During retirement: take small financial steps (part 1 of 2)

Posted on February 3, 2011 by Doug Nordman


When you’re planning and saving for early retirement, your ER budget is only an estimate of your ER spending. It may be a very good estimate, and you’ll adjust it as you get closer to retirement, but only when you’re retired will you finally know what you’re really spending. It’s natural to keep a wary eye on finances during this huge life change, so you may find yourself hypervigilant of every expense and even worrying whether you missed something. Once you’ve retired, here are a few minor financial details to consider as you fine-tune your plan.

As long as you’re focused on your spending, review your budget and reassure yourself that you’re on track. A great starting point is examining all of your bills and services. For example retirees are eligible for discounts on home, vehicle, and liability insurance. Your home may be occupied more often, leading to fewer accidents or overlooked problems. Maybe you’re driving less or can shift to higher deductibles. If you’re not commuting every weekday then maybe you’re ready to drop the roadside-assistance membership. If you’re a homeowner, check your property-tax assessment to make sure that it’s in line with neighborhood values and that you’re getting your homeowner (and retiree!) exemptions. As you go about your weekly routine, ask the stores and businesses about their retiree or veteran’s discounts. You may even find discounts and double coupons for doing your business on a different day or at a different time– maybe the local thrift store has “Military Tuesday”. If you’re an early retiree then it may seem embarrassing or even silly to ask for a discount when you’re in your 40s, but stores will be happy to give you a break for shopping during their off-peak periods.

Do you still need to (or want to) continue all of your frugal habits, or even start new ones? Does your budget depend on you continuing to be frugal? Now that you have more time, will you become even more frugal? Or will you keep your habits at some convenient level simply because you dislike waste? Make sure your frugality still matches your values and doesn’t cross the line to deprivation. Sometimes it’s very hard to turn off old habits, even long after there’s no longer a need for them.  You’ll be retired for decades and you’ll have plenty of chances to adjust your spending and your lifestyle.

When you were working you may have avoided small expenses. Every impulse purchase cost you “life hours” of work that would delay your retirement date. Now that you’re in retirement, though, small expenses are just another part of the budget. If your finances have a good year then you can set aside more budget for small luxuries or charitable donations. In “not so good” years then these small expenses are the first spending cuts. The nice aspect of this consideration is that you now have a choice– the Girl Scout cookie sale is an indulgence, not a retirement-delaying event. You may even decide to focus only on the big financial issues and not worry about expenses that are only a few percent of your annual spending. Keep an eye on the big recurring life expenses like rent, mortgage payments, utilities, groceries, and dining out. Don’t worry about one-time spending decisions under $20– just track the total amount and stop when it reaches your budget limit.

When you were saving and investing for retirement it was much easier to cut your expenses than to raise your income. The same is true in retirement, but most of the retirement calculators assume that your retirement spending is constant and not variable. Few calculators can handle the spending flexibility, but you can!  The simplest calculators assume a constant spending over the remaining decades of your life, with perhaps annual inflation adjustments. Advanced calculators may handle economic “consumption smoothing” like the cost of a new roof, replacement vehicles, or a fantasy vacation. None of the calculators can model aggressive (yet temporary) spending cuts or decide how to shift expenses from one year to another.

So one of your biggest retirement advantages is your ability to tailor your spending to your situation. The roof has to be replaced someday soon, but you might be able to keep repairing it for another 6-12 months. You may not be able to do without a vehicle for long, but you certainly have the time to figure out alternate transportation for a few weeks while you’re shopping for bargains. If a bear market slashes your dividend income for 2-3 years then you still have the flexibility to allow spending to creep up temporarily, perhaps even as high as an annual rate of 5% or 6%, while you figure out how to cut expenses over the long term. And if your retirement timing is fortunate enough to enjoy several years of a bull market, then you could consider “taking some off the table” to raise your “emergency reserve” and “fantasy vacation” funds.

When you were working, you did some chores or activities a certain way at a convenient place because you had a limited amount of free time. Now that you’re not working, all of those chore and activity choices can be reviewed. A retiree’s time and labor are among their biggest resources and a great way to avoid “convenience” expenses. If you enjoy cooking then your grocery bill will drop as you buy fewer prepared foods and more raw ingredients. (Of course you may also spend more eating out!) If you’ve used a yard service or house cleaner then you can reconsider whether to continue it in retirement. It may seem a little silly to go to the gym for a workout when you’re paying people to burn at least as many calories cleaning your house, but maybe you can’t get the same workout at home and you hate housecleaning. If you enjoy gardening then you could start growing food and spices along with the landscaping.

