Retiring in Arkansas as a Veteran 2026 | Benefits, Taxes & Best Cities

Quick Answer: Arkansas is one of the best states for veteran retirement in 2026: military retirement income is fully exempt from state income tax, 100% disabled veterans pay zero property taxes on their primary residence, home prices average $200,000–$250,000 in Central Arkansas, and the cost of living is 13% below the national average. Contact VA specialist REALTOR Ashley Watters at (501) 951-9200 to find your retirement home.

Retiring in Arkansas as a Veteran 2026 | Benefits, Taxes & Best Cities

Military retirement is one of life’s most significant transitions — and where you choose to retire can mean the difference of hundreds of thousands of dollars over a 20–30 year retirement period. Arkansas has quietly become one of the most veteran-friendly retirement states in the country, combining complete military retirement income tax exemption, low home prices, low property taxes, and a cost of living that makes retirement income go further than in almost any other state. This guide covers everything a veteran needs to know about retiring in Arkansas in 2026.

Why Arkansas Is One of the Best States for Veteran Retirement

1. No State Income Tax on Military Retirement Pay

Arkansas provides a complete exemption from state income tax on all military retirement pay. For a retired E-8 receiving $35,000/year in retirement income, this saves approximately $1,540/year compared to states that tax military retirement at the full rate. Over a 25-year retirement: $38,500 in tax savings on retirement income alone — and that does not include Social Security or investment income which receive separate treatment.

2. Property Tax Exemption for 100% Disabled Veterans

Veterans with a 100% service-connected disability rating are completely exempt from property taxes on their primary residence in Arkansas. On a $235,000 home with an effective tax rate of 0.63%, this represents a savings of approximately $1,480/year — $37,000 over 25 years. Veterans with partial ratings may qualify for partial exemptions through their county assessor.

3. Low Home Prices — Stretch Your Retirement Dollar

The combination of VA loan benefits and Arkansas’s low home prices is particularly powerful for retiring veterans. A veteran who sells a high-cost home in Virginia, California, or Maryland can purchase an Arkansas home outright, eliminate the mortgage entirely, and retire with zero housing cost beyond property taxes and insurance. This is not a theoretical scenario — it is one of the most common financial strategies Ashley sees among retiring military clients.

4. Cost of Living 13% Below National Average

Arkansas’s cost of living index of approximately 87 means that $50,000 in annual income provides the purchasing power of $57,500 in a state at the national average. Over a 25-year retirement, this compounding cost advantage is worth hundreds of thousands of dollars in real purchasing power.

5. VA Medical Facilities in Central Arkansas

The Central Arkansas Veterans Healthcare System (CAVHS) operates two main campuses — the Eugene J. Towbin Healthcare Center in North Little Rock and the John L. McClellan Memorial Veterans’ Hospital in Little Rock. Combined, these facilities provide comprehensive VA healthcare including primary care, specialty services, mental health, and long-term care for eligible veterans in Central Arkansas.

Arkansas vs Other Veteran Retirement States: Financial Comparison

Veterans commonly compare Arkansas to other popular retirement destinations:

  • vs Florida: Florida has no income tax (advantage), but home prices average $410,000+ and insurance runs $4,000–$8,000+/year. Arkansas wins on total cost of ownership.
  • vs Texas: Texas has no income tax, but home prices in desirable areas average $350,000–$450,000 and property taxes run 1.6–2.0%. Arkansas wins on property taxes and home prices.
  • vs Tennessee: Tennessee has no income tax, but Nashville/Knoxville home prices have surged to $380,000–$450,000. Arkansas is comparable culturally with significantly lower home prices.
  • vs South Carolina: Similar military retirement exemption, similar culture. Arkansas has lower home prices in the Central Arkansas market vs Myrtle Beach or Columbia areas.

Best Cities in Arkansas for Veteran Retirement

Hot Springs, AR — Top Retirement Destination

Hot Springs is arguably Arkansas’s premier retirement destination, military or otherwise. Located 55 miles southwest of Little Rock, Hot Springs offers Lake Hamilton waterfront living, Oaklawn Racing, Bathhouse Row Historic District, world-class fishing, and a vibrant arts scene. Home prices range from $200,000 for inland properties to $800,000+ for lakefront estates. The combination of resort-town amenities with Arkansas’s low cost of living makes it exceptional.

