Serving in the military is more than a career—it’s a way of life. Transitioning into the civilian world when you retire can be a big change, but preparing early and planning ahead can make it easier.

Here’s some insight into the process to help you get started.

The Importance of Planning Ahead for Military Retirement

Military retirees often must navigate shifts such as managing healthcare coverage changes and understanding the benefits available through military retirement systems. Early planning allows retirees to build savings strategically, maximize benefits, and prepare for these lifestyle adjustments, ensuring a smoother, more financially secure transition when the time comes to leave active duty.

Understanding Retirement Benefits

Military retirement benefits offer a comprehensive system designed to support servicemembers as they transition to civilian life. When planned for and used effectively, these benefits provide military retirees with a robust foundation for long-term financial stability and healthcare security. The primary benefits include:

1. Military Pension: The military pension, or retiree pay, is a key component for those who serve long enough to qualify. Under the Legacy High-3 and Blended Retirement System (BRS), retirees receive a monthly pension based on their rank and years of service.

2. Thrift Savings Plan (TSP): The TSP is a government-sponsored retirement savings plan similar to a 401(k). It allows military members to contribute a portion of their basic pay, and under the BRS, the government matches these contributions up to 5%. The TSP provides options for both traditional (pre-tax) and Roth (post-tax) contributions, helping members build a personalized retirement fund that can grow through investments.

3. Healthcare Options (TRICARE): Military retirees have access to healthcare benefits through TRICARE, which offers affordable coverage options for retirees and their families. Depending on the retiree’s status and location, they can choose from various TRICARE plans to help them manage healthcare costs and maintain consistent medical care as they transition out of active duty.

Setting Long-Term Financial Goals

Setting clear, long-term financial goals for retirement can help servicemembers with:

• Clarity and Focus: Clear financial goals provide direction and purpose, making it easier to create actionable steps for saving, investing, and managing debt.
• Adapting to Lifestyle Changes: The transition to civilian life often involves significant lifestyle changes. Long-term planning helps prepare for these changes, ensuring that military members and their families are financially secure.
• Achieving Financial Freedom: Ultimately, setting and working toward long-term financial goals early on gives military retirees the freedom to pursue their interests, whether it’s a fulfilling new career, entrepreneurship, or enjoying a comfortable, well-earned retirement.

Building a Retirement Timeline

Building a retirement timeline helps ensure that key steps are taken at the right time, maximizing benefits and minimizing the stress of last-minute decisions. Here are some critical milestones (and when they should occur) to include in your retirement timeline:

• Enroll in Retirement Savings Programs: Do this as early as possible, ideally within the first few years of service.
• Meet with a Financial Advisor: At least 10 years before retirement, have your first meeting and then follow-up every few years to adjust your plan.
• Engage in Transition Support Services: 3-5 years before retirement, begin preparing for your civilian employment.
• Finalize Healthcare Plans: 1-2 years before retirement, settle on your healthcare plans to ensure seamless coverage for continuity of care.

Preparing for Civilian Life After Military Service

Military retirement is more than financial planning; it also involves navigating significant lifestyle changes. Beyond securing a steady income through pensions and savings, you must prepare for finding new employment or career paths, which may involve getting new certifications or additional education. There are many organizations and programs (PM ProLearn and Boots to Books, for example) available to help you begin coursework toward new certifications while you’re still in service and after retirement.

Transitioning to civilian life often requires adapting to a new routine, managing healthcare changes, and integrating into a civilian community. Additionally, for a smooth and fulfilling post-military experience, you’ll want to build a strong support network, including connecting with veteran organizations and maintaining relationships.

Transition Assistance Programs & Resources

Military members have access to several resources designed to support their transition to civilian life, including:

• Transition Assistance Program (TAP): TAP is a comprehensive program offering workshops and counseling sessions on critical topics such as resume-building, job search strategies, and career development. It provides training on translating military skills into civilian qualifications, exploring educational opportunities, and preparing for interviews.
• Veterans Employment Center & Hire Heroes USA: These groups offer personalized job placement assistance, career coaching, and networking opportunities with employers seeking Veteran talent.
• Post-9/11 GI Bill: This legislation helps Veterans pursue higher education and certifications to enhance their skills and employability.

Exploring Career Opportunities & Education

Retired military members have a variety of career paths available to them, many of which leverage their skills and leadership experience gained during service. Popular options include law enforcement, government contracting, project management, and corporate leadership. Additionally, fields such as cybersecurity, logistics, and human resources are well-suited for those with specific technical or organizational skills gained from military service.

Using GI Bill funds for further education or vocational training can significantly enhance your career opportunities. The Post-9/11 GI Bill provides financial support for tuition, housing, and books, enabling Veterans to earn degrees, certifications, or technical skills in high-demand fields.

Maintaining Physical & Mental Health

Staying physically and mentally healthy during the transition to civilian life is essential for military retirees to maintain overall well-being and adapt to new routines.

Accessing veteran healthcare services, such as those provided by the VA and TRICARE, is a critical first step. These services offer comprehensive healthcare coverage, including mental health support and counseling programs designed specifically for Veterans. TRICARE active duty coverage ends with your retirement date. Be sure to contact TRICARE within 90 days to sign up for benefits as a retiree. You will also need to sign up for VA Healthcare which is separate from your VA Disability Benefits.

Engaging with support groups or Veteran organizations can also be valuable, as they provide a sense of community and offer resources for managing the emotional aspects of transitioning from military to civilian life. Connecting with others who share similar experiences can ease the adjustment period and foster a strong support network.

Maintaining a fitness routine is equally important, as physical activity has proven benefits for mental health, stress management, and overall physical well-being. Incorporating regular exercise, such as running, weight training, or participating in group classes, can help maintain the discipline and structure that many servicemembers value.

Prepare for Retirement with AAFMAA

Financial planning is always important, but especially so when preparing for military retirement. Our team of professionals, who have extensive experience working with servicemembers, will be happy to answer any questions you have. Get started by downloading our retirement transition timeline or contact us today to get started on securing a bright financial future.