You may be home more often, but your new daily routine could lower your utility bills. If the house used to be closed up all day while you were at work, you may be able to save during your retirement days by opening windows for natural heating and cooling. You could even ask your local utilities for a complete energy audit of your home. If the landscaping has always needed extra water or maintenance then consider changing to different plants. Decide whether to add better home insulation, compact fluorescent light bulbs, insulated windows, low-flow shower heads, EnergyStar appliances, and other money-saving improvements.  These changes all have an initial cost, but now you’re not moving every few years and you can enjoy the payback of lower monthly expenses. If your home-improvement skills are rudimentary then instead of tackling major projects you could just check for leaky toilets or make sure that the appliances are clean and working well. These tasks may have seemed impossible when you were working, but now your time and your labor are among your most plentiful resources.

You also have the time to become an even more diligent financial manager. You’ll already be making minor changes to your portfolio as you shift from accumulating to withdrawals. Now you can research other asset allocations or look for funds with lower expenses. If you’ve paid professionals to manage your investments or your taxes, meet with them to figure out what you can do better. Review your record-keeping and deductions and see what changes you could make. For example now that your income is lower, maybe it’s worth the tax savings to convert part of a conventional IRA to a Roth IRA. Most retirees have already chosen to educate themselves and manage their own investments without paying a financial adviser. As you become more proficient on your personal tax issues you may even decide that you can tackle your own tax returns.

Many military retirements involve a change of state residency from your active-duty domicile to your new place. While you’re re-registering your vehicles and getting a new driver’s license, check with your insurance company. They’ll learn about your new residency on their next database update anyway but they can also make sure you have the right coverage limits or tell you about more discounts. Now that you’re a card-carrying “local”, figure out what other discounts you may be eligible for with a local driver’s license or a utility bill with a local address. Your homeowner’s property taxes may change. Local parks and museums may have discounted (or even free!) admissions or local businesses may offer other bargains.

A few other financial issues may need your immediate attention. As you were retiring, your personnel and financial departments should have adjusted your tax withholding. Review that withholding to see if you need to pay more estimated taxes or if you’re giving the government too much of your money. If you sold back leave or received other lump sums as you left the service, you may have to pay estimated taxes now to avoid paying a penalty (plus interest) when you file your tax returns. If you’ve moved to a new state then your military pension may not be taxed, but you may still need to adjust your state withholding to make sure that you don’t have any unpleasant surprises at filing time. You may also need to consider county or other locality taxes.

Next post, we’ll consider how to handle your tax-deferred investments in the Thrift Savings Plan– and what other adjustments you may want to make to your investments.

Related articles:
How many years does it take to become financially independent?
Where to put your savings while you’re in the military
Simple ways to start saving
Frugal living is not deprivation
Start saving early
Tailor your investments to your military pay and your pension

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Posted in Military Retirement, Money Management & Personal Finance | Leave a comment

During retirement: The inevitable job offers

Posted on February 2, 2011 by Doug Nordman

As you blissfully go about your daily retiree routine, you’ll be blindsided by an epiphany: “Gosh, I could do THAT job!”

The realization could be triggered by anything– a clerk’s fumbling efforts at the home-improvement store, a chance encounter with a battle buddy, a news item about an old wingman, or a job posting on a website. The evidence has been there for a while, but now for some reason you’re thinking about a new career.

It may surprise you, even more, to realize that you’re absolutely right— you indeed could do that job, and you could probably find a prospective employer who’d be eager to have you start tomorrow. It seems intellectually challenging and emotionally fulfilling, it might be fun, and you’d even get paid for it!  Golly, you have to seize this opportunity before it slips away!!

Stop. Take a deep breath and reflect on why you’re suddenly so interested. You’re not just an old warhorse getting excited by the call of the trumpets. Your instincts may be correct but you need to think through the issues.

