Eight Reasons Not To Worry About Military Retirement

A new military retiree asked a very good question on a financial independence forum:

I am going through a big life transition where I’m taking about a 60% cut in pay. Fortunately, it is a military pension and my monthly budget is lower than what I will get paid. I feel that I’m set for my transition and I can take my time finding a job.

Things I worry about:

  • I’ve been in the military since I was 17 years old, so I don’t know civilian life.
  • I’ve never had to apply for a job.
  • I’ve always been told what to do and where to go.
  • I have all this freedom but nothing pulls me in a direction.
  • I have a ton of skills but no certifications (only real experience).
  • The closer I get to retirement the more worries I have.
  • I only have my income to rely on.
  • What if I find a job and it’s miserable?
  • Most “entry level” jobs want a college degree or a couple of years of experience.
  • Should I go back to school to get some hard credentials?
  • What if I can’t find a job?

The good news is:

  • I’ll have a pension.
  • I’m debt free (I also own my home).
  • I have 18 years of leadership and mechanical skills.
  • I have the GI Bill.

I don’t understand why I’m so worried all the time!

All of these feelings are perfectly normal.

Your “worst case” scenario is: nobody ever wants to hire you. Even in that situation, [your income] > [your expenses]. You could live nearly anywhere, keep your expenses low, and never work again.

You may already have figured out what I’m writing in the next few paragraphs, so I apologize if I’m preaching to the choir.

You will never know civilian life. I’m not even sure what that phrase means. The habits and behaviors you spent over half your life acquiring will serve you well after the military. You’ll still run your life pretty much the same way you do in uniform, only with fewer haircuts. You’ll have a lot fewer rules to follow, too, and you could really let yourself go, but you won’t because your personal (internal) standards are too high. I hear that police officers, medical professionals, university professors, and high-ranking government officials feel the same way about being a “civilian” without access to the same lifestyle and camaraderie that they used to enjoy– along with all of its stress, deprivations, and frustrations.

Many civilians envy your military life. You had purpose and mission and structure and rules and hierarchy. You always knew who to be and where to go and what to do. Some civilians think you sit on your assets all day ordering people around, and that you have no idea how to do anything for yourself. Some employers think that you can’t even handle someone saying “No” to you– except to scream at them or put them on report. They don’t understand that you can tap into a person’s internal motivations to do the things that need doing, and they’ll start by saying “Yes”.

If you miss your life in uniform (or don’t like your civilian life) then you’ll seek out your kind and join their tribe. You’ll become a member of a veteran’s group. Maybe you’ll find a job with a company that hires a lot of military veterans, or you’ll join a non-profit filled with military retirees. You may fit in with groups where there’s sports and coaching and referees. Or you’ll find a new identity with another tribe like “surfer” or “personal finance blogger”.

Image of Linkedin logo | The-Military-Guide.com

Start your job search here.

Nobody has offered you a job yet because you haven’t ramped up your job search. Your “available” date is too far away or you’re still on terminal leave. You have not yet put yourself out there for a full-power run of networking and resumes and interviews and a definite start date. A few employers won’t even contact you until 181 days after you’re retired (especially civil service and defense contractors) because of the military’s ethics regulations. The job search may be tedious or even discouraging but it’s straightforward (just like reaching financial independence). You’ll simply have to spend a lot of time hearing “We’ll call you” until one day it all comes together with ridiculous ease and you get an offer.

Get credit for that experience and those credentials: talk with your military base’s college support office– the one with “skills assessments” and “interest surveys” and “discovery software”. Your service’s website (the one behind the ID card login) may also have a program that helps translate your service record of billets, ranks, and training certificates to their civilian equivalent. When I was in uniform I thought the College Level Examination Program belonged to the military, but it’s run by an academic organization. Your base’s education services office can guide you toward the CLEP exams and other certifications– along with resume bullets.

You may be more suited for running a business than being employed by one. I’ve read literally hundreds of business plans over the last seven years, and most of them are boilerplate Word documents filled with business-speak. The good business plans are a few paragraphs long. The outstanding ones fit on a paper napkin. Read Chris Guillebeau’s “$100 Startup” and check out this veteran’s entrepreneurial resources spreadsheet. Your skill set may be “facility manager”, “repair service”, and “support contractor”. If you wanted to build a website then you could emulate the FixItNow.com Samurai Appliance Repair guy… another military veteran.

Do not suffer from the “military inferiority complex”. Frankly, the worst problem you’ll have to solve will be finding the people who want to work with you, and they’re probably already waiting for you a few months down the road into your retirement.

Right now your biggest “problem” is taking some time off to relax and rejuvenate. When you’re already close to financial independence then you can enjoy a few months, a year, maybe two. You will not go stale and you will not lose all of your “contacts” in your “network”. You could spend three hours a day updating your Linkedin profile and joining groups and reading books and blogs and forums. Take a well-deserved break during your terminal leave, read about “the fog of work”, and then start planning the rest of your life. You even get to change the plan every few years.

