Retire in Texas: A Veteran's Retirement Guide

Program figures verified July 2026 — details change; confirm your scenario with us.

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

For Veterans deciding where to retire, Texas consistently ranks top-3 in the US for Veteran retirement alongside Florida and Arizona. The reasons stack: warm winters, no state income tax on military retirement pay, disabled-Veteran property tax exemptions (a total homestead exemption for 100%-rated or IU Veterans under Tax Code §11.131, plus $5,000/$7,500/$10,000/$12,000 partial-rating tiers under §11.22), 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.

Is Texas a good state to retire in for veterans?

Yes. Texas consistently ranks top-3 in the country for Veterans to retire in, alongside Florida and Arizona. The reasons stack: no state income tax on military retirement pay, a total homestead property tax exemption for 100%-rated disabled Veterans under Tax Code §11.131, three full VA Medical Centers, and large retiring-Veteran communities like Sun City Texas. VA loans stay available at any age for the home purchase.

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.

Disabled Veteran property tax exemption

Texas Tax Code §11.131 gives 100%-rated (or individually unemployable) Veterans a full property tax exemption on their residence homestead. For a $475K Houston-area home at a ~2% combined rate, that’s roughly $9,500/year in savings — $190,000 over a 20-year retirement. Veterans rated 10–90% take a fixed $5,000–$12,000 off assessed value under §11.22. Full exemption 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), little to no snow outside the Panhandle. Great for Veterans with joint pain, COPD, or other conditions exacerbated by cold.

Con: Texas summers run 95–105°F for weeks, with heavy humidity along the Gulf Coast. Vets with heat-sensitive conditions (cardiovascular, respiratory) often choose the milder Hill Country (Kerrville, Fredericksburg) instead.

Active retiring-Veteran community

Sun City Texas (Georgetown, near Austin) — 55+ purpose-built community; very high Veteran density
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:

Full property tax exemption under Tax Code §11.131 (often $8,000–$12,000+/year)
VA disability compensation (federally tax-free, $3,800+/mo at 100%, more with dependents)
Federal VA pension (if low-income + non-service-connected disability)
Texas Veterans Commission + Veterans Land Board programs (state Veterans homes, Hazlewood Act education benefits for dependents, free Super Combo hunting/fishing license at 50%+ rating)
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 homestead protection is unlimited in dollar value (limited by acreage, not price) — among the strongest asset protection in the country.

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 (~2% effective after standard homestead exemptions): ~$975/mo; his 70% rating takes another $12,000 off assessed value under §11.22 (about $23/mo more)
HOA (Sun City Texas): $250/mo
Insurance: $130/mo
Total PITI: ~$5,050/mo

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.