Ready to start a new chapter in your life? Look at this list of things you'll want to consider when getting ready for civilian life.
Article: 12 minutes
Updated: May 16, 2024 Published: June 30, 2022
By: Josh Andrews, CFP® Reviewed by: Editorial contributors
Thank you for your military service, and congratulations as you embark on the next phase of your life. Whether you completed one tour or are polishing off a full, 20-year career, our country and USAA owe you a debt of gratitude.
As I was leaving the Air Force for civilian life, I didn't know what I didn't know. Up to that point, I'd spent my entire education and career with a single-minded military focus: Graduate high school, attend the Air Force Academy, enter active duty. The learning curve for returning to civilian life was steep.
Service members often need help figuring out what to do when leaving the military. I know I did. To help you get started, here's a list of 15 things you can do to make the transition process easier as you're returning to civilian life.
When transitioning from military to civilian life, veterans can face job search costs, delayed income and unexpected expenses from their final PCS. These are just a few of the reasons USAA recommends having a transition fund worth 6 to 12 months of essential living expenses. This transition fund is in addition to your emergency fund. It's meant to help ease the financial transition to civilian life.
In all my years helping people with their finances, I've never heard anyone say they saved too much. If you don't use all you've saved, the money you have in your transition fund can help you pay down debt, obtain a home loan or help you achieve other financial goals, like retirement or funding your kids' education.
As you prepare to leave the military, it's hard to anticipate whether your civilian job will pay more or less than you make in the military.
You can make your dollars go further and reduce financial stress if you enter this next phase of life with as little debt as possible. Be deliberate as you near transition. Would you rather have $15,000 on hand or use it all to eliminate a $300 per month car payment? If it takes a while to get a job, the cash on hand might be more valuable.
If your debt feels overwhelming, approach it step by step with our three-pronged approach. Read more about them on USAA's how to pay off debt page.
When transitioning from military to civilian life, one of the first lessons to learn is how to compare salaries. When you're in the military, your BAH — and therefore, your pay — is adjusted to match the cost of living to where you're stationed. You may even receive a cost-of-living adjustment on top of your increased BAH.
Civilian companies don't necessarily make those adjustments, which can make it difficult to compare jobs in different locations. Imagine that you're an E-7 retiring after 20 years, and you're currently living in San Antonio, with an annual salary of $100,826. Let's say you get two job offers: One is in Tupelo, Miss., and pays $90,000, and the other is in Honolulu and pays $100,000.
Comparing these jobs can be difficult with so many things to consider, such as cost of insurance, utilities, groceries and homes just to name a few. To help you compare your options, USAA created the Military Separation Assessment, located on our Leaving the Military page.
The assessment allows you to input your current military income and location. Then it estimates how much you would need to make as a civilian to maintain your current standard of living in up to three locations across the United States. You can choose the locations you want to compare.
In this example, the Military Separation Assessment reveals that you'd need to make $217,786 a year in Honolulu to maintain the same standard of living you currently have in San Antonio. However, in Tupelo, you would only need to make $97,544. This makes sense since Hawaii has a much higher cost of living than Mississippi. This assessment should help you compare the jobs and decide which one is best for you and your family.
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To help you find your next job, USAA has teamed up with RecruitMilitary Open in New Window. See note 1 They help service members and their spouses transitioning out of the military connect with veteran-friendly employers looking for top talent.
Updating your resume is an important part of this process. Why do you need to update your resume just because you're transitioning from the military to a civilian job? Because civilian employers don't necessarily speak or understand military lingo. If your resume is filled with military jargon or acronyms that describe your skills, the HR professional on the receiving end likely doesn't have the knowledge to decipher it.
Therefore, it's important that you describe your skills and military experience in their language. Once you've updated it, ask a few civilian friends who've never had military experience to take a look at it. If they can understand your strengths and experience, you're probably headed in the right direction.
If you feel confused when you hear people discussing high-deductible health care plans or using terms like HSA or FSA, you're not alone. I remember signing up for benefits on my first day of work at USAA and having to call my dad for advice on choosing a health care plan. I didn't understand civilian benefits, and to be honest, I still learn something each year when annual enrollment comes around.
While it may be confusing, having sufficient health care is important for your financial security. Take some time to understand the differences so you can better compare jobs. Check out this article devoted to helping military members understand civilian benefits.
It's important to note that if you're not retiring from the military, you'll need to replace TRICARE. Learn more about how to get health insurance when leaving the military.
When you leave the military, your Servicemembers' Group Life Insurance (SGLI) will go away. However, your need for life insurance probably doesn't go away.
Veterans' Group Life Insurance (VGLI) is one option for veterans struggling to get life insurance due to health risks, but there may be less expensive alternatives for those who are healthier.
