Texas as a retirement destination for Veterans

Mike Certo · Cornerstone First Mortgage · NMLS #260555 · Updated May 30, 2026

TX consistently ranks top-3 in the US for Veteran retirement alongside Florida + Texas. The reasons stack: warm winters, no state tax on military retirement pay, expanded disabled-Veteran property tax exemption (2026), three full VA Medical Centers, and a deep retiring-Veteran community across multiple TX regions. Here's the TX-specific case + the VA loan side of moving here in retirement.

Why TX ranks top-3 for Veteran retirement

State tax treatment of military retirement

Texas fully exempts military retirement pay from state income tax. This applies to:

Active-duty retirement pension
Reserve component retirement pay
VA disability compensation (already federally tax-free)
Survivor Benefit Plan (SBP) payments

A 20-year-retired O-5 with ~$60K annual pension would owe ~$3,500 in CA state tax or ~$3,000 in OR state tax on that income. TX owes $0. Over a 20-year retirement, this is $60K+ in cumulative savings.

2026 HB 2792 property tax exemption

The expanded Texas disabled Veteran property tax exemption (effective Feb 2026) gives 100%-rated Veterans a full property tax exemption on their primary residence. For a $475K Houston home, that's roughly $2,400/year in savings — $48,000 over a 20-year retirement. Partial-rated Veterans get proportional exemptions. Full HB 2792 guide.

Three full VA Medical Centers

Olin E. Teague Veterans Medical Center (Temple) — full hospital serving Fort Hood/Killeen and Central Texas (Central Texas VA Health Care System).
Audie L. Murphy VA Medical Center (San Antonio) — full hospital serving JBSA and South Texas (South Texas Veterans Health Care System).
El Paso VA Health Care System (El Paso) — serves Fort Bliss and far West Texas; partners with William Beaumont Army Medical Center.

Plus 25+ Community-Based Outpatient Clinics (CBOCs) across the state. TX Veterans typically have a VA primary-care option within 30 minutes of their home.

Climate trade-offs

Pro for retirees: Warm winters (Houston avg January low 45°F), virtually no snow in lowlands, very low humidity year-round. Great for Veterans with joint pain, COPD, or other conditions exacerbated by cold.

Con: Houston + Wichita Falls summers hit 110°F+ for weeks. Vets with heat-sensitive conditions (cardiovascular, respiratory) often choose mountain communities (Abilene, Lubbock) instead.

Active retiring-Veteran community

Sun City Texas (Georgetown, near Austin) — 55+ purpose-built community; very high Veteran density
Sun City Texas (Georgetown) — 55+ resort community with strong Veteran population
Encanterra (San Tan Valley) — 55+ Shea Homes community
Sun Lakes (Austin) — older but established 55+ community
Abilene — non-age-restricted but heavy retiring-Veteran concentration (#3 destination after Sun Cities)
Kissing Tree (San Marcos) — golf + active-adult oriented

VA loan use in retirement

A common misconception: VA loans are only for active-duty + young Veterans. Reality — VA loans are available to any eligible Veteran regardless of age, including those decades into retirement. Many retiring Veterans actively use VA financing to:

1. Right-size from a larger family home to a retirement home

Sell the suburban 4-bed where the kids grew up; buy a 2-bed Sun City patio home. Cash from sale covers most of the new home; VA loan covers the rest at $0 down.

2. Convert proceeds into a retirement portfolio

Some retiring Veterans prefer to keep sale proceeds invested + use VA's $0-down to use into the new home. This works particularly well when:

Pension + Social Security + VA disability comfortably covers PITI
Retirement portfolio earns more than the VA loan rate (typical at market returns above typical VA rates)

3. Buy and improve aging-in-place features

VA loans can be used for purchase-with-renovation. TX retiring Veterans often want:

Single-story or first-floor primary suite
Wider doors + lower thresholds
Walk-in shower with grab bars
Reinforced wall blocking for future mobility equipment
Generator-ready electrical for TX summer outage backup

These improvements can be financed as part of the purchase loan via VA renovation financing programs.

