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  One of the advantages of a career in the military is that you can begin collecting retirement pay immediately after you retire despite your age. As stated on Military.com, you could begin receiving retirement pay as early as 37-years old. Also, as the cost of living increases, so does your retirement pay. Finally, a number of states--in the eastern, western and middle part of the country--do not charge taxes on military retirement.
  
  

Massachusetts, Pennsylvania, New York

• Massachusetts, Pennsylvania and New York exempt military retirement pay from state and federal taxes. However, in Massachusetts, if you work or receive other income, your military retirement pay will be considered when you file taxes. In contrast, Pennsylvania does not consider post-military pay for tax purposes if another form of income also exists. Still, individuals with this circumstance must file tax form PA40. In each of these states, military retirement pay is distinct and unrelated to military disability pay.
  
  

Michigan, Wisconsin, Kansas

• The states of Michigan, Wisconsin and Kansas also exempt military pay from state and federal taxes. The state of Michigan has established stipulations regarding survivor benefits. These benefits are also exempt from taxes if, in fact, the pay is classified as military compensation and military retirement pay. As with Pennsylvania, Wisconsin does not consider military retirement pay if there is supplemental nonmilitary pay. However, those who are not residents of the state but who receive income from an entity in the state must file form 1NPR.
  
  

South Dakota, Nevada, Oregon

• In the western part of the country, South Dakota, Nevada, Oregon, are states that do not tax military retirement pay. South Dakota and Nevada provide no additional stipulations on this pay. However, in Oregon, according to Military.com, "retirees who worked for the federal government prior to Oct. 1, 1991, but who did not retire until after that date, must continue to pay taxes on the portion of their federal pensions attributable to federal service after Oct. 1, 1991." Plus, those who are age 62 or older as of December 31, 2002 can claim a tax credit on their pay depending on their income levels ($22,500 limit if you are single and $45,000 if you are married filing jointly.)