Military Retirement: Do You Have This Covered?
Transitioning to civilian life is just like everything else in military life. Doing it successfully takes preparation. Give yourself plenty of time to complete all the required tasks before you officially retire. There are four basic steps to take:
1. Separation requirements: Must-dos before your retirement date
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Start with the Transition Assistance Program. You'll find detailed information here about what's included and how to connect with the program for your service branch.
Pre-separation counseling: You need pre-separation counseling no fewer than 90 days before separation, but you can schedule it up to 24 months before your retirement date. Pre-separation covers the basics about medical insurance, relocation assistance, life insurance, Department of Veterans Affairs benefits and more. Military OneSource also offers the Transitioning Veterans specialty consultation to assist you in navigating this phase of military life.
Employment workshop: Attend a Transition Assistance Program employment workshop. It may not be mandatory for you - but it can be extremely useful, with information on job-search strategies, resume writing, interview skills, salary negotiation and more.
Final medical exam: Schedule your mandatory, final medical and dental exam with your installation's medical clinic 90 days before you separate.
Scheduling final move: You will have one year after leaving active duty to complete your final move. But the sooner you can schedule, the greater the chance of getting the dates you want. See below under benefits for more.
2. Plan your post-retirement budget: Know what you'll have to work with
Review your military retirement pay, benefits and expenses to plan your budget and calculate what you'll have each month.
Income: You'll receive one of three types of non-disability retirement pay:
- Final basic pay – for service members with an entry date prior to Sept. 8, 1980.
- High 36 – for service members with an entry date between Sept. 8, 1980 and July 31, 1986, or for those with dates after Aug. 1, 1986 who didn't elect REDUX.
- CBS/REDUX – for service members with an entry date after July 31, 1986 who accepted a mid-career bonus at the 15-year mark and agreed to remain active duty for at least 20 years.
Note: Service members enrolled in the new Blended Retirement System will have slightly different retirement payments than the three outlined above, including a different monthly retired pay formula, a possible lump sum payment taken at time of departure and a Thrift Savings Plan.
Payouts: Federal and state taxes will be withheld from your retirement check. Also remember medical and dental premiums, and Survivor Benefit Plan premiums.
Annual adjustments: Just like your active-duty pay, your retirement pay adjusts annually based on the cost of living to protect your income against inflation.
3. Benefits you've earned as a retiring service member
As an active duty service member, you receive a number of benefits. What happens to them when you retire?
TRICARE: Retiring service members must enroll themselves and eligible family members or risk losing TRICARE benefits. This includes family members with Medicare Part A and B.
Dental: You have access to dental insurance with the TRICARE Retiree Dental Program through Delta Dental for a monthly premium. Enroll any time after retirement on the Delta Dental website.
Final moving expense: You have one calendar year from your retirement date to use your last government-paid move anywhere within the U.S. or to your home of record outside the country. Check with your installation's Relocation Assistance Program or visit the Defense Finance and Accounting Service site for information.
Life insurance: Your Servicemembers' Group Life Insurance plan continues uninterrupted for 120 days after separation. During that time, you can convert your life insurance to Veterans' Group Life Insurance. You can still convert after 120 days, but you have to prove that you're in good health. Check out ExploreVA.gov for more.
Commissary and exchange privileges: You and your family have the same access to both facilities after retirement. The only exception – overseas privileges may be subject to a Status of Forces Agreement.
GI Bill/Education and Training: You have up to 10 or 15 years after separation to use your GI Bill (depending on the program). Get the details at your installation's education office or at Explore VA.gov.
Home loans: Find out about a Department of Veterans Affairs loan to purchase or build your dream retirement home. To qualify, you must have served at least 24 months and have an honorable or general discharge. Call 800-827-1000 or visit the VA Home Loans page.
The Survivor Benefit Plan: The plan provides a portion of your retirement pay to your spouse or other eligible person after your death. As long as you have an eligible spouse or child, you'll automatically be enrolled, and at the maximum level unless you elect otherwise. Contact your Transition Assistance Program office or the Defense Finance and Accounting Service with any questions.
4. Finally, prepare for civilian life.
You've got military life down cold. What's it like being a civilian? Don't stress, just know what to expect, and have some strategies for success.
Saying goodbye: You've been through enough moves to know what it's like to leave friends who feel more like family. But these days, social media makes it easy to keep in touch.
Job searching: Ace that interview. Get a head start. You can attend a Transition Assistance Program employment workshop on your installation as early as two years before retirement.
Miss the lifestyle? It's not as farfetched as it sounds. You've been in a tight, exclusive community with its own unique lifestyle. Look into joining a military organization that can keep you connected and in the loop on retirement issues.
Retirement is the first step to your next successful life and career. Know what's ahead, be ready, and go ahead. Enjoy.