The average enlisted servicemember retires from military duty at 43, according to a May 2014 report from the Congressional Research Service, and the average officer retires at 45. Many of them re-enter the work force, but for some it’s not easy.

Unemployment for veterans fell to 5.3% in 2014, according to the Bureau of Labor Statistics, but for younger vets who have served at any time since September 2001, it was 7.2%. The National Alliance to End Homelessness found that in January 2014, there were almost 50,000 homeless veterans living in the United States, 8.6% of the homeless population. 

Military pension benefits are only available to vets who serve a full 20 years. Servicemembers can also contribute to the Thrift Savings Plan, the defined contribution plan for federal employees, but they don’t receive a matching contribution from their employer.

“When most military servicemembers initially retire, they are young enough to start a second career,” Rod Powers, U.S. military expert for About.com, told WalletHub for its ranking of the best and worst states for military retirees. “Most people retiring from the military services after 20 years are not really able to live on military retirement pay; doing so depends upon many factors such as having a mortgage, credit card debt, a car loan and any other regular payments (such as child support or alimony). Not many people retire from the service debt-free.”

Amanda Weinstein, assistant professor of economics at the University of Akron, told WalletHub that veterans do best when they look for ways to “capitalize on their military skills and experience.”

“There are clear benefits in continuing their career in the military as a civilian and also in government jobs in general,” she said. “This also allows veterans to continue to serve their country in a different capacity. Veterans seem to earn higher wages compared to civilians in cities that are more likely to understand and appreciate the specific skill set veterans can bring to the table, specifically cities with a stronger military presence.”

WalletHub ranked states and the District of Columbia’s friendliness to military vets based on three broad categories. The economic environment category measured the state’s tax on military pensions; the number of veteran-owned businesses per 1,000 inhabitants; dollars in Defense Department contracts per 100 residents; job opportunities for vets; the number of military bases and installations per 100,000 veterans; housing affordability; cost of living; and WalletHub’s Taxpayer Ranking.

(Check out 10 Best States for Military Retirees and Advisors Who Serve(d) Tell Their Stories: Memorial Day, 2015)

The quality of life category measured the number of veterans per 100 inhabitants; the number of VA Veterans Benefits Administration facilities per number of veterans; the university system; the number of arts, leisure and recreation establishments per 100,000 inhabitants; the percentage of the population that is 40 and older; the homeless rate among veterans; and WalletHub’s Weather Ranking.

The health care category considered the number of VA health facilities per number of veterans, which was weighted twice as heavily as the other factors; the number of federal, state and local hospitals per 100,000 inhabitants; the number of physicians per 1,000 inhabitants; “patients’ willingness to recommend the veteran hospitals,” which was used as a proxy to determine the quality of VA health facilities; and emotional health.

Here are the 10 worst states for military retirees:

Portland Rose Festival Dragon Boat Race in Tom McCall Waterfront Park. (Photo: AP)

42. Oregon

  • Economic environment rank: 50
  • Quality of life rank: 40
  • Health care rank: 24

Millennium Monument at Chicago's Millennium Park. (Photo: AP)

43. Illinois

  • Economic environment rank: 46
  • Quality of life rank: 48
  • Health care rank: 20

A statue of the Spirit of Victory in Bushnell Park in Hartford. (Photo: AP)

44. Connecticut

  • Economic environment rank: 45
  • Quality of life rank: 9
  • Health care rank: 48

Fremont Street in Las Vegas. (Photo: AP)

45. Nevada

  • Economic environment rank: 15
  • Quality of life rank: 38
  • Health care rank: 51

Seaside Heights Boardwalk. (Photo: AP)

46. New Jersey

  • Economic environment rank: 48
  • Quality of life rank: 20
  • Health care rank: 44

Brooklyn Bridge with Manhattan in background.

47. New York

  • Economic environment rank: 51
  • Quality of life rank: 45
  • Health care rank: 15

Mormon Temple in Salt Lake City. (Photo: AP)

48. Utah

  • Economic environment rank: 17
  • Quality of life rank: 47
  • Health care rank: 46

Washington, D.C. Skyline.

49. District of Columbia

  • Economic environment rank: 22
  • Quality of life rank: 51
  • Health care rank: 45

Downtown Providence.

50. Rhode Island

  • Economic environment rank: 46
  • Quality of life rank: 34
  • Health care rank: 47

Lucas Oil Stadium downtown Indianapolis. (Photo: AP)

51. Indiana

  • Economic environment rank: 38
  • Quality of life rank: 50
  • Health care rank: 42

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