I’m Going to Retire from the Military. Now What? (part 1 of 2)

I’d like to dedicate this post to Tomcat98 from Early-Retirement.org, a good friend who’s let his service know that they’ll only be enjoying his services for another 11+ months. He’s been planning this one for a long time, folks, and he has all sorts of ideas on what he’s going to do all day. Enjoy yourself, Tomcat– you’ve earned it!

This post is not a retirement checklist.  You all have those, and we all know that your command’s checklist is the best one that’s ever been used in the history of your branch of the military.  Let’s not get into the nitty-gritty of exactly when you should look for turn over your personal equipment or page-check inventory your classified material.  Instead, let’s focus on the squishy issues of reconciling your retirement with the rest of your life!

Let’s start with the simplest case.   This countdown post assumes that you’re going to retire from active duty with the financial independence to pursue different lifestyles through (at most) occasional part-time work.  Other posts will talk about Reserves & National Guard, bridge careers, and one-enlistment veterans.

Before we dig too deeply into this topic,  let’s also assume that you’ve chosen the retirement date that optimizes your pension finances. Your service dates are correct for your retirement system (“High Three” for the vast majority of us), you’re making the most of your rank’s longevity pay raises, and if necessary you’ve stayed long enough for the latest pay raise.  Add a comment below here or e-mail me if you have questions about these topics and I’ll expand on them in a separate post.

Let’s also assume that you’re not under long-term medical care. If you’re facing a medical review board then much of this post’s considerations will be on hold until the military decides whether you’re retiring from active duty or transferring to the temporary disabled retired list. Although a medical retirement is more complex, it’s probably in your best interests.  I’ve had shipmates spend years on the TDRL and they’re much happier for doing so.  I’ve also had shipmates try to punch out before the last medical/dental problems had been addressed, and it’s even more painful than addressing the root canal cause of the problems.

Filing Your Retirement Request

Each service changes their deadlines and restrictions, but you’ll want to file your retirement request up to a year ahead of your desired retirement date. This should allow ample time to meet all the notification requirements, to turn over to your relief, and to request an appropriate amount of terminal leave.  Try not to ambush or blind-side your chain of command.  Ideally you’ve already attended your transition assistance course, but if not this should be done as soon as you can get a date. Another advantage of such early notice is having ample time to complete any medical and dental care identified during the retirement physical.  You probably have no idea what you’re getting into until you’ve gone through the first part of your retirement physical.

Consider your terminal leave requirements very carefully. Depending on your duty station and your relocation plans, you could request up to 100 days of leave and permissive temporary duty (house hunting). This would allow you to not only continue to draw your base pay but also all special pay and allowances. At the other end of your range of options, you could also choose to sell back the maximum amount of leave and remain on duty until the last possible minute before leaving active duty. The difference is that selling back leave only earns base pay without any special pay or allowances. The difference may require you to trade several months’ additional labor (not leave!) for a cash boost to your retirement portfolio.

Once your chain of command has endorsed your retirement request then it’s time to make the announcement you’ve been waiting for!

What to Tell Your Shipmates, Friends, Kids, & Parents

At first it may feel a little awkward (even embarrassing!) to talk about it. Military retirement can actually be a bit threatening to a veteran’s identity. Your occupation may be a big part of “who you are” and it might make you feel like a valuable member of the team. You may have spent decades telling everyone: “I’m a Navy submariner.” This approach works very well in fields that you don’t actually have to “retire” from like law, medicine, or software. Even if you haven’t earned any money in decades from its practice, you’re still what you do. Identifying with your avocation may not always be good but it’s certainly a ready-made response in our career-oriented society.

Try adding the “retired” word to your introduction: “I’m a retired Air Force mechanic.” That may be all the explanation required. Most civilians have little trouble believing that military retirees have earned their retirement and are entitled to do whatever they want. (Next you’ll hear: “Congratulations, and thanks for your service!”) Other veterans, however, seem to be our own worst enemy– “Yeah, yeah, I know that, you slacker, but what are you doing NOW?” You have to justify your existence.