4. Use entitlement that was tied up earlier

Many Veterans used VA financing 20-30 years ago + assumed entitlement was permanently used. Reality — once you sell or pay off the original VA loan, entitlement restores. A Veteran who used VA in 1995 + paid off in 2018 likely has full entitlement available now.

Disabled Veteran benefits stack in TX retirement

For 100%-rated disabled Veterans, TX-specific benefits stack:

HB 2792 property tax exemption (~$2,000-$8,000/year)
VA disability compensation (federally tax-free, varies $4,098+/mo for 100% w/ spouse + 2 kids)
Federal VA pension (if low-income + non-service-connected disability)
TX Department of Veterans' Services programs (state Veteran home access, education benefits for dependents, hunting/fishing license discounts)
Cornerstone NMLS + TX Down Payment Assistance (DPA) programs still available even in retirement (no age cap on TX DPA)

Considerations specific to TX retiring Veterans

Snowbird-to-resident transition

Many retiring Veterans first arrive as snowbirds. Mike has a dedicated guide for converting snowbird to full-time + the VA loan implications: Snowbird to TX resident.

Wildfire + insurance in mountain communities

If retiring to Abilene, Lubbock, Kerrville, or Fredericksburg, insurance is now meaningfully more expensive + harder to obtain. Factor this into retirement budget. Full guide.

Specialty medical care

Houston, Dallas, and San Antonio VA medical centers have full specialty care including cardiology, oncology, neurology, and mental health. Smaller West Texas and Hill Country clinics cover the basics and refer out for complex care. Veterans in outlying towns often accept a 1-2 hour drive for specialty appointments.

Estate planning

TX has community property law (different from common-law states). If transitioning from a common-law state (most non-Western states), revise estate documents. TX has homestead protection up to ~$250K — important for asset protection in retirement.

Spouse + survivor considerations

Surviving spouse VA benefits include Dependency and Indemnity Compensation (DIC) — tax-free monthly payments to surviving spouses of service-connected disabled Veterans. TX also has surviving spouse property tax exemptions worth checking.

Real example — O-5 retired moving from Virginia

O-5 retired, family-of-2 (wife), 70% disability rating, $76K annual military retirement + $2,089/mo VA disability + $2,600/mo Social Security. Selling Virginia home for $730K (mortgage-free).

Looking at San Antonio + Killeen + Sun City Texas options
Picks $585K patio home in Sun City Texas (55+ section)
VA loan: $585K, $0 down (chose to keep VA cash flow rather than put down + use sale proceeds for retirement portfolio)
70% disability = VA funding fee WAIVED
Monthly P&I (rate-dependent — current quote available on request): $3,698
Bexar property tax (0.51%): $249/mo (currently — HB 2792 reduces this to 30% remaining = $75/mo within first year)
HOA (Sun City Texas): $250/mo
Insurance: $130/mo
Total PITI: ~$4,150/mo at year 1; ~$3,975/mo after HB 2792 applies

Income covers comfortably with significant surplus for travel + retirement lifestyle. VA cash-flow retained for retirement portfolio.

Frequently asked questions

Is there an age limit on VA loans?

No. VA explicitly prohibits age discrimination in loan approvals. Income (pension, Social Security, VA disability) + credit drive qualification, not age.

Yes. Both are tax-free + count fully toward DTI. Most lenders gross-up VA disability 25% for DTI purposes (which boosts your qualifying amount). See gross-up calculator.

No. TX exempts Social Security from state income tax for all residents.

Should I retire in Houston or somewhere cooler?

Climate preference is personal. Many Veterans do "summer Abilene / winter Houston" with two homes — though that's expensive. Single-home retirees increasingly choose Abilene or New Braunfels for cooler summers without giving up VA Medical access.

What about the Veterans' Affairs cemeteries in TX?

TX has Houston National Cemetery (south Houston), Abilene National Cemetery, and the National Memorial Cemetery of Texas (north Houston). Free interment for eligible Veterans + spouses.

Retiring to TX and want a tailored walkthrough? Mike's worked with dozens of out-of-state retiring Veterans moving to TX. Free 15-minute consult.