Financial Checklist for Military Transition: Planning for Veterans and Retirees

Transitioning from military to civilian life can offer exciting new opportunities for your future. But it also brings up important financial decisions you need to consider. This checklist is designed to help military members like you take charge of their financial future in civilian life.

1. Request and review your DD 214.

Your DD 214 is the key to accessing Veteran benefits, so securing this document should be one of your first priorities. Request a copy if you don’t have one and verify all information is correct. Then, update your contact details with the VA to ensure you receive important communications about your benefits. Missing or incorrect DD 214 information could delay access to benefits, so address any errors through your local VA office.

2. Apply for your VA benefits.

VA benefits will play an important role in establishing your financial health as a civilian, so it’s important to understand and apply for benefits you’ve earned through your service. Create your VA.gov account and gather documentation for these key benefits: education (GI Bill), home loans, life insurance conversion and Veteran preference for federal jobs. These programs can provide valuable support during your transition and beyond.

3. Calculate your new civilian budget.

Finding a civilian job comes with new financial implications, so managing your finances effectively during this period of change is essential. Getting a clear picture of your finances helps you make informed decisions. Look at your income, expenses and savings to understand your starting point. Consider creating separate budgets for your transition period and your first year of civilian life. This can help account for changing income streams and new expenses.

4. Build your emergency fund.

Building an emergency fund can give you peace of mind during your shift to civilian life. Set aside money to cover 3-6 months of expenses, including costs you might not expect like new work clothes or certification programs. Having this buffer can help you make career decisions with less financial pressure. Set up automatic transfers to build your transition fund while still receiving military pay. Remember to keep these funds separate from your regular emergency savings.

5. Choose your healthcare coverage.

Your TRICARE coverage ends on your separation date unless you qualify for transitional healthcare benefits (TAMP). Act early by exploring your care options: employer healthcare plans, VA healthcare, TRICARE Reserve Select (if joining the reserves) or purchasing coverage through the healthcare marketplace. If you’re enrolling in VA healthcare, submit VA Form 10-10EZ up to 60 days before separation. For marketplace coverage, your military separation qualifies as a special enrollment event, giving you 60 days to sign up outside normal enrollment periods.

6. Understand your disability benefits.

Applying for VA disability benefits is an important step in your military transition. You can submit your disability claim up to 180 days before separation through the Benefits Delivery at Discharge program. This can help ensure a smoother transition without gaps in coverage. Keep detailed records of all service-connected conditions and medical documentation. You can always appeal your initial rating if you believe it doesn’t fully reflect your disabilities.

7. Manage your Thrift Savings Plan and pension benefits.

Your retirement planning will likely need some adjustments when leaving the military. For your Thrift Savings Plan (TSP), decide whether to keep funds in place, roll into a civilian 401(k) or move to an IRA. If you’re retiring with 20+ years of service, you’ll also need to make pension decisions, including whether to elect the Survivor Benefit Plan (SBP) for your family. Consider connecting with a financial advisor to review your options and create a strategy that maximizes your retirement income.

8. Replace your military life insurance.

Insurance coverage can shift significantly after military service. Look at your options beyond TRICARE and consider your needs for health, life, disability and property insurance. Start researching plans before your military coverage ends to avoid gaps in protection. You’ll have 180 days after separation to convert your Servicemembers' Group Life Insurance (SGLI) to Veterans’ Group Life Insurance without a medical exam.

9. Plan your civilian career path.

Your military experience can open many civilian career paths. Use your GI Bill benefits strategically for education or training that advances your goals. Take advantage of military transition programs and connect with Veteran-friendly employers. Consider whether additional certifications could boost your civilian career prospects.

10. Prepare for civilian tax changes.

Your tax situation changes in civilian life. You’ll need to understand state tax obligations, civilian payroll withholding and how your VA benefits are taxed. Your military pension may also have tax implications. Consider consulting a tax professional to navigate these changes. Remember: Some states don’t tax military retirement pay, so factor this into your post-service location decisions.

11. Update your estate documents.

Your transition to civilian life is also your chance to update your estate plan. Review beneficiary designations on all accounts and update your will. Consider whether you need a trust and review your power of attorney documents. Remember that your military power of attorney may not be recognized by civilian institutions, so always update these documents with legal guidance.

12. Seek out expert support.

Expert guidance makes transitioning easier. Talk with someone who can help you with specific transition-related civilian financial planning. Consider working with a VA benefits counselor and connect with Veteran service organizations for support. 

Navy Federal helps you transition with peace of mind

At Navy Federal, we know recently separated servicemembers face unique financial challenges. Our financial advisors understand the complexities of military benefits and can help you navigate crucial financial decisions during your transition. These include the following:

• Evaluating TSP investment options and rollover choices
• Analyzing pension options and Survivor Benefit Plan decisions
• Understanding how disability benefits affect your financial picture
• Replacing your SGLI coverage with VGLI or other life insurance options
• Creating estate plans that protect your military benefits and your family’s future
• Developing tax-efficient strategies for military pensions and disability payments

We’ll help you make informed decisions about your benefits while building a strong financial future. Schedule a consultation today to create a personalized plan that makes the most of your military benefits.