Where to Start When Retiring
from the Military
  
5 Steps To Take Before Next Job Interview
Kazmierczak and Kazmierczak
  
By: Nolan Stokes, financial professional at Government & Civil Employee Services in Indiana, PA

When someone begins to plan their military retirement, the to-do list can be quite overwhelming, but following a few simple steps and utilizing the tools available can make it easier than you think. After a career in the military, planning to leave can be a daunting task and it is always smart to get advice from a professional who specializes in working with military personnel. One of the things that we do when thinking about a family’s retirement is to help them with the entire process. This includes assisting them with paperwork and procedures required, not only start getting paid in retirement, but to also prepare a lifestyle they can look forward to. A financial professional who works with military families should understand military pay and retirement inside and out, and have the ability to help you apply financial products that are designed to protect any retirement savings you may have in the Thrift Savings Plan (TSP). They should also help you understand how to utilize the TSP in retirement with your military pay. 

The TSP is often utilized throughout a military member’s career and is a huge portion of a military retirement. The benefit of talking to a financial professional is they can help you find companies who will be able to accept a roll-over of the TSP funds and offer alternatives to the G-Fund. Additionally, there are annuities and retirement products that can offer income for life, which may be important to certain families who may not have saved as much in the TSP, but are still going to need income in retirement. When you sit down with a financial professional it is important to discuss your monthly income needs and to go over your budget. Incorporating your pension into your retirement planning is crucial, too. Going over your pension income and how it is designed will be important information for your financial professional to understand, and if they don’t, it may be time to get a second opinion. The financial professional should also fully understand how any product will work with your retirement and ensure that the “bells and whistles” of the product are conducive to your family’s needs.

Before you even start talking with a financial professional, however, you will already want to have a solid understanding of your pension pay in retirement, as well as how to maintain your current benefit coverage if needed. First you need to know what retirement system you fall under:

Join Date                                                             Retirement System
Before 9/8/80                                                    Final Pay
Between 9/9/80 and 7/31/86                      High 36
Between 8/1/86 and 12/31/17                   CSB/REDUX
After 1/1/18                                                       Blended (BRS)

After you know what retirement system you fall under, start figuring out what your monthly income will be in retirement. It is quite easy and there are a variety of tools online that you can utilize to figure out how your pension will work and what you should expect from that portion of retirement. The best place to figure out pension payment is http://militarypay.defense.gov/Calculators.aspx.

From that website, simply select what retirement system you fall under based on your join date and fill out the form that follows. Questions asked will range from join date, expected retirement date, pay grade at time of retirement and any economic factors that you may want to include like tax rate percentage. Once you take the time to review the information you’ll be able to see your expected monthly income. This is information that you should take to your appointment with your financial professional if they do not already have it available to them.

Another important step in the retirement process is going through the required military procedures for retirement. First you should schedule your pre-separation counseling appointment. This is usually done a minimum of 90 days before separation, but can also be done up to 2 years before separation. They will cover basics about military retirement like medical insurance, life insurance, how to utilize the Department of Veterans Affairs benefits and more. After that, even if you aren’t required to do so, it still may be a good idea to take a Transition Assistance Program employment workshop. Some branches of the military require it and it can help you gain skills for resume writing, interviewing, etc. After you are ready to leave, you will need to schedule your final exam where they give you your final medical and dental exam. This will need to be scheduled with your installations medical clinic a minimum of 90 days before your separation.

When discussing your separation and retirement with your financial professional it is important to focus on your retirement budget. You may want to consider discussing your lifestyle changes in retirement and what you want to do with your time. Do you plan to get a job in retirement to pass the time? Do you plan to travel and go places that you haven’t been? Will you spend time with family and friends? If so, what does that look like financially for you? These are all things to consider regarding your retirement because you don’t want to get to retirement and start asking yourself “What can I do with the money I have coming in every month?” Instead you should greet retirement with a strategy, not only for your finances, but also for your well-being. After all, retirement is a time to enjoy things and do what you want to do, not just the things that your retirement will allow.

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