Military Retirement in Massachusetts
Complete 2026 Tax Guide for Veterans
100% Tax-Free Military Retirement
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Quick Facts: Massachusetts for Military Retirees
Massachusetts Military Retirement Tax Overview
Massachusetts provides 100% tax exemption on all military retirement pay. This includes U.S. military survivor benefits. Combined with world-class healthcare, prestigious universities, and a rich military heritage dating to the Revolutionary War, Massachusetts offers unique advantages for military retirees.
| Income Type | Tax Treatment | Notes |
|---|---|---|
| Military Retirement Pay | 100% Exempt | No age or income limits |
| VA Disability Compensation | Tax-Free | Protected by federal law |
| Survivor Benefit Plan (SBP) | Tax-Free | Included in military exemption |
| Social Security | Tax-Free | Massachusetts exempts Social Security |
| Other Pension Income | Partially Exempt | $2,000 exemption for public pensions |
| Civilian Employment | Flat 5% | Plus 4% surtax on income over $1M |
Military Installations in Massachusetts
Massachusetts has a strong military presence with Air Force, Coast Guard, and National Guard installations, plus major defense contractors.
Hanscom Air Force Base
Bedford (Boston area)
- • Air Force Life Cycle Management Center
- • Electronic Systems Center
- • MIT Lincoln Laboratory nearby
- • 3,000+ military & civilian personnel
- • Full commissary and exchange
Joint Base Cape Cod
Bourne (Cape Cod)
- • Massachusetts National Guard
- • 102nd Intelligence Wing (Air NG)
- • Camp Edwards training area
- • Coast Guard Air Station Cape Cod
- • Beautiful coastal location
Coast Guard Base Boston
Boston Harbor
- • First Coast Guard District HQ
- • Historic waterfront location
- • Multiple cutters home-ported
- • Urban living with base access
Defense Contractors
Greater Boston Area
- • Raytheon (missiles, defense systems)
- • General Dynamics
- • L3Harris Technologies
- • BAE Systems
- • MIT Lincoln Laboratory
Cost of Living in Massachusetts
Massachusetts has a higher cost of living, particularly in the Boston metro area. However, the 100% military retirement tax exemption, excellent healthcare, and high-paying defense jobs help offset these costs.
| Category | Massachusetts | National Average |
|---|---|---|
| Overall Cost of Living | 125-135 (25-35% above) | 100 |
| Median Home Price | $600,000 | $420,000 |
| Property Tax Rate | 1.14% | 1.07% |
| Healthcare Costs | 15% Above Average | 100 |
Best Massachusetts Cities for Military Retirees
Bedford/Lexington Area
Near Hanscom AFB
- • Close to Hanscom AFB
- • Excellent public schools
- • Historic Revolutionary War sites
- • Defense contractor jobs
- • Suburban family living
Cape Cod Region
Near Joint Base Cape Cod
- • Beautiful coastal living
- • Lower cost than Boston
- • Coast Guard community
- • Popular retirement destination
- • Seasonal tourism economy
Greater Boston
Metro Area
- • World-class healthcare (MGH, Brigham)
- • Major defense contractor headquarters
- • VA Boston Healthcare System
- • Cultural amenities, sports
- • Higher cost but more opportunities
Springfield/Western MA
Pioneer Valley
- • Much lower cost of living
- • VA Medical Center in Northampton
- • Westover Air Reserve Base nearby
- • Four-season recreation
- • College town atmosphere
VA Healthcare in Massachusetts
Massachusetts has excellent VA healthcare with multiple facilities and affiliations with world-renowned Boston medical institutions.
VA Medical Centers
- VA Boston Healthcare System - Jamaica Plain, West Roxbury, Brockton campuses
- VA Central Western MA - Leeds (Northampton area)
- Edith Nourse Rogers Memorial - Bedford
Community-Based Outpatient Clinics
- • Boston
- • Framingham
- • Gloucester
- • Hyannis (Cape Cod)
- • Lowell
- • New Bedford
- • Plymouth
- • Pittsfield
- • Springfield
- • Worcester
Pros & Cons of Retiring in Massachusetts
✅ Pros
- ✓ 100% military retirement tax exemption
- ✓ Social Security also tax-free
- ✓ World-class healthcare (Harvard, MGH)
- ✓ Excellent VA healthcare system
- ✓ Top-rated public schools
- ✓ Major defense contractor jobs
- ✓ Rich military history (Revolutionary War)
- ✓ Beautiful New England scenery
- ✓ Strong veteran community
❌ Cons
- ✗ Very high cost of living (25-35% above)
- ✗ Expensive housing ($600K+ median)
- ✗ Cold, snowy winters
- ✗ High taxes on other income
- ✗ Boston traffic congestion
- ✗ Limited active-duty installations
- ✗ 4% surtax on income over $1 million
Frequently Asked Questions
Does Massachusetts tax military retirement pay?
No. Massachusetts exempts 100% of military retirement pay and military survivor benefits from state income tax. This applies regardless of age or income level.
Is Massachusetts worth the high cost of living?
For veterans who value world-class healthcare, excellent education, and high-paying defense jobs, Massachusetts can be worth it. The 100% military retirement exemption helps offset costs, and western MA offers more affordable living.
What defense contractor jobs are available?
Major employers include Raytheon, General Dynamics, L3Harris, BAE Systems, and MIT Lincoln Laboratory. These companies actively recruit veterans for engineering, cybersecurity, and program management roles.
What property tax benefits do Massachusetts veterans receive?
Massachusetts offers property tax exemptions from $400 to full exemption depending on disability rating. 100% disabled veterans can receive complete property tax exemption. Additional exemptions exist for surviving spouses and Gold Star families.
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