014 at 7:17AM

Retirement is typically viewed as the end of the line -- a time for rest, relaxation, and the pursuit of interests long ago put on the back burner. But the narrative is far different for military retirees.

For starters, the average officer is only 45.2 years old upon retirement from service, and enlisted personnel are even younger -- 41.4 years of age, according to The Congressional Research Service. Most are therefore still in the job market. Military retirees -- combat veterans in particular -- must also deal with the struggles of assimilation, which has proven especially difficult in the wake of the wars in Afghanistan and Iraq, with rising numbers of young vets encountering hardship and homelessness. Finally, military retirees are at the juncture of a few crucial public policy issues, namely our national security, aging population, and prodigious national debt -- which will be the subject of significant scrutiny, numerous reformatory efforts, and a great deal of turmoil in the months and years to come.

With that in mind, and in honor of Memorial Day, WalletHub sought to help ease the burden on our nation's military community by identifying the Best & Worst States for Military Retirees. This is a far more complicated issue than one might initially assume, given the extent to which state tax policies differ when it comes to military benefits, the relative friendliness of different job markets to veterans, and a variety of other important socioeconomic factors. As a result, WalletHub took 19 key metrics into account in devising its rankings. You can check them out below.

Source: WalletHub.

How to get even more income during retirement
Social Security plays a key role in your financial security, but it's not the only way to boost your retirement income. In our brand-new free report, our retirement experts give their insight on a simple strategy to take advantage of a little-known IRS rule that can help ensure a more comfortable retirement for you and your family. Click here to get your copy today.

Overall Rank

State Name

Economic Environment Rank

Quality of Life Rank

Health Care Rank

1 Wyoming 4 3 5
2 New Hampshire 29 4 1
3 Montana 17 5 4
4 South Dakota 10 10 6
5 Nebraska 14 12 2
6 Alaska 6 15 11
7 Delaware 32 1 14
8 Kansas 4 22 6
9 Oklahoma 2 14 18
10 Maine 44 2 13
11 North Dakota 9 25 12
12 Hawaii 21 21 6
13 Iowa 29 18 9
14 Colorado 13 11 29
15 Virginia 8 6 51
16 New Mexico 33 20 10
17 Idaho 24 9 28
18 Maryland 12 17 35
19 Mississippi 1 42 21
20 South Carolina 17 7 45
21 Vermont 49 8 15
22 Alabama 7 29 36
23 Wisconsin 17 27 27
24 West Virginia 38 31 16
25 District of Columbia 41 39 3
26 Washington 37 23 30
27 North Carolina 31 28 33
28 Missouri 25 32 36
29 Georgia 28 40 18
30 New Jersey 42 19 38
31 Massachusetts 26 43 20
32 Florida 27 23 48
33 Minnesota 46 25 21
34 Tennessee 16 37 41
35 Louisiana 20 49 25
36 Ohio 15 38 43
T-37 Connecticut 45 16 44
T-37 Texas 3 51 40
39 Kentucky 11 44 46
40 Utah 23 46 31
41 Nevada 22 30 50
42 Arkansas 36 36 38
43 Rhode Island 48 13 46
44 Oregon 43 41 23
45 Michigan 35 44 32
46 Pennsylvania 39 33 49
47 Illinois 34 50 24
48 Arizona 46 35 33
49 Indiana 40 48 41
50 New York 50 47 17
51 California 51 34 25

Methodology
Military retirees are confronted with a number of unique benefits relative to the general consumer population, largely due to the fact that the average service member retires in his or her 40s and will likely move on to find a civilian job. Military retirees may also be eligible for a variety of unique benefits, from educational discounts and pensions to tax breaks in certain states. WalletHub therefore sought to supplement standard retirement-attractiveness metrics -- such as housing costs, sales taxes, and access to leisure activities -- with a variety of additional metrics that speak to the unique needs of former military personnel.

We ultimately identified 19 key metrics, which collectively speak to the differences between each of the 50 states and the District of Columbia in terms of their overall attractiveness to military retirees. You can find them below, along with the corresponding weights that we used to construct the rankings. The three overall categories in which the metrics were grouped -- Economic Environment, Quality of Life, and Health Care -- were used for organizational purposes only and had no bearing on the overall rankings.

Economic environment

  • State Tax on Military Pension: 1
  • State and Local Sales Tax : 0.5
  • Veteran-Owned Businesses per 1,000 Inhabitants: 0.5
  • Volume of Defense Department Contracts: 0.25
  • Veterans Job Opportunities: 1
  • Number of Military Major Bases and Installations per 10,000 Veterans: 1
  • Housing Costs: 1
  • Cost of Living Index: 1

Quality of Life

  • Veterans per 100 Inhabitants: 1
  • Number of VA Benefits Administration Facilities per Number of Veterans: 1
  • University System Rank: 0.5
  • Arts & Leisure/Recreation Establishments per 100,000 Inhabitants: 1
  • Percentage of Population Age 40-Plus: 0.5
  • Number of Homeless Veterans per Number of Veterans: 1
  • Weather Conditions (based on sunshine and humidity): 1

Health Care

  • Number of VA Health Facilities per Number of Veterans: 1
  • Number of Federal, State and Local Hospitals per 100,000 Inhabitants: 1
  • Number of Physicians per 1,000 Inhabitants: 1
  • Emotional Health: 1

Source: Data used to create these rankings is courtesy of the U.S. Census Bureau, the U.S. Bureau of Labor Statistics, the Tax Foundation, the U.S. Small Business Administration Office of Advocacy, Transparency.gov, Indeed.com, the Department of Veterans Affairs, U.S. News & World Report, Gallup Healthways, the Department of Defense, Missouri Economic Research & Information Center and the U.S. Department of Housing and Urban Development.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers