Military Retirement Lessons Learned

A friend’s spouse retired from the military a little over a year ago, and I asked them to review “The Military Guide”. This relatively new retiree has a shadowbox full of awards and medals. They didn’t make E-9 (or O-9) but they were on the short list. Their military pension is well into five figures. A typical bridge career for their résumé of their military experience would be “Director of…” or “Vice President of…” at a major corporation. They’d be supervising a hundred senior staff, billions of dollars of equipment, and a budget of hundreds of millions of dollars.

This reader prefers to remain anonymous but they’re happy to answer more questions. You can post them in the comments below, or send them to me and I’ll pass them along.

Here are their comments:

Thanks for the opportunity to review your book. I think it’s great; it’s comprehensive and deals with a lot of the issues that every retiree needs to think about. Here are my comments and suggestions in no specific order:

1) The generational paradigm has shifted. Specifically, senior officers and enlisted personnel are marrying later, having children later and as a result, providing child care and saving for college much later into life. I have personally seen this amongst some friends and it is something that needs to be factored in. Along with “Where do I live next?“, military retirees need to be realistic about “How much do I need to make?” and that often drives “Where do I have to live?” We planned it well in that I retired during our child’s senior year of college and so knew we would be done with tuition bills (for a while anyway).

2) The age old question of the Survivor Benefit Plan. I spent days concocting different scenarios where buying term insurance (or another type of policy) was a more cost effective plan than SBP. The bottom line is: it isn’t. Most everyone should elect SBP. Now, if the spouse of the person retiring has a lucrative retirement plan of their own, then they should consider not doing SBP (because he/she will be taken care of regardless). But, as I noted before, SBP should normally be elected.

3) Retirees should not take the offered Veteran’s Group Life Insurance. There are many civilian term plans that are much cheaper (USAA and Navy Mutual Aid are two examples). So if a couple moves to a new location and takes on a $400K mortgage for a house, it might be wise to take out a $400K policy to pay off the mortgage in the event of the retiree’s death. Then the spouse has SBP.

4) I didn’t have a retirement ceremony and I don’t regret the decision. Truth be told, I had received all the accolades I could want, had more medals than I knew what to do with, and didn’t want to host a party for a hundred people to hear them say what a great person I was. I had received numerous gifts during my career. I had trained and mentored hundreds (if not thousands) of servicemembers. I knew deep down that I had left behind a legacy of well trained and dedicated people. Frankly, that’s all I needed. A piece of paper that was auto-franked by the President or the Governor wouldn’t make a difference. After more than a year of retirement, I still feel this way.

5) Make sure and calculate your terminal leave dates correctly to maximize your pay, allowances, and permissive househunting.

Note: while you’re on terminal leave and househunting orders, remember that during this time (up to 100 days) you’ll continue to earn leave at the rate of 2.5 days per month– as many as 7.5 more days. Almost everyone ends up selling back some leave. but the military will not give out (or buy back) a fraction of a day.  As noted in HalfTheMoney’s 27 May 2013 comment below, the finance command will now buy back a half-day of leave.  It’s about time!

6) Jobs on the outside come with health benefits for you/family. TRICARE becomes the “alternative” coverage. Also, in many locales in CONUS, TRICARE Prime has now been discontinued (recent change). So TRICARE Standard coverage is the only option.

Note: more TRICARE information is in this post.

7) Your saving and portfolio management advice is good but if you are reading the book months before retiring from the military, the horse has already left the barn. In other words, it’s probably too late.

Note: “Plan B” is a civilian bridge career.

8) YOU CAN LIVE WHERE YOU WANT. We moved to a place with no base nearby, no military commissaries, and no other military support. There is a VA Center nearby but that’s it. Finding new doctors is a bit of a hassle but not all that bad.

9) I think that if the alternative to taxes is living in a state I don’t want to be in, then I will pay the taxes.

10) On the existential side, I tried to leave the military culture cold turkey. About a year after retirement, I am looking for a position with a company that does defense work. The toughest part of the transition is the loss of the cultural familiarity. It’s something everyone needs to experience and decide for themselves.