First, it’s always flattering when your potential is recognized. Is it enough that this intriguing opportunity validates all your years of training and experience?  It’s nice to feel this way, but will paid employment make you happy? Do the salary and benefits outweigh the dissatisfiers? Are you willing to trade your new-found freedom and flexibility for the inevitable disadvantages of returning to the workplace?

Second, do you “need” the job? Even when you’re financially independent there can be a dark suspicion of uncertainty in the back of your mind. Maybe your investments won’t do as well as you expect. Maybe the kid’s college will cost more than you planned or you’ll have to support an aging family member. You and your spouse want to travel someday and the extra money would be nice. Maybe (decades from now) your own long-term care will cost more than you thought. It’s possible that your attraction to the job is a way to resolve lingering financial concerns. However, you don’t want to start working again merely to realize that you don’t really need the money.

Third, is it fair to you and others to take the job? This is a commitment to an employer and co-workers, not just your self-indulgent entertainment. The company had to invest a significant amount of time and effort to attract a candidate who they expect will contribute for years. Consider how you’d feel if you were obligated to the job for at least a year. Would it still be paid entertainment, or would you regret your choice every time the surf came up?

Finally, would you be able to do “just” the job, or would your competitive instincts kick in again? Veterans are motivated achievers who find it difficult to hold back. After a few months on the job, would you start working longer hours and bringing the office home? Would you be pushing for the training and experience to get a promotion, and climbing the career ladder all over again? Is this what you had in mind when you were originally attracted to the job?

If the job still looks like a great opportunity then discuss it with your family and friends and be ready for a long-term commitment.

These last few posts have covered retiree guilt, volunteering, and the inevitable job offers.  They’re all tempting choices that seem to co-exist with retirement. But beware of the conflicts, and don’t create new problems for yourself or your family. When you were working you may have perpetually struggled with work-life balance, and in retirement, you’ll continue to struggle to balance these options. The only new skill you may need to learn is the ability to say “Thank you very much for your generous offer, but I can’t accept.”

Now that you’re aware of the issues, take control of your choices. Avoid drifting from one opportunity to the next. Be alert to how they’ll affect your feelings and give yourself the time to think through the situations. While each opportunity seems as if it may never be repeated, you don’t have to leap on every unsolicited offer. If you feel uncomfortable in your new lifestyle, or if you want to do more volunteering, or if you think you want to work again, then make a plan. Work through your feelings, discuss the situation with your family and friends, and start your own dedicated search. But don’t compromise your work-life balance for the sake of the job experience. You may decide that there are other things you’d rather do with your life, so be ready to say “Thanks, but no thanks.”

Related articles:
Dealing with “retiree guilt”
Volunteering for charity or neighbors
The transition to a bridge career
Retirement: don’t recreate your old environment

Posted in Career, Military Retirement | Leave a comment

Volunteering for Charity or Neighbors

Posted on January 31, 2011 by Doug Nordman

New retirees have the time to sort out their options and settle into their new lifestyle, but they’re still learning how they want to spend that time.  It can take a few months to feel their way into a new routine with new activities.  However, many charities and non-profit organizations have become experts at recruiting these inexperienced retirees to their service. This may not be a bad idea if it’s part of your plan. Hopefully, you considered volunteer service as part of the thought and discussions with your family and friends during the months before your retirement.

The good part of volunteering allows you to reconnect with family and community through a fulfilling mission. You’re “giving back” and “paying it forward” for those who invested in you (even if it didn’t look like such a hot investment at the time). The challenge of volunteering is that you can easily over-commit yourself and end up rushing among your new obligations. (Just as you used to work long hours on your military missions.)

If you’ve volunteered with an organization before retirement then this is a chance to become even more involved. But if you’ve never worked with a particular group before (or never even had the time to volunteer) then move slowly and do your research. Think about how you’d like to spend your time and why you want to volunteer. Look at the group’s website and annual reports to see how they spend your donations. Talk to other volunteers, especially those who’ve moved on to other activities and can speak freely about their old organization. Watch other volunteers to see how they’re being treated. Visit a charity’s offices to get an eye-opening glimpse of their staff and their work. See if they offer “free trials” or if they’ll let you work with them an hour or two a week before you make a bigger commitment. You don’t want to leap in and then discover that you’re burning out on something less rewarding than you expected.