Conway, AR — University Town Retirement

Conway offers the intellectual and cultural amenities of a university town (UCA, Hendrix College) with excellent healthcare access, strong arts programs, and a growing restaurant scene — all 30 minutes from Little Rock and its full VA healthcare system. Home prices range from $210,000–$350,000. See our Conway AR Real Estate Guide.

Bryant/Benton, AR — Saline County Value

For retiring veterans who want top-rated schools for grandchildren, suburban amenities, and low Saline County property taxes, Bryant and Benton offer excellent value. Bryant is more suburban with new construction; Benton has more character with established neighborhoods and proximity to Hot Springs. See the Bryant and Benton guides.

Cabot, AR — Active Lifestyle Retirement

Cabot appeals to younger retirees (50s–60s) who want to stay active in a community with excellent schools for visiting grandchildren, easy access to outdoor recreation, and a strong military neighbor network from LRAFB. Home prices from $210,000–$310,000. See the Cabot AR Real Estate Guide.

Maumelle, AR — Waterfront and Outdoor Lifestyle

Maumelle sits on the Arkansas River just west of Little Rock with a planned community character, excellent parks, and direct access to water recreation. Popular with retirees seeking an active outdoor lifestyle with immediate metro access. Home prices $225,000–$400,000. See the Maumelle AR Real Estate Guide.

Using Your VA Loan in Retirement

Many veterans use their VA loan benefit for the first time (or again) in retirement. Key retirement-specific VA loan considerations:

  • Income qualification: VA lenders count military retirement pay, Social Security, and investment income for loan qualification
  • No age limit: There is no maximum age for using a VA loan
  • Funding fee waiver: Veterans with qualifying service-connected disabilities have the VA funding fee waived entirely — saving 2.15–3.3% of the loan amount
  • Reuse: If you have used a VA loan previously and paid it off, your entitlement is restored for reuse in retirement

Arkansas Veteran Benefits Summary

  • Military retirement income: 100% exempt from Arkansas state income tax
  • Property tax exemption: 100% for qualifying disabled veterans on primary residence
  • VA healthcare: Comprehensive CAVHS system with two Little Rock area campuses
  • Veterans preference: State government employment hiring preference
  • Arkansas State Veterans Home: Long-term care facilities in Fayetteville and North Little Rock
  • Arkansas Department of Veterans Affairs: Claims assistance, burial benefits, veteran ID cards
Ready to Retire in Arkansas? Ashley Watters is a military spouse and VA loan specialist who has helped retiring service members find their perfect Arkansas home. Whether you want a lakefront property in Hot Springs, a Cabot neighborhood with great schools for grandchildren, or a zero-cost retirement through a cash purchase from your home equity, Ashley can make it happen. Call (501) 951-9200.

Contact Ashley Watters — Arkansas Veteran Retirement Specialist

Ashley Watters | REALTOR® | eXp Realty
Phone/Text: (501) 951-9200
Website: arkansashousesearch.com