If you are a senior officer or NCO then you have grown up in a military culture that is very specific, comfortable, predictable and to some extent welcoming (for both you and your spouse). If you move to a place far from a military base, the likelihood that you meet or interview with someone who was in the military is very low. Turning a superlative military career resume into a résumé is challenging. I have found that my best success has been finding companies with executives who have served in the military and concentrating my search there. Linkedin is the best tool for this. I routinely get “thank you for your service” but the general public is absolutely clueless about what we in the military do.

Hawaii is completely different. Everyone you meet in Honolulu knows someone that is in the service or served themselves. It’s part of the culture of the islands. Many retiring people want to leave that military mindset and comfort zone and so go cold turkey doing it. I think though, that in my case, I went cold turkey, took some time to think about it, and wished I had considered further what the loss of that culture would mean (it’s like shedding a layer of skin).

11) If you were to write a supplement or “next edition”, I would recommend you include a discussion of the paradigm shift in hiring practices for corporations. Specifically, the automation of the entire process and the disappearance of hiring professionals. This is especially true if you choose an industry or vocation other than the military or defense. Many books have been written about this but it can be very frustrating and time-consuming sending your applications off into the ether, only to never hear from a company again.

Lucas et al are still doing a bang-up job….for junior officers and department heads. Although they advertise as such, their forte is not the senior servicemember market. In fact, I know of no senior officer (post command) who has gotten a job through them. Their model is based on working with specific companies in specific industries in designated areas of the country. For senior retirees who are looking to branch out (away from nuclear power, defense, manufacturing, etc.) and in a specific non-defense centric part of the country, it’s of little use. Absent using an executive recruiter, a senior job seeker in one of these out of the way places, is left to applying on the internet, networking and… patience. To better understand the new executive hiring paradigm, you might want to go to Amazon and download a book entitled “From Bedlam to Boardroom” by Colleen Aylward. She is a former Seattle-based executive recruiter turned author who after 20 years in the business decided that it’s better to teach people how to fish instead of doing it for them. It’s a fast read and very eye-opening. Added benefit is it’s got a lot of very neat tricks for executive job searchers.

I was very surprised by the last comment. Military-friendly career-transition companies advertise heavily (and on Linkedin) and I’d assumed that was the same as always. MOAA also seems particularly active in career seminars and transition services.

I decided to seek a reaction from the other side of the career-search table. My classmate Lee Cohen has enjoyed a full military career as both an active-duty submariner and with the Navy Reserve. After leaving active duty he started his bridge career with Lucas Group, and today he’s an executive senior partner. I’ve been in Lee’s Rolodex database since the late 1980s and I’ve sent him dozens of transitioning servicemembers over the last 20 years. He enjoys his work (he has autonomy, complexity, and fulfillment) and he has no reason to ever retire. (Submariners take note: both Lee and I have managed to rise above our conduct records and leverage our nuclear power training.  You can do this too.)  Any servicemember, officer or enlisted, who’s leaving active duty can contact Lee directly or at Lucas Group.

Lee responded:

Here’s the tough reality for senior officers who want to start a corporate career: the number of non-Beltway companies that will hire an officer and pay an executive compensation package right out of the military is very very small. We work very hard to surface those opportunities, and have the most success with supply and technical officers (nukes, civil engineering, engineering duty). But the non-technical O-5s and O-6s with BAs have a really tough go of it.

There are bunch of outfits that place technical sailors. There are a bunch of outfits that place JOs. But Lucas is the only outfit that places senior officers (that I know of). And I’ve placed a good number of post-command officers (I placed another classmate last week!). So it does happen! Hope that helps!

This retiree’s story is still getting to the “happily ever after” part, but they have the safety net of their military benefits. Although their bridge career is heading in a new direction, they’re close enough to financial independence to have the flexibility and time to step back and try a different plan.  They’ve also learned a few new things along the way (personal as well as professional) that should further simplify the search.

When you leave the military, be aware that your bridge career search might not end with the first employment contract. You’ll evolve, and your needs might change too. Once again, when you have financial independence then you have choices!

Note: Most of these related links were excerpted from “The Military Guide to Financial Independence & Retirement“. If you like what you read then check your local library for the book– or you can buy it from that link.

Related articles:
When should you stop working?
Where do you live after you leave the military?
Exit interviews, last-minute questions, and the retirement ceremony
The transition to a bridge career
Retirement: don’t recreate your old environment
During retirement: You will change. Your plans may change too.
During retirement: where do you want to go next?
40 miles for Tricare Prime — or maybe Tricare Standard

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."
This entry was posted in Military Retirement. Bookmark the permalink.

