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By Carol Church

When the time comes to retire from the military, there are so many decisions to be made and transitions for service members and their families to think about. One major one is whether to stay in the community they’re currently living in or to move on to an area that may have more to offer in various ways. For many, this may be a welcome opportunity to return to an area where family live, or to a region they enjoyed when stationed there. But there’s more to consider, particularly from a financial point of view!

The situation will, of course, vary from person to person. Many military retirees will be quite young and looking to start a second nonmilitary career. (Did you know that the average military retiree is only in his or her 40s?) Some may still have children in school, which comes with its own set of considerations. Of course, others will be at a different stage of life and feel ready to stop working and pursue hobbies, travel, or relaxation.

So, keeping the diversity of the “military retiree” in mind, what are some possible considerations when choosing where to live after retiring from the military?

  1. Does the state tax military retirement pay?

This can be a big one if the servicemember will be drawing a retirement pension. Of the 50 states, 9 have no state income tax. 14 of those that do have chosen not to tax military retirement pay. Another 20 offer some kind of tax credit or tax exemption for military retirees. Others offer no breaks. These laws change frequently, so it’s a very good idea to research the current laws for any state under consideration. Retirees may also want to compare state income tax rates, which vary widely. Some tax higher earners at a fairly significant rate.

  1. Are there industries in the area that draw on skills gained in the military, if planning to still work?
    Government and defense contract jobs are obvious choices, but the medical, security, manufacturing, and IT fields (among others) may all hold opportunity. The unemployment rate may also be something to consider if the “retiree” plans to pursue a second career or if his or her spouse will be looking for work.
  2. Are there VA hospitals in the region, and what do other vets and rating systems say about them?
    Although not every retiree will choose to utilize the VA system for healthcare, it can be important to have the option. VA systems vary, so just knowing there is one in the area may not be enough—it pays off to look into ratings.
  3. Is this a popular area for military retirees?
    The military is nothing if not a huge community, and for some it will be hard to leave. Retirement may feel more comfortable and enjoyable with other veterans in the area. It’s even possible to move to specialized military senior living communities, if this is of interest.
  4. How affordable is housing in the area?
    Military families may be excited to finally purchase a “forever home” after holding back from purchasing or “making do” during years of PCSing. The VA loan program makes this dream even more attainable. For some, however, the realities of home buying may also be a bit of shock. Doing background research on the price and attainability of housing stock in the area is a must.
  5. Are there any bases nearby?
    Though this may not be a big consideration for some, others enjoy being near bases and having access to the amenities they can provide, such as the commissary, exchange, Space-A flights, etc.
  6. What is the area’s cost of living?
    Retirees will want to see how the costs of common expenses like groceries, health care, utilities, and son compares from region to region. (Property and local taxes are a big factor, too.) While it can be difficult to obtain a reliable estimate of this figure, some sites offer cost of living calculators, like this one and this one.
  7. What about climate, cultural opportunities, and general demographics of the area?
    These are more typical “where to retire” considerations are still going to be relevant. Many websites and articles provide information on these factors.

This is all quite a bit to consider—all the more reason to start thinking about these big choices early. Service members should start planning for retirement two to three years ahead of time. It will take time to get everything worked out and all the i’s dotted and t’s crossed. Many sites, lists, and articles rate the “best” cities, states, and area for military retirees, but of course, in the end, this decision will be very personal. Considering the financial implications of where to settle should certainly be part of the picture.

We’re hosting a 3-day learning event June 6-8 focused on retirement issues. Learn more about this Virtual Learning Event here.