When separating from the military, whether retiring or not, there are a lot of questions and unknowns when it comes to money. The military provides benefits that are added expenses in the civilian world and it’s understandable to be worried about them when one is no longer active duty.
I would guess that this is the benefit everyone worries about most. If you are retiring from the military, even medically, you are eligible for Tricare. Some things are no longer included, options may change depending on where you live, and there are costs involved, but it takes some of the worry out. You can find out more on the Tricare website. If you are separating from the military, but not retiring, look into the Transitional Assistance Management Program (TAMP). TAMP provides 180 days of premium free transitional healthcare benefits, at a cost, after regular Tricare benefits end for the servicemember and their dependents. This should give you enough time to either find a job with healthcare benefits or look into buying your own insurance.
Many people choose to move back home after their active duty time ends. After PCSing so many times, you think moving one last time will be a breeze. How much of that is on you to cover though? In most cases, you have up to 1 year to make a final move on the government’s dime. This should give you ample time to figure out if staying put is the best move for you and your family or if a job option somewhere else is better. If you live off base when you separate, the military may move you off base and then also give you a final move within the year time frame. Check to make sure though. It’s easy to find friends to help you move off base, but not so much when it comes to moving across the country.
3. Moving Expenses
Yes, the government may pay for the final move, but what about all the other expenses? If you’ve always lived on base and now have to find a place to rent, you’ll need to come up with the first month’s rent and a deposit. Using your VA Loan to purchase a house, but there are always costs involved with that, from closing costs to buying all the tools and such necessary for a new home.
Some people plan to make careers out of the military, but things happen that don’t always allow that to happen. Because of this, many people haven’t put anything towards retirement because they were counting on their military retirement. The best advice is to start putting money away right away. It may not be possible at first with getting settled in a new home and job, but the earlier you start, the better you’ll be. If you did contribute to your TSP on active duty, don’t touch it. You will be taxed and penalized heavily for withdrawing that money early. Unless it’s between your TSP and being homeless, I would advise against it.
5. Maintaining The Same Quality Of Life
For retirees, this doesn’t seem to be as big as an issue because their retirement makes up for any loss in pay. For those that don’t have the retirement, it can be a big deal. A lot of people struggle with getting a job right away. It may take a few months and then when the paychecks do start coming, you are playing catch-up for the last few months. Don’t let yourself get caught in the trap. You’ll get yourself back where you used to be, but it may take a bit. Running up credit cards in the process won’t help anything.
This is would be glaring neon sign. Start looking at job options once you know you will be getting out. Even if your EAS/ETS date is still a ways off, look into what is out there and what you are qualified for. Talk to some of the contractors in your shop. Odds are they are former military and can help you out. If you don’t have a job lined up, some states do offer unemployment benefits. There are more details at the Dept. of Labor site.
7. Life Insurance
Some people believe that they carry their SGLI over with them. They do, but only for 120 days. It can be converted to Veteran’s Group Life Insurance in those 120 days though. Don’t be shocked by prices though! You’ll never find cheaper life insurance than SGLI.
There is transition classes and counseling for everyone leaving the service. Most of this will be brought up then, but I’m well aware that in most cases it doesn’t get told to the spouse. If you have questions, make sure to ask!