Best Places to Retire From the Military: A Decision Framework
The best place to retire from the military depends on four factors that actually affect a retiree's day-to-day life and finances: state tax treatment of retired pay, access to a military treatment facility and commissary, proximity to VA care, and, for a smaller group, the realities of retiring overseas. This page walks through each factor with real, sourced examples instead of a fabricated "top 10 cities" ranking — the right answer depends on your rank, your VA rating, your family situation, and how far you're willing to live from a base.
Factor 1: How the State Taxes Your Retired Pay
State tax treatment of military retired pay varies enormously, and it's the single biggest recurring dollar figure most retirees can control simply by choosing where to live. As of 2026, most states either have no state income tax at all — Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming — or have enacted a full exemption specifically for military retired pay, a list that has grown steadily and now includes states such as Arizona, Virginia, South Carolina, North Carolina, and Georgia (which expanded its exemption for 2026). A handful of states, including California, still tax military retired pay as ordinary income with no meaningful exemption.
The honest caveat here is that a full state income-tax exemption on retired pay is necessary but not sufficient for a low overall tax burden — some no-income-tax states make it up with higher property or sales taxes, and cost of living can erase a tax advantage entirely. Run the full state-by-state comparison, including property and sales tax context, on our Military Retirement Taxes page before treating "no tax on retired pay" as the whole answer.
Factor 2: Proximity to a Base, Commissary, and Exchange
Living within a reasonable drive of an active installation keeps the commissary, the exchange, and in-person Tricare-network care realistically accessible. Retirees who settle more than an hour or two from the nearest base often find themselves defaulting to Tricare's civilian network for routine care and losing regular access to on-base grocery and retail discounts that can meaningfully offset the cost of living in a higher-tax area.
Before committing to a location, check the specific installation's status: some bases have reduced retiree services, restricted commissary hours, or no on-base pharmacy, which changes the calculus even if the base itself is nearby. A quick call to the installation's retiree services office (or the RSO covering that region) beats guessing.
Factor 3: VA Regional Office and Hospital Access
For retirees who are also VA disability compensation recipients, distance to a VA medical center and regional office affects everything from routine specialty care to how easily you can attend a Compensation & Pension exam if your rating is ever reviewed. Rural and semi-rural retirement locations often rely on the VA's community care network rather than a VA facility directly, which can mean longer authorization timelines for certain specialty referrals. If ongoing VA care is a significant part of your health plan, weigh drive time to the nearest full-service VA medical center — not just the nearest outpatient clinic — as heavily as you weigh the tax picture.
Factor 4: Retiring Overseas — What Tricare and the VA Actually Cover
A meaningful number of retirees do relocate overseas, and the Philippines is one of the most common destinations, in large part because it hosts the VA's only medical facility outside the United States — the Manila VA Outpatient Clinic — plus reliable access to the VA's Foreign Medical Program (FMP), which reimburses care for service-connected conditions received from providers overseas. That combination makes the Philippines meaningfully more accessible for VA-rated retirees than most other overseas locations, where FMP reimbursement exists on paper but there's no VA facility to anchor care around.
The coverage gap people don't expect is on the Tricare side, not the VA side. Tricare For Life does not work overseas the way it works in the United States. Overseas, Tricare is typically the primary payer rather than the secondary payer to Medicare (Medicare doesn't cover care outside the U.S. and its territories at all), you're responsible for the annual deductible and cost-shares directly, and non-network overseas providers can charge whatever they choose since there's no negotiated network rate protecting you. Medical evacuation coverage is also limited to the nearest facility capable of treating you — Tricare will not necessarily evacuate you back to the United States. Anyone seriously considering an overseas retirement should read the TRICARE For Life overseas rules directly before assuming stateside coverage habits carry over.
| Factor | Stateside | Overseas (e.g., Philippines) |
|---|---|---|
| Tricare For Life role | Secondary payer to Medicare | Primary payer; Medicare doesn't apply |
| VA facility access | VA medical centers nationwide | Only VA facility abroad is in Manila |
| Provider cost protection | Negotiated network rates | Non-network providers can charge freely |
Putting the Framework Together
Rank the four factors by what actually matters to your household, then evaluate specific locations against that ranking instead of a generic "best places" list. A retiree drawing significant VA disability compensation and living with a chronic condition should weight VA and Tricare-network access heavily, even in a higher-tax state. A retiree with no VA rating and a fully portable income might reasonably prioritize the tax-free states and accept a longer drive to the nearest base. And anyone drawn to an overseas retirement — the Philippines especially — should treat the FMP and Manila clinic access as a real advantage, while budgeting for Tricare's overseas cost-sharing rules as a real, non-optional expense rather than an edge case.
Model how your retired pay, taxes, and location interact using the Military Retirement Calculator, and check the specific state rules on our Military Retirement Taxes page before you commit to a move.