For more information about the right types and amounts of coverage for you and your family, visit USAA's life insurance for military members page.
If you have a current illness, disease or injury that was caused or worsened by your military service, file a claim for disability pay. Wartime veterans who meet certain requirements may also qualify for veteran pension benefits. Through the Department of Veterans Affairs, or VA, you can find out if you're eligible and submit a claim Open in New Window. See note 1
Depending on your disability rating, you may receive a monthly VA disability check, which can help offset some of your costs.
Suffering from a disability can cost you in ways you may not expect. I'm an 80% disabled veteran, and there are things I once could do but no longer can because my back and neck just won't let me. As a result, I have to hire people to take care of tasks I'm not able to complete myself. That's where the disability check comes in handy.
It's hard to predict what types of medical treatments you'll need in the future. I've had many procedures on my back and neck. If I had to pay for them, it would have cost me at least $50,000 over the past decade. For me, learning about the VA was key.
Let's also admit that the VA disability process can be confusing. That's why many free services are offered to help veterans navigate the VA disability process by veteran service organizations Open in New Window. See note 1
If you move to a new city, you'll need to update your insurance policies. Some insurance costs are location based, such as auto insurance. Be sure to update your budget to reflect the new insurance premiums.
Speaking of budgets, do you have one?
As your separation date nears and you have a clearer picture of life after the military — where you'll live, your new income, and new or changing expenses — create a new civilian budget.
This budget should reflect the realities of your new situation, such as health care costs and state taxes. Many service members establish residency in states that don't have state income taxes, and when they move, the new taxes catch them off-guard. Be sure to fully understand your take-home pay.
As you update your budget, remember why you're doing it. The goal is to spend less than you earn; otherwise, you're constantly going into debt. Learn more about how to prepare your finances for the transition to civilian life.
When you leave the military, ask yourself the following three questions:
Will you leave it where it is or roll it over to another retirement account? Here are 4 things to consider before moving your TSP.
This question applies if you're separating under the Blended Retirement System. For help, check out our article, Is the blended retirement system lump sum option right for me?
If someone will be financially disadvantaged in the case of your death, the Survivor Benefit Plan helps ensure that a portion of your military retirement paycheck passes to them. That's why USAA supports the Survivor Benefit Plan as a way to provide financially for those left behind.
If you're retiring from the Guard or Reserve, your decision is a bit more complicated because of the "gray period," in other words, the time between when you retire and when you turn 60. Understand your reserve component survivor benefit plan options.
Depending on your civilian career, you may want to go back to school to learn a few additional skills. Remember that you earned GI Bill benefits. Take some time before you leave the military to learn how you can maximize your education benefits Open in New Window. See note 1
Don't underestimate the power of networking; you never know where it may lead.
There's a good chance you've met quite a few people during your military career. Reach out to the ones you've lost touch with and keep in contact with your current associates. They can help you with professional networking, as well as offer personal advice and support on relocating and transitioning.
Consider joining professional networking sites, like LinkedIn, that can help you stay current on news in your industry or desired field.
And in addition to networking, be sure to keep in touch with your military mentors. Maintaining these relationships will help you feel a sense of belonging during your transition.
When I left active duty service after 12 years, I wanted more time with my family but wasn't ready to disconnect from the military. To strike a balance that worked for me, I joined the U.S. Air Force Reserves to finish my 20-year military career.
Not only do you get the joy of continued service, but serving in the Reserves or National Guard also provides the following benefits:
Check out these 9 must knows about going into the National Guard or Reserves.
Returning to civilian life is a challenge not only for military members, but also for military spouses and families. Your children may be leaving school friends, and your spouse may be leaving a network of his or her own.
Some parting service members choose to live near their former installations, but that's not always practical. Prioritize keeping up with friends via telephone, emails, social media and scheduled meetups. Also, consider maintaining a post-military support group to learn about education and job opportunities in the civilian world.
One of the biggest challenges I faced when entering the civilian workforce was understanding new terms. In meetings, my colleagues discussed "organic visits to a website." I could tell you all about LES, TDY, PME, PCS and DITY, but I had no clue what PTO meant. On a side note, that's "paid time off" or what we call "leave" in the military.
I started writing down terms I didn't understand and asking a peer after the meeting to interpret for me. Over time, my list decreased, and I began to speak their language.
Both at work and at home, focus on the positives as you shift from your military to civilian life. More family time, a regular schedule, no deployments, and the ability to set down roots that won't be pulled up every two to three years are all good things.
Start now, and you'll have plenty of time to prepare for a smooth transition.
USAA has a dedicated leaving the military page where you can create a personalized separation assessment and checklist.