Military retirement planning starts long before your final day in uniform. Understanding your military retirement benefits, calculating your military pension, and planning your transition to civilian life requires careful preparation—for you and your family. This comprehensive military retirement guide walks you through every step, from initial planning through your retirement transition. 

Critical Benefits Decisions Before Retirement 

Some of your most valuable military benefits require decisions well before retirement. The Post-9/11 GI Bill tops this list. If you plan to transfer your GI Bill benefits to your spouse or children, you must complete this process while on active duty. This requires at least six years of service completed and a commitment to serve four additional years after transfer. Once transferred, your dependents can use these benefits even after you retire, covering full tuition at public universities, housing allowance, and book stipends. 

If keeping the GI Bill for yourself, you can use it after retirement for college degrees, technical training, certification programs, or even on-the-job training. Having a plan for your GI Bill benefits helps shape your retirement timeline and post-military career options. 

Military Retirement Timeline: 24 Months Before Retirement 

Your military retirement checklist begins at least two years before your target retirement date. One of your first requirements is attending TAP (Transition Assistance Program) classes. While you might be tempted to delay these classes, take them early in your transition. The information provided about VA benefits, career planning, and financial preparation will help guide your retirement decisions. Plus, attending early allows time to take additional workshops or repeat sessions if needed. Many retirees report that they learned crucial benefits information in TAP that they wish they’d known sooner. 

Start documenting every service-connected medical condition for your VA retirement benefits. Even minor issues can affect your disability rating. That chronic knee pain you’ve worked through? Document it. The tinnitus from years on the flight line? Get it evaluated. These conditions could affect your military disability retirement rating and future benefits. 

Understanding your military retirement pay calculation is essential for financial planning. Your military pension depends on your years of service and retirement system. Under the High-3 system, retirement pay calculations use your highest 36 months of basic pay. You’ll want to consider both your pension and potential VA disability compensation when planning your retirement income. However, you won’t know your disability compensation until your rating is finalized, often just after your retirement date. You’ll want to calculate and be prepared for a range of scenarios. 

Important TSP Decisions for Military Retirement 

As you approach retirement, you’ll need to make important decisions about your Thrift Savings Plan (TSP) account. You can leave your money in the TSP, taking advantage of its low fees and simple investment options, or roll it over to an IRA for more investment choices and flexibility. Each choice has different tax implications and benefits. Consider how your TSP fits into your overall retirement strategy, including both your military pension and any future civilian retirement accounts. Read our complete guide comparing TSP and IRA options to understand which choice best fits your retirement goals. 

Military Retirement Healthcare: TRICARE and VA Benefits 

Healthcare changes significantly after retirement. Your TRICARE coverage will shift from active duty to retiree status, bringing new costs and considerations. While active duty families enjoy TRICARE Prime with minimal expenses, retiree coverage includes enrollment fees and copays. Plan for these new healthcare costs in your retirement budget. If you move, your family may need to get accepted through new providers under the retiree coverage 

Life insurance decisions also need attention before retirement. Your SGLI coverage ends shortly after your retirement date. You’ll have a limited time to convert to VGLI without a medical exam. Consider whether VGLI meets your needs or if civilian life insurance might offer better rates. Read this article for more details on that decision. If you’re in your 50s, investigate long-term care insurance while premiums are lower than they’ll be in traditional retirement years. 

Choosing Your Military Retirement Location 

Your choice of retirement location affects everything from benefits to quality of life. Many military retirees use their VA loan benefit to purchase a home in their retirement location. This valuable benefit doesn’t expire when you retire – in fact, you can use it multiple times throughout your life. VA loans offer significant advantages including no down payment, no private mortgage insurance, and competitive interest rates. 

Research states offering the best benefits for military retirees. Some states don’t tax military pensions, while others offer property tax exemptions for disabled veterans. Consider VA healthcare access in your chosen location – facility quality and wait times vary significantly by region. 

The job market should heavily influence your choice. Some areas have strong defense contractor presences or military-friendly employers. Research employment rates for veterans in different regions to identify promising job markets for your skills. You can check out the most popular cities for veterans to retire to in this article. 