21 Responses to Military Retirement Lessons Learned

  1. GubMints says:

    +1 on Navy Mutual Aid Association for Term-Life insurance. In my case, they outbid VGLI, FEGLI, and USAA- none was even close. The NMAA application process was very straightforward, and adjusting the benefit level for a ‘life changing event’ later on required nothing more than a phone call.

    I’ve had 4 jobs since leaving Active Duty. Two each found through Networking, one through JO Recruiter, one through Monster Board. So far, the placement process and job provided via JO Headhunter was the most enjoyable.
    2nd place would be jobs provided via Networking.
    As for online resume databases, unless you have a VERY specific desirable skill/buzzword on your resume the Monster/online job applications (including applying online directly to targeted companies) are nothing more than placing an unbaited fishing hook in the water- Total waste of time.

    • Doug Nordman says:

      Thanks, Eddie, good to know. I’m going to have to list the pros & cons of the various military-friendly insurance companies in a future post.

  2. Deserat says:

    Interesting perspective – from an active duty retiree. It’s a whole different ball game with a Reservist. I do disagree with one of his premises.

    1) SBP is not a great deal for a Reservist retiree – Reservist retirees usually see much less of a pension, so therefore the benefit is less for a larger price. YMMV in this and I wouldn’t make it a wholesale Nike “just do it” statement.

    General comment on post:

    With regard to the employability of senior military retirees, it’s a hit or miss. The civilian world does want to know what you did functionally without all of the military jargon. Leadership and communication abilities are very important, however, if you come down heavy on the authoritarian side, you will not fit in well with other corporate cultures. Frankly, I’ve seen *very few* senior military personnel that would have made the transition well. The military is a culture and the longer you are in that culture, the more it becomes part of who you are.

    If you wish to break out of that culture, you will need to start a bit earlier with understanding where it is you wish to work – for example, I work in healthcare outside of the military-industrial complex. I left active duty and went to get a masters and started at the bottom to build up my knowledge and credibility in this industry. People I interact with in my civilian capacity are fascinated with the military but are generally ignorant of the military. People I interact with in my military capacity are less fascinated with my civilian career but are also ignorant of the civilian world outside of the DoD and military-industrial complex.

    Bottom line, it is probably quite a stretch of one’s expectations to think that they will easily end up in a leadership or executive position in an industry or function outside of that which they worked in the military. Now, you could also start your own business in the industry you wish to work, but that’s another long blog post and thread discussion…..

    • Doug Nordman says:

      Thanks, Deserat!

      I think the biggest (and perhaps only) advantage of RCSBP is having up to two decades of insurance protection for only two years of premiums. Today a gray-area Reservist’s spouse can opt for SBP as soon as they retire and then hope nothing bad happens before age 60. Once the pension starts they have to pay a couple years of premiums for all those earlier years of coverage, but then they can cancel the policy in favor of cheaper term insurance until Social Security. Otherwise they’d be paying RCSBP premiums until the Reservist was 90 years old. Not such a good deal.

      You raise a good point about getting a bachelor’s or master’s degree (perhaps on the GI Bill) and then starting a bridge career at the bottom… either while drilling in the Ready Reserve or in the IRR.

      Entrepreneurs will definitely figure out what they want to do during college. And you’re welcome to send over a guest post on that topic, too!

  3. Mike says:

    Wow! I really enjoyed this post. Frankly, the most surprising thing was the comment about a retirement ceremony. I don’t recall ever hearing someone forego one, especially at the E-8, O-5 and above level.

    The real mystery is making retirement work in Hawaii. I’m ready to read that one Nords!

    And I just noticed you added me to your blog roll! Thanks a lot!

    • Doug Nordman says:

      Thanks, Mike!

      Retirement ceremonies are a sore spot with me and my spouse. During the 1990s drawdown we were attending as many as three per week. Several times I saw steely-eyed killers of the deep get all weepy on the stage (or engage in extended ego trips), and I decided that would not be me.