Even if you think the charity is a good one, you may feel differently about the beneficiaries. Several retirees from all over the country have admitted that they’ve faced this surprise while volunteering for a home-building organization. The charity is organized and does a great job, both for their beneficiaries and their volunteers. However, the volunteers were often confronted with an attitude of entitlement from the beneficiaries.  In some cases, the volunteers even felt as if they were wasting their time on unappreciative complainers.  It was at odds with the volunteers’ own values and made for a very uncomfortable, even cynical, working relationship. Hopefully, this is an isolated case.

Before you start to work with a charity, take a moment to think about how long you want to continue the relationship. Do you see yourself still volunteering there six months from now? Two years? Ten years? What do you expect could cause you to burn out? You don’t have to discuss your thoughts with the charity, but have a clear plan in mind on what you’re willing to tackle and for how long you’re willing to be there.

Don’t enter the commitment until you’ve thought about your exit strategy. If the inevitable surprises aren’t acceptable then you can make a graceful exit on good terms instead of abruptly quitting. Better yet, each volunteer stint helps you learn about more volunteer opportunities with other organizations, and a less-than-enjoyable organization could lead to a long-term relationship with a wonderful group.

Don’t feel guilty if you don’t feel like giving your time just yet. You don’t have to set an example anymore, or at least not yet.  You’re just figuring out what you want to do with the rest of your life, and it may take months or even years before you feel as if you’ve figured out your own priorities.  Frankly, if you’ve just entered military retirement from a combat zone then it may be a while before you feel a sense of benevolence toward helping other humans.  Don’t immediately replace your military missions with a volunteer mission, either.  Take the time to explore your options and thoughtfully choose one or two activities that interest you.  There’s no need to recreate your work environment.

Don’t feel limited to volunteering your time, either.  You could just as easily serve your favorite causes by donating money or possessions. You certainly may not want to spend long hours on a commute into the city during rush hours or wear uncomfortable clothes or work under miserable conditions– this is service, not penance.  A charity’s particular mission or beneficiaries or volunteers may not be a good fit with you, but you may find another group that’s worthy of your financial donation.  You might not enjoy working at a homeless shelter, but if you can build furniture or sew quilts then they’ll be just as appreciative.

As you spend more time in your neighborhood, everyone will learn of your new retiree status. It’s a great way to reconnect and become more involved with the community, but don’t be exploited. It’s common to hear “Hey, you’re retired, you have the time, and you could help us with this!” It’s nice to be invited, but there may also be the implication that your retired time as worthless as your skills and experience are always available to help others. They may mean well but they may not appreciate that you’re already busy. From their work-related perspective, they may naïvely believe that your retirement frees up at least 40 hours a week to help other workers who are struggling to meet their obligations.

There’s no need to be offended by mistaken ignorance, but set limits and be firm about what you can or can’t do. Help as much as you want but be clear when you need to take care of your own chores or spend time with family. Even after you retire, you still have a right to enjoy your own personal time!

Related articles:
Help choose the military charities receiving donations from “The Military Guide” sales
More military charities for “The Military Guide” royalties
Retirement: don’t recreate your old environment
Retirement: relax, reconnect and re-engage

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Posted in What Do You DO All Day?!? | Leave a comment

Forget about who you were and discover who you are

Posted on January 26, 2011 by Doug Nordman

 

 

That homily makes a great e-mail signature or bumper sticker, but it also carries a warning to a particular segment of veterans.

The military excels at giving its members a ready-made identity: you’re not an individual, you’re part of a team. You take responsibility and behave at a higher standard. You’re a leader. The military culture emphasizes our identity (and holds us to it) by making it very clear to everyone else who we are and what we’ve done. We develop that identity through training and camaraderie to the point where some are literally willing to die for each other. After a couple years in your service you learn how to scan someone’s uniform, insignia, and decorations just like speed-reading a résumé. With a little more experience you can read the other military service’s résumés too.

We don’t just do it with a uniform, either. We document our service with body tattoos (even when we’re sober).  Navy deployments are frequently accompanied by “cruise jackets” custom-made in overseas ports with patches and appliques to show where you were and what you did. Our vehicles are decorated with personalized veteran’s license plates, warfare decals, and service ribbons. Homes and offices include “I Love Me” walls of photos, plaques, and citations. Front yards might even include flagpoles with service flags and other honors.

