Colorado as a retirement destination for Veterans
Mike Certo · Cornerstone First Mortgage · NMLS #260555 ·
Program figures verified July 2026 — details change; confirm your scenario with us.
Colorado is a popular retirement destination for Veterans. The reasons stack up: a four-season climate with low humidity, a state deduction on military retirement income, the disabled-Veteran property-tax exemption, VA care anchored by the Rocky Mountain Regional VA Medical Center in Aurora, and a deep retired-military community across the Front Range. Here's the CO-specific case + the VA loan side of moving here in retirement.
Why CO ranks top-3 for Veteran retirement
State tax treatment of military retirement
Colorado offers a state income tax deduction on military retirement pay, with the amount set by your age:
- Under age 55: up to $15,000 of military retirement income deducted
- Ages 55-64: up to $20,000 (the general pension/annuity subtraction)
- Age 65 and older: up to $24,000
VA disability compensation is already federally tax-free. Colorado levies a flat state income tax of roughly 4.4% in 2026.
The deduction meaningfully lowers a retiree's Colorado tax bill, and residents 65 and older can also fully deduct Social Security. A licensed Colorado tax professional can run your exact numbers.
Colorado disabled-Veteran property tax exemption
Colorado's disabled-Veteran property tax exemption gives a 100% permanently and totally service-connected disabled Veteran an exemption equal to 50% of the first $200,000 of the home's actual value (a maximum of $100,000 of value exempted). On a typical Colorado home that's roughly $450-$650 a year. 100% permanent-and-total or VA individual-unemployability status qualifies (Amendment G, effective tax year 2025); lower schedular ratings without TDIU do not. Full disabled-Veteran tax guide.
Three full VA Medical Centers
- Rocky Mountain Regional VA Medical Center (Aurora) — full hospital and specialty care; serves the Denver metro and most of Colorado
- PFC Floyd K. Lindstrom VA Clinic (Colorado Springs) — large outpatient clinic serving the Pikes Peak region; refers complex care to Aurora
- VA Western Colorado Health Care System (Grand Junction) — serves the Western Slope
Plus Community-Based Outpatient Clinics (CBOCs) across the state in VISN 19. Most Colorado Veterans have a VA primary-care option within a reasonable drive.
Climate trade-offs
Pro for retirees: Four real seasons, very low humidity, and about 300 days of sunshine a year. Mild summers (Denver July highs near 88°F) make the heat far easier than the Desert Southwest.
Con: Winters are cold and snowy, especially at altitude. Veterans who want milder winters often look at the Western Slope (Grand Junction) or southern Colorado (Pueblo, Cañon City).
Active retiring-Veteran community
- Anthem Ranch by Del Webb (Broomfield) — large 55+ active-adult community north of Denver
- Heritage Eagle Bend (Aurora) — 55+ golf community near Buckley SFB
- Heritage Todd Creek (Thornton) — 55+ Del Webb community in the north metro
- The Lakes at Centerra (Loveland) — Northern Colorado active-adult living
- Colorado Springs and Monument — not age-restricted, but a heavy retired-military concentration near the bases
VA loan use in retirement
A common misconception: VA loans are only for active-duty + young Veterans. Reality — VA loans are available to any eligible Veteran regardless of age, including those decades into retirement. Many retiring Veterans actively use VA financing to:
1. Right-size from a larger family home to a retirement home
Sell the suburban 4-bed where the kids grew up; buy a 2-bed patio home in an active-adult community. Cash from the sale covers most of the new home; the VA loan covers the rest at $0 down.
2. Convert proceeds into a retirement portfolio
Some retiring Veterans prefer to keep sale proceeds invested + use VA's $0-down to use into the new home. This works particularly well when:
- Pension + Social Security + VA disability comfortably covers PITI
- Retirement portfolio earns more than the VA loan rate (typical at market returns above typical VA rates)
3. Buy and improve aging-in-place features
VA loans can be used for purchase-with-renovation. CO retiring Veterans often want:
- Single-story or first-floor primary suite
- Wider doors + lower thresholds
- Walk-in shower with grab bars
- Reinforced wall blocking for future mobility equipment
- Generator-ready electrical for CO summer outage backup
These improvements can be financed as part of the purchase loan via VA renovation financing programs.