I particularly recommend chapters 8 & 9 from the book. Parts of those are archived in the blog between January-April 2011, but to enjoy all of the other personal stories you’ll have to borrow the library copy (or pay for the Kindle version).

Here’s an example of being a military veteran in the civilian world.

Last month at an investment lunch, I ran into a shipmate who I’d briefly served with over 13 years ago. We spent a few minutes catching up and then started swapping other shipmate’s names and sea stories. He’s spent most of the last decade pursuing a corporate career, and he was ready for a change. Now he’s come up with a brilliantly simple civil-engineering idea that can easily be designed into new homes or retrofitted to existing buildings.

As we parted (with more conversations to come at other lunches), one of my civilian friends mentioned that he’d seen me “light up” in a way that I rarely do. I was with a veteran who shared my background, my experiences, and my attitudes. We didn’t know each other particularly well during our earlier time together, but at that lunch we immediately bonded.

He was “only” in the military for seven years, but I know his training and experience just from hearing his duty stations. I know that he already has a leg up on at least 80% of the other entrepreneurs I’ve met over the years. He’s using his military skills (initiative, motivation, persistence) to turn an interesting idea into a business. I know what he could accomplish when he was in uniform, and I enjoy watching him build his startup.

You’ll find your avocation and your people too. Soon you’ll have the time, and right now all you need is patience.

Related articles:
Military retirement with low savings
Get on LinkedIn, get a job
Military veterans rate a FREE one-year Linkedin Premium upgrade
Will you work after military retirement?
Entrepreneur resources for veterans
Military retirement lessons learned
5 Ways to Ease the Transition from Military to Civilian Career
Lifestyles in Early Retirement: Habits and getting things done
During retirement: You will change. Your plans may change too.
Myths Of Military Retirement And Early Retirement
Reader Update: From The Military To Bridge Career To Retirement
Getting “the job call”

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.

4 Responses to Eight Reasons Not To Worry About Military Retirement

  1. Peter Gregory says:

    New reader to the site. 23 years active USN, retired in 2007, now working in private practice as a counselor/therapist. The biggest mistake I made in my initial transition from the military was the assumption that I had to have a “job”, work after retirement. Though as an 0-5 at 23, I was OK. Had a kid in college for another 2 years at that time, so I took the first offer I got post military. I had my retirement ceremony on the old Barry at WNY on a Friday, started the new job that Monday. Not the best of career or personal choices. I took the position more out of an innate sense I had to work, just because my military ethos or self-percepton required such

    Hindsight 20/20 I wished I would have taken some time post the Navy to let the dust settle and assess where I was and what I wanted post Navy. Or at least decompress a bit post a DC/HQ tour. In a far better place now psychologically and making that work-life-career-family balance work. But again, take time, assess who you are now and what you want. And then, only after that period of time move along to whatever the next chapter is. The big things of income and health care are off the table more or less for the vast, vast majority of military retired, this is your time now.

  2. Doug Nordman says:

    Thanks, Peter– great advice!

  3. Peter Gregory says:

    It cannot be mentioned enough that the primary single effect on the value of military retirement over time is not policy, chained CPI vs. traditional COLAs, or Tricare politics, or even reserve vs active duty retirement systems, but taxes, both state and local. Where you decide to get on with your life for the next 3, 4 decades, and how your military retirement is treated will determine a great deal of what you keep at the end of the day. Pennsylvania for example exempts all active duty pay earned outside the state, as well as any military retirement as well any retirement source of income. Over my working military career and now retirement, this has saved well over 6 figures of income that I had in my pocket, not the state. That sends 2 kids to college and then some.

    Many military retiree rich states, California, North Carolina, even Virginia do not afford such favorable tax treatment of military retirement pay. Vermont, Minnesota, RI are all examples of states where over many decades of life, a military retiree can leave over 6 figures of income on the table. Once local or city taxes are factored in a military retiree living in Stockton Calf. or Minneapolis can have close to 10% of their monthly retired pay taken away. In Pittsburgh, for example, that is zero. Hawaii as example exempts military retired pay, but local real estate and property taxes are astronomical. So do your homework, research and choose well, where you land post your military career. You could make or cost your self over 100K over a life time.

  4. Doug Nordman says:

    Good point about taxes, especially with many universities beginning to offer in-state rates to military residents stationed there.

    While servicemembers are on active duty, I think they should attempt to become residents of states that don’t tax military pay– but there may be other factors affecting that decision. After the military I think that there are many more important criteria for choosing where to live. Taxes should be a part of the overall decision, but I don’t think that taxes should be the most critical part of the decision.

    As to Hawaii taxes, Hawaii’s real estate prices are higher than most of the country. However the property tax rate is roughly 3.5 mills. This puts me in the position of owning property that’s assessed at a value of 3x-4x some Mainland properties, and yet I’ll still pay as little as half of their property taxes.

Please leave a comment here!

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s