Can you imagine seeing this behavior at Intel? Ford? General Dynamics? If we saw a group of civilian employees behaving that way, would we make fun of their management or even think it a bit peculiar? My father and my father-in-law used to joke about their MegaCorp “Who I Was” jackets. Company windbreakers had the corporate seal on the chest (or splashed across the back) along with other corporate logos. Some employees would add patches for their divisions or certain projects. My father kidded his co-workers that (for a small additional fee) they could have their résumé embroidered into their jacket linings or bar-coded down one sleeve for easy reading. They used to think it was silly– and that they needed to get a real life.

Servicemembers reinforce each other’s identities, too. Especially at the more senior enlisted and officer ranks, it’s easy to become accustomed to an extra helping of ego-enhancing deference and respect. We’ve all seen certain individuals surrounded by staffs whose main goal is keeping them happy. Subordinates cater to their preferences, seek their advice, and even laugh at their jokes. (It’s not just the officers, either.) Of course we were never like that!

For those who strongly identified with their missions or ranks, retirement can be an unpleasant splashdown into very cold water. Suddenly you’re on your own, maybe even alone. No one seems to care how your weekend was or what everyone should be working on today. No one even asks your opinion, let alone scurries off to implement your directives. It’s hard to tell whether people miss your benevolent leadership, let alone care what you think. You may feel as if you’ve lost your identity and purpose.

If you want to keep your military identity then you might need to review your reasons for retiring in the first place.  Stay in the military as long as you can, and if you’re still enjoying your avocation then keep working as long as it’s fun.  But if you want to create a new identity, or find a new mission, then retirement is the opportunity of a lifetime. Humans are uncomfortable with change and retirement is one of life’s biggest changes. But rather than resisting the change and trying to cling to an identity, use your retirement to seek out who you want to be and what you want to do– for you– not for the organization.

Take a chance:  start with a blank slate and re-invent yourself. Who would you want to be if you hadn’t joined the military? What other “collateral duties” have you taken on over the years? You may already be a spouse and a parent. You have interests and hobbies, and now you can devote more time to them. You’ve had to look a certain way and dress a certain way for years, but now you can take control of your own appearance. If you’ve been taking care of other people for decades then you don’t have to stop now– find a volunteer activity where you can care for other people again. Even if you’re not ready yet to totally leave your military identity behind and re-invent yourself, you can take small steps. Join a veteran’s advocacy group or a military service organization for the camaraderie you’ve been missing, and then use that as a safe starting point to branch out to other activities.

While you’re figuring out who you are, don’t expect your family to step into the supporting roles filled by your former staff and soldiers. Not only will your family resist playing that part, but they’ll worry that you’re not handling the transition very well. They’ve spent years making sacrifices of their own as you made your personal sacrifices for your own mission and your battle buddies. Now you have an opportunity to acknowledge their sacrifices by giving them your time. Don’t try to lead them. Instead let them show you how they want to spend their time with you, and then you can show them how you want to spend your new retirement time with them.

You may have been in the military for one enlistment, or for more than 30 years. You may have retired in your 30s or kept working at bridge careers until your 60s. But if you’re close to the demographics of your generation’s lifespan then you’ll be retired for at least 25 years. If you retired earlier then you could be looking at four or even five decades of “not being in the military”. You’ll always honor and cherish your years of service, but take advantage of the chance to be someone else! No matter what else you do during the first few years of retirement, you can always go back to being the retired veteran.  It’s a safe place– but don’t make it a boring and stifling one.

There aren’t many references to link for this post, and I didn’t want to send readers shopping for cruise jackets.  However, if you’re having a particularly difficult time figuring out your new identity then you may want to try a free subscription to the My Next Phase newsletter.   Their newsletters are intended for hard-core senior civilian executives who have totally identified with their corporate careers and who have reluctantly retired (or been forced into retirement).  You can review their sample newsletters here.  It’s a dose of tough love for people who really aren’t sure they were ready to stop working and who haven’t planned the next phase of their lives.  It’s not for everyone, but it can help if you’re feeling totally overwhelmed by the prospect of figuring out what you’re going to do all day.

