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Which type of climate do you prefer for retirement? Florida could be nice if you enjoy the warmer weather. Washington state...if you enjoy the cooler, damp climate. We have several friends who retired to Arizona, they were looking for dry, warm environment...Alaska is nice, but in the smaller, tourist towns you'll need some significant cash flow, Anchorage has several military bases...cold winters though.
We like cool summers.
Dense forests, rivers, lots of wild life, rural, and really low Cost-of-Living.
Offhand, unless you want to work in DC, which is frequently a viable option for military retirees, I think you can do better than Virginia. VA ain't bad, but you can find a climate with no snow, you can find states with no income tax, you can find places that are more supportive of ex-service people. Eastern WA has a mild, warm, Mediterranian type summer, and a tolerable winter. There are several distinct climate zones in Texas, both states have no income tax. Florida is a classical retirement destination, with it's own specific culture. Alabama and Mississippi have the shipyards, if that type of work appeals to you, and the winters are mild. Although the summers can be hot and humid.
Totally depends on what you want to do, and what is most important to you: low/no tax, culture, schools (although, schools being local you can find good and bad schools in every state), physical climate, access to work.
Forest makes a good case for Maine, it should work for you *if* the climate and full retirement appeal to you. I think a similar case could be made for New Hampshire. To me, the winters are just too harsh here to select it as a retirement location, but if you like snow, if you really like it, if you get the right house with good enough insulation, maybe heat with wood, it could work for you.
Full Disclosure - I am not military. But I have lived around the country and have some ideas on where I would want to live.
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Forest makes a good case for Maine, it should work for you *if* the climate and full retirement appeal to you. I think a similar case could be made for New Hampshire. To me, the winters are just too harsh here to select it as a retirement location, but if you like snow, if you really like it, if you get the right house with good enough insulation, maybe heat with wood, it could work for you.
Full Disclosure - I am not military. But I have lived around the country and have some ideas on where I would want to live.
What totally changed it for me about the snow, was getting a tractor with a front bucket.
Now snow is fun, and I never touch a shovel. I dress warm and I drive a tractor around. It is not hard work.
I have began getting phone calls from neighbors asking how much I would charge to plow their driveways.
I have been having too much fun to charge for my time. So far I only ask each of them for 5-gallons of off-road diesel fuel. So I never run out of tractor fuel.
Topography - Mountain, coastal or something in between living, take you pick. Sea level to 6,684 feet.
Climate - The average annual temperature at Southport, NC on the lower coast is nearly as high as that of interior northern Florida, while the average on the summit of Mount Mitchell is lower than that of Buffalo, New York, according to the National Climatic Data Center. Average winter snowfall over the state ranges from about inch per year on the Outer Banks and along the lower coast to about 10 inches in the northern Piedmont and 16 inches in the southern Mountains. Some of the higher mountain peaks and upper slopes receive an average of nearly 50 inches a year.
States With No Personal Income Taxes
Alaska
Florida
Nevada
New Hampshire (1)
South Dakota
Tennessee (2)
Texas
Washington
Wyoming
States Exempting Total Amount of Military & Civil Service Annuities
Alabama
Hawaii
Illinois
Kansas
Kentucky (3)
Louisiana
Massachusetts (4)
Michigan
Mississippi
New York
North Carolina (5)
Oregon (6)
Pennsylvania
Tennessee
Wisconsin (7)
(1) NH: 5% tax on interest/dividend income that exceeds $2,400 (single) or $4,800 (couple). $1,200 exemption for residents 65+, blind, or disabled prior to their 65th birthday.
(2) TN: Certain interest/dividend income taxed at 6% if it exceeds $1,250 (single) or $2,500 (couple).
(3) KY: Total amount is exempt only if retired before Jan. 1, 1998.
(4) MA: Tax rate on ordinary income including interest and dividends is 5.3%.
(5) NC: Annuities not taxed beginning with 1998 if individual had five years of government service as of Aug. 12, 1989.
(6) OR: Annuities of those who retired before Oct. 1, 1991, are not taxed. Those who retired after Oct. 1, 1991, are taxed only on that portion of the annuity attributable to government service after Oct. 1, 1991.
(7) WI: Full exemption if benefits received from a retirement account established before 1964.
As for state income taxes, keep in mind that many states have deductions and / or personal exemptions, and additional military deductions.
These deductions and exemptions summed together will show you the amount of income that you can earn before being eligible to pay state income taxes.
In my case; We start with our Federal AGI, then deduct an automatic $6,000 because I am a military retiree. Then our Standard Deduction [Married filing jointly] is $9,100; and Personal Exemptions [Married] is $5,700. A total of $20,800 is earned before we become eligible to pay state income taxes.
Just because a state has an income tax, or a state does not fully exempt military pension; does not mean that a military retiree would pay taxes in that state.
My husband will be retiring from the Navy in 3 years. We are currently in Virginia but we don't know if we want to stay here because of taxes.
I retired in 1990, lived in PA, was stationed at Ft Ritchie, MD (Now Closed). We stayed in the area 8 more years. I had a very good paying job in the DC area. Then we moved to New Mexico. I see a lot of good suggestions, I have lived in and considered Fl, Southern AL, some parts of AZ. some parts of TX, San Antonio is great (but not in July). It really depends on your personal factors. PA did not tax my military retirement.
As for state income taxes, keep in mind that many states have deductions and / or personal exemptions, and additional military deductions.
These deductions and exemptions summed together will show you the amount of income that you can earn before being eligible to pay state income taxes.
In my case; We start with our Federal AGI, then deduct an automatic $6,000 because I am a military retiree. Then our Standard Deduction [Married filing jointly] is $9,100; and Personal Exemptions [Married] is $5,700. A total of $20,800 is earned before we become eligible to pay state income taxes.
Just because a state has an income tax, or a state does not fully exempt military pension; does not mean that a military retiree would pay taxes in that state.
If I lived in Maine, I would be paying state income tax on about 31% of my retirement pay, added on top of my other working income. I guess Maine is OK if you don't make too much retirement pay (like under $21K).
If I lived in Maine, I would be paying state income tax on about 31% of my retirement pay, added on top of my other working income. I guess Maine is OK if you don't make too much retirement pay (like under $21K).
Well, yes, and if your portfolio income streams are each fully-sheltered.
... A $100K pension??? Knock of 2/3 rds and you're in my ballpark. I'm not complaining though.
Then I am confuzzled.
You said that your pension is so large that you are in the 31% tax bracket.
Then you say that your pension is $66k/year.
In Maine you subtract the first $21k, leaving you with only $39k which is clearly no where near a 30% tax bracket.
I have my E6 pension, and some apartments giving me income, my Dw works part-time, and we have a small farm income.
We do not earn enough to begin paying income taxes, so I have not seen the problem here in Maine.
I assume that folks whose pensions are closer to $500k/year might see it differently though.
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Tax on Retired Military Pay