4. Use entitlement that was tied up earlier
Many Veterans used VA financing 20-30 years ago + assumed entitlement was permanently used. Reality — once you sell or pay off the original VA loan, entitlement restores. A Veteran who used VA in 1995 + paid off in 2018 likely has full entitlement available now.
Disabled Veteran benefits stack in CO retirement
For 100%-rated disabled Veterans, CO-specific benefits stack:
- Colorado disabled-Veteran property tax exemption (50% of the first $200,000 of value for 100% P&T)
- VA disability compensation (federally tax-free, varies $4,098+/mo for 100% w/ spouse + 2 kids)
- Federal VA pension (if low-income + non-service-connected disability)
- CO Department of Veterans' Services programs (state Veteran home access, education benefits for dependents, hunting/fishing license discounts)
- Cornerstone NMLS + CO Down Payment Assistance (DPA) programs still available even in retirement (no age cap on CO DPA)
Considerations specific to CO retiring Veterans
Snowbird-to-resident transition
Choosing between Colorado regions matters as much as the loan itself. See the Colorado metro comparison for Colorado Springs vs Denver-Aurora vs Northern Colorado before you settle on an area.
Wildfire + insurance in mountain communities
If retiring into the Front Range foothills or a mountain town, wildfire insurance is meaningfully more expensive and harder to obtain, and the Denver/Springs hail belt drives roof costs. Factor this into your retirement budget. Full guide.
Specialty medical care
The Rocky Mountain Regional VA Medical Center in Aurora provides full specialty care including cardiology, oncology, neurology, and mental health. The Colorado Springs and Grand Junction facilities handle most needs and refer complex cases to Aurora. Mountain-town Veterans often accept a drive for specialty appointments.
Estate planning
Colorado is a common-law (equitable-distribution) state, not a community-property state, so review your estate documents when you relocate here. Colorado also offers a homestead exemption that protects a portion of home equity (up to about $250,000, and more for owners who are elderly or disabled) — worth knowing for asset protection in retirement.
Spouse + survivor considerations
Surviving spouse VA benefits include Dependency and Indemnity Compensation (DIC) — tax-free monthly payments to surviving spouses of service-connected disabled Veterans. CO also has surviving spouse property tax exemptions worth checking.
Real example — O-5 retired moving from Virginia
O-5 retired, family of 2, 70% disability rating, $76K annual military retirement plus VA disability and Social Security, relocating to Colorado with substantial home-sale proceeds.
- Looking at active-adult options around Broomfield, Aurora, and Loveland
- Picks a $585K patio home in a 55+ community
- VA loan: $585K, $0 down (chose to keep VA cash flow rather than put down + use sale proceeds for retirement portfolio)
- 70% disability = VA funding fee WAIVED
- Monthly P&I (rate-dependent — current quote available on request): $3,698
- Property tax (~0.55% effective): note the disabled-Veteran exemption applies only at a 100% permanent and total rating; at 70% this Veteran does not yet qualify
- HOA (active-adult community): $250/mo
- Insurance: $130/mo
- Total PITI drops once the Colorado disabled-Veteran exemption is applied
Income covers comfortably with significant surplus for travel + retirement lifestyle. VA cash-flow retained for retirement portfolio.
Frequently asked questions
Is there an age limit on VA loans?
No. VA explicitly prohibits age discrimination in loan approvals. Income (pension, Social Security, VA disability) + credit drive qualification, not age.
Can I use VA disability + Social Security as qualifying income?
Yes. Both are tax-free + count fully toward DTI. Most lenders gross-up VA disability 25% for DTI purposes (which boosts your qualifying amount). See gross-up calculator.
Does CO tax Social Security?
Colorado lets residents 65 and older fully deduct Social Security from state taxable income, and offers a partial deduction at 55-64.
Should I retire in Denver or somewhere with milder winters?
Climate preference is personal. Colorado has cool, dry summers across the Front Range; retirees who want milder winters often look at the Western Slope (Grand Junction) or southern Colorado (Pueblo) without giving up VA medical access.
What about the Veterans' Affairs cemeteries in CO?
Colorado has Fort Logan National Cemetery in Denver and Pikes Peak National Cemetery in Colorado Springs, with free interment for eligible Veterans and spouses.
Retiring to CO and want a tailored walkthrough? Mike's worked with dozens of out-of-state retiring Veterans moving to CO. Free 15-minute consult.