Retired service members can optimize their military retirement pay by strategically choosing states with favorable tax policies. While federal taxation is unavoidable on military retirement income, the silver lining lies in the fact that most states fully exempt such income from state taxes. However, not all states are equally favorable to retired military members; some impose partial tax breaks or, in certain cases, no exemptions at all. To avoid a state tax bill, retirees may want to steer clear of specific locations mentioned in this video, as these states still impose taxes on military retirement income to some extent.
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