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Your situation is likely similar to many active-duty military families—balancing the excitement of planning for retirement while still enjoying military life. While military retirement is something to eagerly anticipate and dream about, it's important to remember that while you can binge-watch house hunting shows to find your next hometown, there are also less enjoyable aspects to consider, like taxes and healthcare.
There are also emotional and mental components of the transition you should think about. After decades of service, you’re bound to have opinions and thoughts about the lifestyle. Even if you’re ready to go, most service members have questions about what lies ahead.
Plan Early for Military Retirement
The best way to embrace significant life changes is to prepare early. Arm yourself with resources, everything from updating your healthcare records to researching the new tax bracket you’ll file in the future. Don’t forget to take advantage of free services offered on military bases, like financial planning and transition assistance.
Financial Preparedness
How far will your retirement money stretch? Plan early and re-plan often to create a new financial picture before retiring.
Financial Planning
Financial professionals specializing in military retirement strongly recommend planning for your retirement at least three years before your official date. It takes this long to make the adjustments needed for a smooth transition.
Ask for help from an experienced financial planner to customize a pre-retirement checklist. For example, you may need to adjust your Thrift Savings Plan (TSP), boost your emergency fund, or prepare for capital gains taxes.
How to Get Your Finances Ready for Military Retirement is a must-read if you’re considering retirement in the next two to three years.
Life Insurance
Your life insurance choices post-retirement will likely change dramatically. If you depend on the military’s SGLI for coverage, you’ll need a pro’s advice on switching to a different policy regardless of whether the military or an outside company offers it. Your new coverage could be costly if you don’t prepare well in advance. You should factor the costs into your overall financial plan regardless of where you buy the new insurance.
Taxes
Research the tax rates of the states you're considering moving to, such as income tax, state tax, property tax, and local sales tax. These states do not tax retirement income: Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. However, other states, like South Carolina and Maryland, exempt all or some military retirement.
Research your would-be home states carefully. Although some states do not tax retirement, they might make up for it in sales or property taxes.
For more tax information and a list of the best places to live post-retirement, read Where Should You Live After Military Retirement? Tips for Starting Your Home Buying Search and Top Veteran-Friendly Cities in the U.S.
Online Cost-of-Living Calculator
An online cost-of-living calculator is a fun place to fantasize about your new post-military location, but it’s also a reality check. Try experimenting with a couple of calculators' results for a well-rounded idea of what to expect to spend in your favorite locations. Calculators generate a comparable salary estimate and show the rise or fall of the amount you’d spend on groceries, housing, and utilities.
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Buying a Home After Military Retirement
Retirement might be the first opportunity you’ve had to purchase a home. If you are a serial house renter, do yourself a favor and understand the basics of the VA loan before retirement. It's a great perk—zero down payment, no private mortgage insurance, competitive rates, and low credit scores are welcome.
The key is finding a real estate agent and lender (look for a fellow veteran or military spouse) familiar with the process. Unfortunately, not every real estate professional knows enough about the VA loan to maximize your buying power. You’ll probably see this knowledge gap the further you move from a military community.
If you're nearing military retirement and want an estimate of how much money you'll need to live on, a military retirement calculator like the ones provided by the DoD or Military OneSource can help provide insights into your financial readiness.
Selling a Home
Whether you’re ready to say good riddance or tear up at the thought of selling your house, it’s important that you sell your property on your timeline and for the best price. If you’re working with an experienced real estate agent, you should discuss the best selling price, if you want to rent the house, how much you need for a future home down payment, and if you’ll pay during tax time. Or, if you prefer a for sale by owner transaction, brush up on your local and state real estate laws.
Location Preferences
Which relocation camp do you fall in?
- You’ve always known where you wanted to live after the military.
- You’re overwhelmed by all the possibilities and haven’t decided yet.
Either way, your location preferences affect your retirement in a number of ways. Keep these scenarios in mind when you’re planning to find a new home.
Job Location
Of course, where you and your spouse will work plays a significant role in your final location destination. You’ll either search to find new careers in your preferred town (or start a business) or widen your search to focus on the job instead of the location.
Don’t forget about remote work! Depending on your industry, you may have an option to work from home, which might feel pretty great after your years of military service.
Military Facilities
After a long active-duty career, chances are, you’ll need ongoing medical care. Although the VA medical system isn’t perfect, many retirees rely on its services and affordability. In addition, mental health might not have been a priority during your active-duty years, but retirement is the time to take advantage of your benefits and maximize your quality of life. For these reasons and more, proximity to a VA medical facility is often at the top of a retiree’s must-have list when they move.
Moving away from the conveniences on base is hard, especially if you’ve lived there for many years. Will you miss the commissary and Exchange if you live far away? Would you consider living on base as retiree renters for the safety aspects and community feel?
Consider how often you use your base benefits and if not using them affects your bank account or peace of mind. Maybe the solution is living near your favorite base. You’ll remain in the military community, but without the responsibility.
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Personal Preferences
After considering the financial and medical practicalities, what are your personal preferences? These points make a new town feel like home, somewhere you look forward to going to each day. If you haven't given it much thought, these questions might prompt some preferences you didn’t know you had.
- Are you purposely moving away from or to a new climate and weather pattern? Heat, cold, humidity, hurricanes, and tornadoes can make or break your attachment to a new destination.
- What is your town’s "walkability"? Is it important that you be able to stroll to shops, coffee houses, and cafes? Are local parks and trails nearby?
- Does the town have a church of your faith, a library, or a community center?
- Can you find employment or volunteer opportunities in the area?
- If you plan to spend time on the fairways, what are the local greens fees?
- If you heed the call of the water, what are the property prices and local slip fees?
Type of Town
Were you tired of the Pentagon’s constant hustle and bustle? Or ready to run from rural Fort Polk? Narrowing down the type of town you’re craving helps you pick the perfect spot. Remember what you loved and hated about previous locations and start there. These are some popular retirement destinations: college towns, waterfront property, urban cities, suburbia, and desert living.
Safety and Crime
Check out local crime rates around the neighborhoods in your desired location. Remember that crime happens everywhere, but some research can reveal the whole story. For example, USA.Gov’s interactive map may help pinpoint reported crimes.
Transportation
Does the city you’re considering have public transit options such as a taxi, bus, or train? Transportation costs factor into your overall budget, so don’t forget this expense if you have to pay for parking spaces or permits.
Does the area have an airport nearby? You'll need easy airport access if your retirement dreams are filled with international travel. Handy public transportation is an added perk for you and your visiting family and friends.
The Future You
If you’re seriously over the boxing, packing, and unpacking and know retirement is the last move you’ll make, don’t forget to consider the future you. Does your new home have age-in-place features like a first-floor primary bedroom and wide hallways? Or should you live near an assisted living apartment or a nursing home facility? Choosing a community with options for senior care may be an important detail to keep in mind.
Non-Traditional Retirement
Not every service member is ready to settle down, buy a forever home, and wait for their senior years. So, if you’ve dreamed of living abroad, living out of an RV, or splitting time between two hometowns each year, now is the time to try before any age-related health issues tie you to a location.
Test-driving a few locales is helpful, no matter where your future military retirement plans lead. Consider spending vacation time in a haven you’d consider living. Your visit will offer a snapshot of what life is like there.
The ideas mentioned here are suggestions to keep in mind if you’re searching for a retirement retreat. Here’s hoping you find a destination that offers the quality of life you’ve been looking forward to in a location you’ll enjoy for years to come!
By Dawn M. Smith
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