In the next few posts we’ll go into more details on handling other retiree issues. As Chief and other military retirees will warn you, even if you stop working there are still a few surprises ahead…

Related articles:
“But… but… but what will I DO all day?!?”
The transition to a bridge career
When should you stop working?

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Posted in Career | Leave a comment

The transition to a bridge career

Posted on January 24, 2011 by Doug Nordman

 

“The Military Guide” is full of advice and stories from dozens of servicemembers and veterans who hope that you’ll benefit from sharing their experience. I don’t tell their stories in the blog (you’ll have to read the book!) but I’ll post the stories that didn’t make the manuscript. As you read this next story, think about whether you’d like to see yours in the book’s second edition.

Here’s a comment on the “Fog of work” that grew into its own guest post from “Chief”:

That was a great read. I found myself shaking my head in agreement as I read through the article. If I could be so bold I would like to add a few of my thoughts on this topic– in particular the unique, almost surreal world in which members of the military find themselves submerged for the most part unawares.

Chief goes on to describe his retirement transition:

I joined the military in 1987 fresh out of high school with a whole lot of energy and very little direction. The Navy provided me the structure that I needed to “pull all of me in” and have a noble purpose for which I could bury my past and make a real difference. They provided me training, clothes, food, shelter, and a sense of community like I had never experienced before. I was a true believer and spent my every waking moment attempting to live up to the standards. I wanted to be the best “X” (whatever “X” happened to be) because the Navy told me that’s what leaders did: take charge and complete the mission.

At first those challenges were easy or mildly troublesome, but through the years with promotions came greater responsibilities. Real sacrifices (personal time, family) became factors. Remembering what I had been taught, I doubled down and work twice as hard, longer hours, and ultimately achieved the mission. Accommodations, medals, kudos, wall plaques.

This scene played out many times during my 20-year career. It reached a point for me personally, around year 15, where the “payoff” was not exceeding the “pain”. I found myself in a diminishing returns cycle professionally, personally, mentally and emotionally. The harder I tried to double down like before, the more unhappy and disgruntled I became.

I retired in 2007 for some of those reasons. I was burned out and tired. Unfortunately I realized that the hours upon hours of work away from family did not have a payoff, especially in the civilian sector. I was no longer “The Chief”, I was a newbie. It was boot camp all over again, only this time no one was telling what I should do or not do. I was totally unprepared for civilian life. I went through about a year of just trying to figure these strange creatures called civilians – their work ethic, social norms, ideas and attitudes about leadership. How are you supposed to land a job that doesn’t involve french fries? What about my leadership training? What about my work ethic ? My college degree? I received blank looks all around. They didn’t get me and I certainly didn’t get them. I realized the military wasn’t my job: it was my lifestyle. And I’m trying to sell ice to Eskimos.

So, I set about trying to understand my new place and work harder at developing relationships with the people I am surrounded with. Three years out and I can still only give my self a B- but I’m working on it.

I found that [the “Fog of work” post] struck a chord in me and brought me back to a time of some very scary moments. It was similar to the sensations I had during high-school graduation, my wedding, and the birth of my first child– that sense of foreboding and fear at the leap into the unknown. I discovered that all my “norms” were focused and centered around what the Navy considered normal. I found to my shock and horror that most civilians don’t share the same world view or perceptions and so I felt isolated.

Chiefs (historically and as a matter of record) are known for their over-inflated egos, sense of self-importance, and overall omnipotence. So, in keeping with long standing Naval tradition I felt obligated to document my part.

Chief went through the same transition-assistance seminars and had the use of the same self-assessment programs that we all used (or will someday use). He learned from the resources and paid attention to all the warnings but was still surprised by how much the military differs from “the civilian lifestyle”.

It might be tempting to sit around Monday-morning quarterbacking the transition, but I don’t think any of us would have done as well. (I know I wouldn’t have done that well– it’s why I never even tried in the first place.) However, keen our hindsight may be, I don’t think anyone can truly anticipate the fundamental differences between the military and civilian life– or the unpleasant surprises that come from those cultural gaps. It has to be experienced to be understood. The best that a servicemember can do is to be aware of the situation and be ready to change their transition plan on the fly.