      I retired as an O-4, and I practically had to sign a page 13 to get the chain of command to stop bugging me about a retirement ceremony. Even then my CO (we did not get along) felt obligated to ambush me with a farewell ceremony so that I couldn’t complain later.

      In the case of this anonymous poster, their retirement ceremony would have tied up the efforts of at least a couple dozen people for several weeks. I’m sure the entire command heaved a huge sigh of relief that there wouldn’t be a ceremony.

      I discuss Hawaii life in these posts:
      but the best way to figure it out is to come over here and try it for a few months. I’ll loan you a spare longboard…

      I hope a bunch of my readers go read through your blog, especially your tips on passive income. Keep ’em coming!

      • Mike says:

        I’ll happily take you up on that offer. We’re inclined right now to settle in Texas or Florida (warm, water nearby, things to do, tax advantages, etc.), but since Jen and I visited Oahu we continually talk about going back. This sort of thing is EXACTLY what I’m after with my first retirement: I want the flexibility to try something like this out without having to fret about financial obligations.

      • Mike says:

        On the retirement ceremony, I think I will forego one as well, or at least make it very low key. I’ve never been one for that sort of limelight.

      • Doug Nordman says:

        “No ceremony” saved us a lot of time, and avoided a lot of family/relative craziness.

        On the first official day of my retirement we took family surfing lessons…

  4. Janette says:

    The article was excellent. The single largest mistake “we” made when my husband retired was declining SBP. We had no idea that we still had three moves and difficult jobs for me in the future. I am left without a pension- which is hard when my prime working years were centered on moving every 18 months to support a great career.

  5. Ryan says:

    Very interesting perspective. Most retirees I know went on to work in the defense industry as consultants or similar positions. There is, and always will be, a huge place for military retirees in those industries. It’s much easier to train a veteran how to do the civilian work than it is to train civilians how to understand the military culture, learn the military lingo, etc.

    I imagine it would be easier for a traditional Guard/Reserve member to make the transition if they have been working in the civilian sector while also serving in the military. As Deserat mentioned, there is a huge culture gap which an be difficult to bridge – on both the employee and employer sides of the table.

    • Doug Nordman says:

      I’ve always felt that it’s easier to achieve financial independence than it is to go through the process of starting a bridge career. You certainly have more control over reaching FI.

      I’d especially hate to have to put a higher priority on an employer’s location over where I’d prefer to live… especially in Hawaii where bridge careers for military veterans tend to be in the civil service, the shipyard, or the local utilities industry.

  6. Mel M says:

    Very interesting post Nords…I am in the process of retiring as well and opted to forgo the whole retirement ceremony…much to the chagrin of some of my friends and mentors. I just didn’t feel it was worth all the hassle.

    After returning from a one-year deployment to Afghanistan (with my wife’s deployment to Afghanistan four months ahead of mine), I realized there’s something more important than the next command, of which I was selected for command of a battalion located OCONUS. Faced with the distinct possibility of spending less time with my wife during the two-year command (kids are all grown), and knowing that we have achieved financial independence and can retire at just over 20 years (the Firecalc calculator is pretty comforting), I decided to decline battalion command (harder than I thought as I had to get my GO/FO endorsement for my declination memo to be sent up to Army Human Resources Command) and submitted my retirement packet soon thereafter.

    On another note, I too elected full SBP but believe we will opt for my wife to elect Threshold SBP when she retires in a couple of years.

    Do you think there would be enough interest in starting a Bogleheads chapter on Oahu? I haven’t read your book but will make a point to do so while I am still on terminal leave.

    • Doug Nordman says:

      Thanks, Mel, and congratulations on your retirement!

      How ironic that your boss had to endorse your request to not have command.

      That’s a good question about Bogleheads– you’ll have to post there and see what response you get. An Oahu chapter of never caught on because there’s only 5-6 of us on the island. You might have better luck with Bogleheads’ bigger group!

  7. halfthemoney says:

    Excellent article. I’m currently on transition leave and will be officially done on 1 July. It’s good to see that some of my decisions and perspectives are similar to other retirees.

    I don’t plan on returning to work for at least a year and maybe longer if I like it; after 29yrs I’m excited about rediscovering old hobbies and passions. I’m 47 with kids ranging from 25 down to my late in life 5yr old blessing. I’m going to be the classroom dad when she starts kindergarten in Aug while she thinks I’m still pretty cool. We have no debt and upon retirement will still have over $90K in income.

