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.

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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

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.

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