Others may react quite differently. Retirees have a saying: “Your retirement will separate your friends from your coworkers.” A true friend shares your hopes and dreams and will be happy for you when you achieve your goals. A coworker may not appreciate your ambitions and may even feel that you’re abandoning them to struggle with your old workload and to train your replacement. Even worse, some coworkers may seem jealous or frustrated that you’re able to retire (and they’re not).

Many military retirees avoided discussing their plans with their coworkers. They’d talk about their leave and vacation plans without mentioning work. If pressed, they’d talk about going back to school, spending time with family, or even volunteering with charities. They shared the details with their close friends but asked them not to spread the word until after they’d retired.

Caution: your true shipmates & friends should share your joy at your success, but that doesn’t mean they want to hear all the details ad nauseum. They may be humoring you while privately thinking that your plans aren’t realistic. They may even think that you’ll be looking for a job in a few months. (Refer back to the retirement myths.) You might end up telling them that you just want to spend time with your family or to explore life for a while.

Unfortunately you’ll have to play these situations from their comments and their facial expressions. Be cautious, be flexible, and don’t be surprised by their reactions.

What about family? If you’re married then you and your spouse have already discussed and coordinated your plans. You’ve already shared all your information and reached an agreement.

But how will your retirement affect your kids? Will they have to deal with yet another move? Will they worry that you don’t have enough money? Will they understand the plan, or will they feel embarrassed to discuss it with you?

Younger kids (up to school age) may not fully understand the idea of retirement. You’ve probably been working for their whole life and they may not know anyone who’s retired. At their age it’s best to stick to them and their big picture. They want to know that you’ll be spending time with them and they might care that you have enough money in the budget for some fun. Once they realize that you’re not deploying any more, they’ll happily skip the details!

Adolescents may be a bit more concerned. They know that people have jobs to pay the bills, and they want to know where their allowance is coming from. It’s a good idea to give them plenty of time to talk about it, to answer all their questions, and to let them know that you’re going to be able to spend more time with them. You may be earning less money than your working days, but you have a budget that includes everyone’s needs. You may have to have this conversation several times over weeks or even months– they’ll be skeptical and seek reassurance. (They’re also talking it over with their friends, who are reporting this news to the other parents.) Once your kids are assured that you can coach their team or chaperone their school field trips, they’ll be just as enthusiastic about retirement as you are.

Teenagers are a tough sell.  (Believe me, I know.  We just finished launching one from the nest.)  While they’re figuring out their own identity and taking their first steps to independence, they just want their parents to be normal, invisible, and available. Parental non-conformance is embarrassing enough, and they’re not necessarily going to be enthusiastic about all the time you’ll want to spend with them! At this age you may have to discuss the family budget in some detail and make sure everyone understands the changes. Your pension may even seem like a lot of money to them (especially if they want a car), and they may not appreciate that your investments have to last you for the rest of your life. If the family is going to be moving away from their school and their friends then you’d better have a good justification for this “disaster”. If you want your teens to support your retirement, then you’ll have to show them how it’s going to improve their life. Good luck with that– maybe you don’t want to move until after they’ve finished high school.

Your parents (and your parents in law!) might be even a tougher sell than your teens. In fact their reaction to your announcement might make you feel like a rebellious teen again. They know all your flaws and weaknesses, and although they might be proud of your accomplishments they won’t hesitate to question your judgment. (From their perspective, your spendthrift indolence might put their loved ones on the streets.) If your parents have already retired then you should be able to reassure them– especially if you ask for their advice.

If your parents are still working then you can expect to encounter resistance. If your parents have avocations of their own or feel that they’ll never save enough to retire, then you will have difficulty explaining yourself. You and your spouse will have many interesting discussions with them as they attempt to reconcile their standards with yours. The best approach is to emphasize the time you’ll be able to spend with family (including them and their grandchildren) and to talk about taking a few years off to explore life. Much later they may accept your decision, although privately they may despair that you’ll ever be able to hold down a real job.

Next post:  Choosing where to live, or even whether to live in just one place.

About Doug Nordman

Author of "The Military Guide to Financial Independence and Retirement" and co-author of "Raising Your Money-Savvy Family For Next Generation Financial Independence."
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