The Golden State is one of the worst states for military retirees to live out their golden years, according to a new study published May 22 by the personal finance company WalletHub.
California’s economic environment was the biggest factor for the low ranking, placing it last among all states, including Washington, D.C. The state also ranked first for least-affordable housing, according to the report. But that wasn’t the only issue facing military retirees in the state.
The study also found the state had one of the largest populations of homeless veterans, had the second-fewest job opportunities for retired military veterans, and the 49th fewest veteran-owned businesses.
However, the study found the state offered a higher quality of life than most other states, taking ninth place in the category.
Florida was ranked the best state for retired military to settle, followed by South Carolina, and Virginia. North Dakota offered the best economic environment, and Maryland offered the highest quality of life, while Minnesota took top prize for the best health care, according to WalletHub.
The typical enlisted person makes about half of their salary in retirement, which equates to about $30,000 to $35,000 a year. Officers receive from $60,000 to $70,000 on average, according to U.S. News & World Report.
That’s well below what it takes for the average Californian to keep their heads above water financially. A Lending Tree report published last month revealed the state was home to eight of the largest U.S. cities where families can earn $100,000 and still be broke.
A family of three in San Jose making six figures, for instance, would be about $1,493 in debt each month after paying for housing and transportation, according to Lending Tree, a national lending marketplace.
The average price for a rental in the state reached $2,950 on May 20, compared to Florida’s average of $2,471, according to the national real estate company Zillow.
The cost to buy a home in California increased slightly in April, apparently unaffected by high mortgage rates. The median home price in the state was about $815,300 mainly due to market competition, according to the California Association of Realtors.
California also taxes military pensions. Former military making a pension of $35,000 in the state would pay about $3,100 in personal income taxes, according to Forbes.
Most states don’t tax military retirements, and six more decided to discontinue doing so last year. Military retirees in California and Washington, D.C., are the only ones that are still fully taxed.
This can be burdensome, some experts say.
“Income taxes are an immoral burden on the entire economy,” Abir Mandal, assistant professor of economics at Tillman School of Business, told WalletHub. “Veterans who have already given their lives and well-being to the government should not be subject to further such penalties.”
Despite the low rankings, Carl Castro, a retired Army colonel and social work and psychology professor at the University of Southern California, said veterans should consider more personal reasons for choosing a state to retire.
“Veterans should retire in a [s]tate that brings them the most joy and comfort,” Castro told WalletHub. “Proximity to the family is the most critical.”
He also said another important consideration should be the presence of a veteran’s hospital if that’s where the retiree plans to get their health care. California ranked second in the nation for the number of Veterans Affairs facilities per number of veterans, only topped by New York. Washington, South Carolina, the District of Columbia, Delaware, and Rhode Island had the fewest.
Leisure activities are also important, according to Castro, including opportunities for hunting, fishing, or indoor activities.
“This is a very personal decision. Veterans should focus on doing something they enjoy regardless of what that something is,” he said.
California also has few veterans per capita who have chosen to live in the state. According to WalletHub, the state ranks 48 out of 51. Utah, New York, and New Jersey ranked lower.
States with the most veterans per capita are Alaska, Maine, Montana, Virginia, and Wyoming, the study showed.
California tied with Oregon and the District of Columbia for having the largest number of homeless veterans. Arkansas, Virginia, and New Mexico respectively had the lowest percentage of unhoused former military.
The study also compared Democratic Party, or “blue” states against Republican or “red” states and found that on average, Republican states were more friendly towards military retirees. The states were designated blue or red according to how they voted in the 2020 presidential election.
