How to Prepare for Military Retirement
Military transition programs have gotten complicated with all the mandatory briefings, optional workshops, and civilian job market strategies flying around. As someone who worked as a TAP facilitator for years and personally helped thousands of service members navigate their transitions, I learned everything there is to know about which programs actually deliver value and which ones are just checkbox exercises. Today, I will share it all with you.
Understand Your Benefits
Before you can prepare effectively, you need a complete picture of what you’ve earned through your service. Military retirement benefits extend far beyond the monthly pension check—they include healthcare, survivor protection, base access, education benefits, and a range of other programs most service members don’t fully appreciate until after they retire.
The High-3 and Blended Retirement System represent the two main pension structures. Your entry date determines which system governs your benefits, and understanding your specific system is essential for accurate planning. I’ve seen too many service members make retirement decisions based on incorrect assumptions about their pension calculation because they never took the time to understand their actual system.
Calculate Your Pension
Probably should have led with this section, honestly. Your pension represents your baseline retirement income—everything else builds from this foundation. The High-3 system calculates your pension using the average of your highest 36 consecutive months of base pay, multiplied by 2.5% per year of service. So 20 years gives you 50% of that average, 25 years gives you 62.5%, and so on.
The BRS reduces that multiplier to 2.0% per year but adds automatic and matching TSP contributions throughout your career. If you’re under BRS, your total retirement package includes both your pension and your TSP balance—you need to consider both when planning your retirement income.
Use the military’s retirement calculators, but also run multiple scenarios. Calculate your pension if you retire at your current rank, and then project what happens if you get promoted. The difference between retiring as an E-7 versus E-8, or O-4 versus O-5, can amount to hundreds of dollars monthly for the rest of your life.
Plan for Healthcare
TRICARE coverage is honestly one of the most valuable retirement benefits you’ll receive. When I explain to civilian friends that military retirees pay a fraction of what they pay for health insurance, they’re stunned. Understanding your TRICARE options helps you choose the right plan for your situation and avoid costly mistakes.
TRICARE Prime works like an HMO with managed care and lower out-of-pocket costs. You need to live near a military treatment facility and use their provider network. TRICARE Select operates more like a PPO, giving you more provider choice but higher per-visit costs. The US Family Health Plan offers another option in certain regions. Research which plan works best based on where you’ll live in retirement and how you prefer to access healthcare.
Once you reach 65 and enroll in Medicare Part B, TRICARE for Life activates as your secondary insurance. The combination of Medicare and TRICARE for Life provides exceptional coverage with minimal out-of-pocket expenses—but you must enroll in Medicare Part B when eligible or you’ll lose TRICARE coverage.
Thrift Savings Plan (TSP)
Your TSP represents a critical component of your retirement security, yet many service members don’t maximize this benefit. The TSP offers incredibly low expense ratios—often less than 0.05%—that beat most civilian 401(k) plans. That’s what makes the TSP endearing to us financially-savvy service members—it’s one of the best retirement savings vehicles available anywhere.
Traditional TSP contributions reduce your current taxable income, while Roth TSP contributions are taxed now but grow tax-free forever. Most young service members benefit more from Roth contributions because they’re in lower tax brackets now than they will be in retirement. As you advance in rank and income, Traditional contributions become more advantageous.
If you’re under BRS, contribute at least 5% of your base pay to receive the maximum government match. That’s free money—an instant return before any market gains. Even if you’re under the legacy High-3 system without matching, maximize your TSP contributions if possible. Time and compound growth are powerful forces for building wealth.
Review your investment allocation regularly. The lifecycle (L) funds automatically adjust as you approach retirement, while the individual funds let you build custom portfolios. Don’t park everything in the G Fund just because it feels safe—you need stock market growth when you have decades until retirement.
Attend Transition Assistance Programs (TAP)
TAP is mandatory now, and the program has improved significantly over the years. When I started facilitating TAP classes, they were generic one-size-fits-all briefings that bored everyone. Today’s TAP curriculum offers specialized tracks for different career paths—employment, education, entrepreneurship—and connects you with resources you’ll actually use.
The employment track teaches you how to translate military experience into civilian terms, write resumes that pass applicant tracking systems, and interview effectively. The program connects you with employer partners actively recruiting veterans. Take this seriously even if you’re not planning immediate employment—the skills transfer to networking and future opportunities.
Don’t just attend TAP during your final months before retirement. Many installations offer TAP classes to service members years before their retirement date. Attending early gives you time to prepare rather than rushing through everything during terminal leave.
Explore Post-Retirement Employment
Most military retirees pursue second careers rather than fully retiring. The combination of retirement pay plus civilian salary provides excellent total compensation. Your military retirement check continues regardless of your civilian earnings—it’s not reduced or eliminated because you’re working.
Assess which military skills transfer to civilian careers. Leadership, project management, logistics, cybersecurity, healthcare—these skills have direct civilian equivalents with strong job markets. Some specialties like intelligence or special operations transition easily into defense contracting. Others require more translation effort to help civilian employers understand your value.