PCSing from South Carolina? Arkansas vs South Carolina 2026 — lower income tax (4.4% vs 6.4%), full military retirement exemption vs SC partial, lower home prices than Charleston.
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Arkansas Homebuying Guide: How to Buy a Home in Arkansas 2026 — 8-step process, VA loan walkthrough, closing costs, ADFA programs, and Central Arkansas market pricing explained.
Near Conway: Greenbrier AR Real Estate 2026 — top-rated schools, $220K–$310K median, small-town feel with Conway 10 minutes away. USDA loans available.
Rural Living Near Conway: Vilonia AR Real Estate 2026 — $195K–$290K median, acreage homes, top schools, USDA $0-down loans available in most of Vilonia.
Rural Living Near LRAFB: Ward AR Real Estate 2026 — 20 min from Little Rock AFB, Cabot schools, $185K–$275K median, USDA & VA $0-down loans available.
Moving from Indiana? Arkansas vs Indiana 2026 — lower home prices ($230K vs $265K median), lower property taxes (0.63% vs 0.85%), military retirement fully exempt in both states.
Moving from Michigan? Arkansas vs Michigan 2026 — Arkansas property taxes are HALF of Michigan (0.63% vs 1.54%), milder winters, full military retirement exemption. Save $2,275/year on taxes.
PCSing from Virginia? Arkansas vs Virginia 2026 — NOVA homes average $650K vs Arkansas $230K. Full military retirement exemption, lower income tax, fraction of NOVA property taxes.
Moving from North Carolina? Arkansas vs North Carolina 2026 — lower property taxes (0.63% vs 0.78%), full military retirement exemption, lower home prices than Raleigh/Charlotte.
Moving from Ohio? Arkansas vs Ohio 2026 — Ohio property taxes are 2.5x higher (1.59% vs 0.63%), Ohio taxes military retirement income, Arkansas fully exempts it. Save $2,400+/year.
PCSing from JBLM or NAS Kitsap? Arkansas vs Washington State 2026 — Tacoma homes $460K+ vs Arkansas $230K. Save $1,400+/month in housing costs. Military retirement untaxed in both states.
Moving from Illinois? Arkansas vs Illinois 2026 — Illinois property taxes are 3.5x higher (2.23% vs 0.63%). Save $4,000+/year. Military retirement fully exempt in Arkansas; taxed in Illinois.
Moving from California? Arkansas vs California 2026 — CA homes average $850K vs Arkansas $230K. CA income tax up to 13.3% vs AR 4.4%. Military retirement exempt in both. Massive affordability difference.
Moving from Kansas? Arkansas vs Kansas 2026 — Kansas property taxes 2.2x higher, Kansas taxes military retirement at 5.7% while Arkansas fully exempts it. Fort Riley/Leavenworth families welcome.
Moving from New York? Arkansas vs New York 2026 — NY has the highest property taxes in the US (1.73–2.7%); AR is 0.63%. NY taxes military retirement; AR fully exempts it. Fort Drum families save $4,600+/year.
Moving from New Jersey? Arkansas vs New Jersey 2026 — NJ has the HIGHEST property taxes in the US (2.47% vs AR 0.63%). Save $6,000+/year. Military retirement fully exempt in Arkansas.
Arkansas vs Tennessee: Arkansas vs Tennessee 2026 — TN has no income tax; AR wins on property taxes (0.63% vs 0.71%) and home prices vs Nashville. Both fully exempt military retirement. Fort Campbell to LRAFB: 5.5 hours.
Full Cost Breakdown: Cost of Living in Central Arkansas 2026 — housing, property taxes, groceries, utilities, childcare, and income tax — all 10–12% below national average. Military retirement tax-free.
VA Loan Specialist: VA Loan Benefits in Arkansas 2026 — $0 down, no PMI, lower rates, seller-paid closing costs. Disabled veterans: 100% property tax exemption. Ashley Watters, (501) 951-9200.
LRAFB Community Guide: Living Near Little Rock Air Force Base 2026 — best neighborhoods (Jacksonville, Cabot, Ward), 2026 BAH rates, on-base housing, schools, and VA loan info.
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North Little Rock Guide: North Little Rock AR Real Estate & Homes 2026 — Argenta Arts District, Burns Park, Arkansas River Trail access, and median prices $165K–$220K. VA loans welcome.
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PCS to LRAFB Guide: PCS Move to Little Rock AR 2026: Complete Military Relocation Guide — 2026 BAH rates, best off-base communities, VA loan steps, school districts, and on-base housing info.
Beebe Community Guide: Beebe AR Real Estate & Homes 2026 — most affordable LRAFB community, medians $150K–$185K, land available, VA loan ideal, 35 min to base.
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Jacksonville Community Guide: Jacksonville AR Real Estate & Homes 2026 — closest city to LRAFB (5–10 min to gate), medians $140K–$200K, VA loans, JNPSD schools.