Military veterans looking to settle down in their retirement years may find happiness in Texas, which just ranked No. 21 on WalletHub's annual list of the "Best and Worst States for Military Retirees."

The Lone Star State has made significant improvements over its 2024 placement, when it ranked a middling No. 28.

Ever year, WalletHub's analysts examine all 50 states and the District of Columbia based on each state's capability of providing a comfortable lifestyle for the nation's military retirees. States were ranked based on three categories: Economic environment, quality of life, and healthcare.

Texas has the sixth best economic environment for its military retirees, the report said. Factors that influenced the state's rank include housing affordability, job growth, and tax-friendliness.

The presence of veteran transition programs is also an important factor for readjusting to civilian life, the report says.

"Many retirees also face major struggles including Post-traumatic Stress Disorder, disability and homelessness, which are especially difficult to deal with during this period of economic difficulty," the report's author wrote. "These veterans must also consider how state tax policies on military benefits vary, along with the relative friendliness of different job markets and other socioeconomic factors, when choosing a state in which to settle down."

Texas still has room for improvement when it comes to improving its quality of life and healthcare for its military retirees. Texas' quality of life for veterans only ranks 32nd, while its healthcare ranked 36th.

The quality of life metric was determined based on factors like the share of veterans, the share of VA facilities per number of veterans, the quality of each state's public universities, each state's "idealness of weather," among others. The healthcare rank covered the quality of VA hospitals, the number of mental health counselors per capita, and veteran suicide rates.

South Carolina maintained the top spot as the No. 1 best state for military retirees, thanks to its multiple programs and laws that help transition veterans back into civilian life and provide retirement aid.

The remaining top five states for veterans to retire were: Maryland (No. 2), New Hampshire (No. 3), North Dakota (No. 4), and Virginia (No. 5).

Meanwhile, veterans should avoid retiring in states like Oregon (No. 51) and Washington (No. 50), which both ranked at the bottom of the list as the worst states for military retirees this year.