Retiring in Arkansas as a Veteran 2026 | Benefits, Taxes & Best Cities
VA HOME LOANS · CENTRAL ARKANSAS
Retiring in Arkansas as a Veteran 2026
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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
Contact Ashley Watters — Arkansas Veteran Retirement Specialist
Ashley Watters | REALTOR® | eXp Realty
Phone/Text: (501) 951-9200
Website: arkansashousesearch.com
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There is no age limit for using a VA loan, and retirement income counts for loan qualification. Veterans with qualifying disabilities have the VA funding fee waived. If you have previously used and paid off a VA loan, your entitlement can be restored for reuse.
Ashley Watters specializes in VA loan purchases for retiring veterans.”}},{“@type”:”Question”,”name”:”What VA medical facilities are in Central Arkansas?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:”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.
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