Are there any particular techniques to help ease the transition? Well, sure– we’ve all been exposed to the hundreds of books and websites that help translate the military lifestyle to its civilian advantages. (Impact Publications produces some of the best and has one of the most comprehensive catalogs in the business.) Here are a few additional suggestions that are discussed more thoroughly in “The Military Guide” and the pocket guide:

1. Strive to be financially independent before you leave the military. For some of us that means a 20-year career and an aggressive savings program. (Of course persevering for 20 years may be worth the effort (or not) and it depends on a number of more important quality-of-life factors.) For many servicemembers, financial independence means completing a career with the Reserve/National Guard through a combination of drills and mobilizations. For a very few highly motivated and disciplined individuals it means saving an extreme amount of money while living a very frugal lifestyle, and then deciding whether or not to stay with military past the first obligation. (Yes, it can be done in five years but it’s not easy– see EarlyRetirementExtreme.com for the details.) However, you achieve that financial independence, and however long it takes, it gives you choices. You have fantastic flexibility in deciding how you want to handle your transition. There’s a huge pressure difference between “I have six months to live on before I need my next paycheck” and “I think I’ll just take a few years to explore my options”.

2. Keep doing your research and don’t leap on the first “opportunity”. Even a few months of savings can give you the flexibility to make sure you do it right the first time. One negative aspect of the military culture is its tendency to make you feel “worthless and weak” while barely capable of carrying out your duties at your current rank– let alone promotion. Don’t carry an inferiority complex into the civilian world. The reality is that every veteran has tremendous skills sought by every worthwhile employer, and that “first offer” is really just the first of several. Be courteous to prospective employers and treat each offer with the professionalism that it deserves, but don’t feel obligated to terminate the career search at the first “Yes!” Of course the more financial independence you have, the more choices you’ll be able to consider.

3. Include your “military lifestyle” standards in your job search. Maybe they’re a higher priority than a career that exactly matches your technical skills. Maybe they’re more important than your location or your salary or other opportunities. Your career-search criteria could include a military headhunter or military-friendly companies or businesses that have won Reserve/National Guard awards for supporting their employee’s military responsibilities.

4. Network, network, network. You already know this from all the transition programs, but treat it just like a new duty assignment. When you were offered a set of active-duty orders, you did a lot of shipmate research to find out if it was a good fit for you and your career. The same principals apply to a civilian career: find a culture that matches your lifestyle. Maybe you’ll even limit your search to the defense industry or electrical utilities or other employers who are known for their “wardrooms” and “Chief’s Quarters”. Seek out old wingmen and battle buddies who have been through the transition and ask them where the military culture fits into the business.

5. Pick a different type of career where you can still seek out mentors, gain knowledge, and help other people instead of just earning more money. Even if you’re not financially independent yet, you can leverage your military benefits to pick a field with other advantages. Work part-time while using your GI Bill (and its housing stipend) to improve your skills in a new interest. Ask your college if they need contract instructors for topics where you’re already an expert, or employees to help maintain their services & infrastructure. Look for temporary jobs or contracting opportunities at military bases near your chosen location. Consider working for a school, a volunteer organization, a non-profit, or federal/state civil service. (One retiree even joined the Peace Corps.) You won’t earn $175K/year with stock options or a company jet, but your stress level will be a lot lower. Veterans excel at training, counseling, and motivating– these sectors offer outstanding opportunities to do more of it and it may be the most satisfying work you’ve ever tackled.

6. Above all, treat the transition like a transfer to a command at a foreign culture. Overseas duty exposed you to experiences that most civilians will never see. Even if you just crossed a few state lines, you had to learn how to live with a totally different society and possibly even a new version of the English language. The military gives you lots of practice at handling big changes and teaches you how to handle all sorts of surprises. The “civilian culture” is just one more foreign experience where you’ll learn to acclimate. You’ll still have your same standards and lifestyle, but little by little you’ll learn the language, the rituals, and the subtle signals that are part of every culture. You don’t have to compromise or “give in”– just learn, appreciate, and enjoy the differences.

How did you handle your transition? What did you learn that wasn’t in the seminars, and what unpleasant surprises did you face?

The first edition of “The Military Guide” is being typeset this month, so now I’m collecting contributions for the second edition. Please post a comment or contact me if you have a story to share!

Related articles:
The “fog of work”
How many years does it take to become financially independent?
Frugal living is not deprivation
Retiring without a military pension
Retiring from the Reserves and National Guard

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