Military to Civilian Career Transition 

Your transition to civilian employment requires careful preparation. Unlike the structured military promotion system, civilian careers often follow less predictable paths. Start preparing at least 18 months before retirement by understanding how your military skills translate to civilian jobs. That logistics experience might make you valuable in supply chain management. Your leadership experience could transfer to project management roles.  

If you need a degree for your chosen post-military field, consider taking advantage of the Tuition Assistance (TA) program to complete college classes for free while you are still active duty. The sooner you begin this process, the more classes you’ll be able to complete. Alternatively, you can plan to use your GI Bill after retirement so you can focus on studies full-time and earn a degree quickly. 

The DoD SkillBridge program offers valuable transition opportunities in your final six months of service. This program lets you work with civilian employers while still receiving military pay and benefits. Research companies that interest you and start the application process early. Good opportunities fill quickly. 

Consider maintaining your security clearance – it’s valuable in civilian jobs. Defense contractors and federal agencies often seek veterans with active clearances. Understand your clearance level, when it expires, and how to maintain it during your transition. 

Final Processing Before Retirement 

Your final day in uniform may be several months before your retirement date. Use the terminal leave and any additional leave days you have saved to get paid time off before you transition to civilian life. 

There are several important papers you must file before retirement. The Survivor Benefit Plan (SBP) is the only one requiring your spouse’s signature. This program provides your spouse a portion of your retirement pay after your death, but it comes at a cost: about 6.5% of your retirement pay. You must make this choice before retiring, and it’s usually permanent.  

When that retirement date finally arrives, your DD-214 becomes one of your most important documents. This single piece of paper proves your service, retirement status, and eligibility for veterans’ benefits. Review it carefully before separation. Get multiple certified copies – you’ll need them for everything from VA healthcare to state tax exemptions. 

Remember that regulations and benefits change regularly. Keep in touch with your retirement services office throughout the process. Your transition to civilian life represents a significant change, but proper preparation will help you navigate it successfully.  

Your First Year After Military Retirement 

The transition to civilian life brings significant changes for you and your family. Your carefully planned budget will help manage new expenses, but prepare for unexpected expenses. Once you leave the military, you will be making decisions about housing, a job, and medical care, without Uncle Sam telling you what to do. Keep track of tax changes – you might need to make estimated tax payments if your civilian job doesn’t withhold enough. Your tax bracket may also change if you and your spouse are both employed full-time.  

Remember that you can still access base facilities with your retiree ID card. Stay connected with the military community through base activities and veteran organizations. The commissary, exchange, and recreational facilities remain available to you. Many civilian businesses also offer military retiree discounts. It never hurts to ask! 

Military retirement opens a new chapter of opportunities. Start your planning early, stay organized with documentation, and verify current requirements through official sources. Your transition success depends on the groundwork you lay during this preparation period. 

The Edge: Free Military Retirement Planning Resources 

Take control of your military retirement planning with The Edge’s suite of interactive tools and resources designed specifically for transitioning service members. Our platform is free to service members, veterans, and their spouses. The Edge offers: 

• Financial Planning Resources: Access budgeting tools to plan for civilian life, explore career salary calculators, and create a personalized financial strategy for your transition.  

• Savings Tools and Calculators: Whether you need to build up your emergency fund, save for your next retirement, or pay for children to attend college, there are step-by-step guides to help you set goals and track your progress. 

• Job Search Help: Get interview tips, resume writing support, job search and networking tools to prepare you for your next step. 

• Mortgage Tools: Explore VA loan options in different locations. Calculate monthly payments, compare interest rates, and understand how your VA loan benefit works for home purchases or refinancing after retirement. 

Join The Edge today to access these free resources and create your personalized military retirement plan. 

Your military service has prepared you for excellence – apply that same dedication to planning your retirement. Whether you’re calculating your pension, choosing healthcare coverage, or selecting a retirement location, thorough planning ensures you make the most of the benefits you’ve earned.