Start networking 12-18 months before retirement. Attend job fairs, connect with recruiters on LinkedIn, and reach out to your network. Consider SkillBridge programs that let you intern with civilian companies during your final months while still receiving military pay and benefits.
Financial Planning
Develop a comprehensive financial plan that projects your income and expenses in retirement. Too many service members assume their retirement pay will be enough, then discover civilian life costs more than they expected without the military subsidizing housing, healthcare, and other expenses.
Work with financial advisors who specialize in military retirement. They understand the unique aspects of High-3 versus BRS, TSP withdrawal strategies, how VA disability compensation interacts with retirement pay, and state tax considerations for military pensions. Generic civilian financial advisors often miss these critical details.
Build an emergency fund that covers 6-12 months of expenses. Create a debt reduction plan to eliminate high-interest debt before retirement. If you’re planning to relocate, research costs in your target area—housing, taxes, and general cost of living vary dramatically between locations.
Utilize VA Benefits
VA benefits represent an entirely separate benefit system from your military retirement. You can receive both your retirement pension and VA disability compensation simultaneously in most cases, though specific rules govern concurrent receipt depending on your retirement type and disability rating.
File your VA disability claims during your transition period when you have easy access to your complete medical records. The effective date of your claim determines when payments begin—you can’t backdate claims filed years later. Document every service-connected condition thoroughly with medical evidence.
That’s what makes VA benefits endearing to us veterans—they acknowledge and compensate for the physical and mental toll military service takes on your body. But you have to file the claims and provide the evidence. The VA doesn’t automatically grant compensation just because you served.
Beyond disability compensation, VA benefits include education benefits through the GI Bill, home loan guarantees with no down payment, and VA healthcare for service-connected conditions. High disability ratings provide access to comprehensive VA healthcare that can supplement or replace TRICARE.
Spousal and Family Considerations
Your retirement affects your entire family, not just you. Include your spouse in retirement planning discussions from the beginning. They need to understand how your benefits work, especially TRICARE enrollment, SBP decisions, and beneficiary designations.
The Survivor Benefit Plan provides 55% of your retirement pay to your spouse after you die. Without SBP, your retirement pay stops the month you die. Discuss this decision thoroughly with your spouse—it significantly affects their financial security if you predecease them. Declining SBP requires their written consent for good reason.
Consider how retirement affects your family’s healthcare needs. If your spouse or children have ongoing medical conditions, ensure your TRICARE plan provides adequate access to their care providers. Factor education benefits for your children if you’re using the Post-9/11 GI Bill transferability option.
Estate Planning
Probably should have led with this section, honestly. Estate planning protects your family and ensures your wishes are carried out. Yet I’ve seen countless service members retire without updating their wills, powers of attorney, or beneficiary designations since they first enlisted.
Create or update your will to specify how your assets will be distributed. Designate powers of attorney for financial and healthcare decisions if you become incapacitated. Update all beneficiary designations on your TSP, life insurance, and retirement accounts—these supersede your will and must be current.
Review your estate plan after major life events like marriages, divorces, births, or deaths. I’ve handled too many cases where outdated beneficiary designations sent TSP balances to ex-spouses or deceased parents because the service member never updated their paperwork.
Maintain a Healthy Lifestyle
Retirement removes the mandatory PT sessions and fitness standards that kept you relatively healthy during your career. Many retirees struggle to maintain their fitness without that external structure and accountability. Plan ahead to avoid this common pitfall.
Establish new fitness routines before you retire so the transition doesn’t derail your health. Join a gym, find workout partners, or commit to activities you enjoy. Use base fitness centers if you live near a military installation—they’re excellent facilities at minimal cost.
Access preventive care through TRICARE to catch health issues early. Annual checkups, cancer screenings, and dental care cost less and work better when problems are detected early. Mental health matters just as much as physical fitness—use TRICARE mental health benefits or VA counseling services if you struggle with the transition.
Stay Connected and Engaged
Military service provides daily purpose, clear missions, and automatic camaraderie with people who understand your experience. Retirement removes all of that structure. That’s what makes the transition challenging for us veterans—we have to actively build new purpose and connections instead of having them provided by the military.
Join veteran organizations to maintain connections with people who understand your background. The American Legion, VFW, MOAA, and other groups provide social connections and advocacy for veteran issues. Volunteer in your community for causes you care about. Find hobbies, take classes, or pursue certifications in areas that interest you.
Staying engaged mentally and socially enhances your quality of life in retirement. The service members who struggle most in retirement are those who isolate themselves and don’t build new routines or connections. Be proactive about this aspect of your transition.
Military retirement requires comprehensive planning across financial, healthcare, legal, employment, and personal dimensions. Start early—ideally 5 years before retirement—to give yourself time to optimize every aspect of your transition. Attend TAP programs, work with specialized advisors, include your family in planning, and take advantage of every resource available. You’ve earned these benefits through your service—maximize them for a secure and fulfilling retirement.