    I was waffling on the SBP for a couple of reasons. My wife is a 100% disabled vet so has guaranteed income. If I die then she’ll of course qualify for my SS for herself and the children. We agreed that those income sources in addition to life insurance will meet her (or my) needs if something happens. We would rather continue investing that money into stocks. At 81 my father still puts $400 per mo into the SBP in spite of a very healthy portfolio and my mother probably doesn’t need it. Even though our investment levels aren’t as high as we’d like we are doing well.

    We also decided to do a “hybrid” of life insurance; some with VGLI and some with another source. My primary concern is I will have a fairly high disability rating as well and don’t want to deal with going thru add’l exams.

    I respectfully disagree with one comment concerning being paid for fractions of leave. Just last week the finance office put on paper that I’ll get paid for 1/2 days leave.

    Doug, I’m in the same boat as you concerning retirement ceremonies. I managed to get out of the Post retirement ceremony but my boss absolutely refuses to allow me to leave without some form of recognition for my service and I continue to get calls every day from the Opns section asking for the specific date. It’s driving me crazy!

    • Doug Nordman says:

      Thanks for the news on fractional days of leave! It’s about time DFAS joined the 21st century. I’ve updated the post and I’ll add that correction to the next edition of the book.

      We went back & forth on SBP, too, and decided that we’d rather have the 6.5% of each other’s pensions for ourselves.

      I can’t tell you how to get the boss off the Opns section’s back, but a month after I retired I went to a local restaurant for a retirement lunch with my old command’s civilian staff. They appreciated a chance to go out for lunch, and I was in a much better mood for talking story…

  8. Mark Nagorniuk says:

    Just found this article, preparing to retire in about six months. Of course we’re all entitled to our opinions on everything but I couldn’t resist chiming in on the ceremony piece. Early on in my career, after I had decided to stick around, I was bound and determined to not do a ceremony mainly to not inconvenience my fellow members. Over the years and after attending many ceremonies it became clear to me….the ceremony is not about you, it is about your family and friends that have supported you over the years and made those hard tours possible. Just my two cents, and I do greatly appreciate the article.

    • Doug Nordman says:

      Thanks, Mark, and I agree with your ceremony perspective about honoring (and thanking!) family & friends.

      The author of this post is a personal acquaintance, and I know that they preferred not to have their command devote a week (or more) to the planning & execution of a retirement ceremony. In their rank & billet at the time, it would’ve tied up quite a group of people and presented a significant backlog of visitors at the base gate.

      Personally, my family & friends didn’t care for the planning & logistics. (My spouse was also active-duty military.) During my attendance at submariner retirement ceremonies I’d seen too many steely-eyed killers of the deep break down at the podium, and I wasn’t going to risk that in my case. Instead, the people with whom I worked the most closely devoted our time to a Friday-afternoon BBQ farewell ceremony, where I had the chance to say thank you personally and in front of our peers. It was way more relaxing, fulfilling, (and fun!) than a formal ceremony.

      15 years later, many commands still seem afraid to let a servicemember retire without formal recognition. Maybe it’s because the command “knows better” that the retiree will appreciate the closure, or the command is making a major effort to recognize their contribution. (A few commands want to make sure that there’s no complaints later about not getting a ceremony.) Yet a significant minority of servicemembers tell me that they don’t need the formal recognition, and their families & friends have already been honored & thanked without the command’s traditional ceremony. I hope more servicemembers get their choice, guided by the wisdom and experience of comments like yours.

  9. Jamie says:

    what is your recommendation for one to do Medically before they retire? what paper work and medical checks should one make sure they complete before leaving the service?

    • Doug Nordman says:

      Jamie, you’ll have to do a separation/retirement physical. Start early because you may want additional referrals to have every detail of your symptoms (chronic or acute) checked by a specialist.

      You may also be able to coordinate it with your Compensation & Pension physical for your VA disability rating as “Benefits Delivery at Discharge”.

      Click to access BDDFactSheet.pdf

      You’ll work with your base medical command for the first physical, and with a Veteran Service Officer for the VA BDD claim.

      If you plan to buy additional life insurance as part of your separation, then you may want to arrange the policy before you start the military & VA physical exams.

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