A good transition out of the military can set you up for civilian success. Similarly, a bad transition can make entering the civilian world a nightmare. As such, we’ll use this article to cover some major transition mistakes to avoid when you’re getting out of the military.
Specifically, we’ll discuss the following:
- Military Transition Mistake 1: Starting Late
- Military Transition Mistake 2: Not Having a Real Plan
- Military Transition Mistake 3: Blowing Deployment Savings
- Military Transition Mistake 4: Doing the “DD-214 Mic Drop”
- Military Transition Mistake 5: Not Knowing Where You’ll Live
- Military Transition Mistake 6: Ignoring Medical and Administrative Paperwork
- Bonus Mistake: Not Maximizing Your TSP Contributions
- Final Thoughts
Military Transition Mistake 1: Starting Late
A saying exists: the best time to plant a tree was 100 years ago; the second-best time to plant a tree is today. The wisdom behind this saying absolutely applies to military transitions. You’ll want to start planning your transition as early as possible. Haven’t started planning yet? Start today!
As a rule of thumb, you want to begin your transition planning no later than one year from the date you plan on starting terminal leave. From a military perspective, you’ll have a ton to do. This includes out-going paperwork and other administrative requirements, final medical and dental appointments, gear turn-in, and plenty of other items. For these requirements, your command will provide you a checklist to complete.
However, these military requirements only represent one part of your military transition. The other – arguably more important – part includes planning for what comes next. That is, planning what you’re going to do as a civilian. If you wait until the last minute to take care of all of the above military requirements, you won’t leave yourself any time to focus on planning your personal future.
Unfortunately, the military doesn’t always give troops the time they need to plan their transition, especially if you’re in a deployable unit. This puts a tremendous burden on the individual service member. If your unit isn’t going to give you adequate transition prep time, you’ll need to do a ton of this planning on your own time. Once again, the earlier you begin planning, the better.
Military Transition Mistake 2: Not Having a Real Plan
You may have a plan, but that doesn’t mean it’s a good plan. Officers and enlisted alike are frequently guilty of this. They develop transition “plans” that are really more like half-baked ideas. For example, starting a business is not a plan. On the other hand, developing a concrete business plan and securing funding to execute that business plan is a real plan. Bottom line, you have to ask yourself: do I have an idea, or do I have a real plan? An idea won’t pay the bills and put a roof over your head as a civilian.
Broadly speaking, most veterans take one of three paths as civilians. For each of these paths, you need to do certain things to turn an idea into a real plan:
- Attend school: If you plan on going to college, make sure that you have applied and been accepted to school before separating from the military. Next, make sure you have a concrete plan for where you’re going to live until school starts. Of note, the GI Bill only pays your housing allowance when you’re actually attending classes.
- Work: Make sure you’ve secured a job before transitioning out of the military. And, if your terminal leave concludes before you begin your new job, make sure you have a clear plan for where you’ll live until you begin work – and start getting paid.
- Retire and live on your military pension: If doing this, make sure you first confirm that your new, pension-based budget will cover all of your expenses. As part of this process, you’ll need to confirm exactly where you’ll be living as a retiree. Cost of living can vary wildly throughout the United States.
Military Transition Mistake 3: Blowing Deployment Savings
Even the best military transition plans can hit bumps in the road. When these obstacles inevitably occur, you’ll want to have a financial safety net. This goes back to the idea of starting your planning early.
After deployment, saving money is likely the last thing on your mind. You’ll probably want to go travel, celebrate, and buy things with your deployment cash. While you should absolutely enjoy your post-deployment leave, spending all of your deployment savings can hurt you during transition.
There are few times where you can save as much as you can on deployment – especially in a tax-free combat zone. As such, this savings can provide a key safety net (a.k.a. emergency fund) during your transition period. Once you stop receiving a paycheck every two weeks, bills can add up fast. Having some deployment savings to fall back on can significantly ease the financial stress of a military transition.
Military Transition Mistake 4: Doing the “DD-214 Mic Drop”
We’ve all seen it. A disgruntled troop finally receives his or her DD-214 and “drops the mic,” basically burning every single bridge in the process. While this may provide some immediate satisfaction, it can come back to hurt you for two reasons.
First, regardless of whether you’re going to school or work after the military, you’ll need professional references at some point in time. If you left service on bad terms, you likely won’t have any senior leaders willing to write you a letter of recommendation or serve as a professional reference.
Second, finding a job often depends heavily on networking, that is, meeting people in different fields. You may not realize it at the time, but you may cross paths with military peers or senior leaders in the civilian world. If you burned bridges with these people, they probably won’t help you with introductions to help your job goals.
You never know who you’ll cross paths with in the future. Accordingly, make sure you leave your unit on the best possible terms.
Military Transition Mistake 5: Not Knowing Where You’ll Live
This relates to not having a real plan, but it’s important enough to call out directly.
In the military, we have housing provided. We either live in the barracks, aboard ship, or in other government housing, or the military provides us an allowance to live on our own. Once you separate from the military, you’ll lose both of these options. Yes, the GI Bill will pay you a housing allowance, but that only kicks in when you’re taking classes. Similarly, a job will help you pay rent, but what will you do before you begin working?
You need to do some detailed planning here. Before separating, you need to confirm exactly where you’ll be living when you separate. More specifically, you need to know exactly where you’re living until you start making money – either through a job or GI Bill housing allowances. Once you have money coming in, renting a place becomes straightforward. Until then, make sure you have a detailed plan in place for where you’ll live.
Military Transition Mistake 6: Ignoring Medical and Administrative Paperwork
Transitioning out of the military can be an exciting time – you’re finally wrapping up your service and off to new adventures. But, don’t let that excitement prevent you from focusing on the details. If you ignore problems with your medical and administrative paperwork during transition, you can face major issues in the “outside world.”
From an administrative perspective, you’ll want to make sure all of your awards have been processed. This can directly impact future government work and contracting benefits, as well as VA medical treatment. You’ll also want to make sure all the paperwork for your final military move is accurate. You rate a final move after separating, but if you don’t complete the required paperwork, you may lose out on that money. These are only two examples, but the important takeaway is to make sure all of your administrative paperwork is accurate and complete prior to separating.
Related to administrative paperwork, you’ll want to ensure that all of your medical and dental records are accurate. If you have conditions that merit a VA disability rating, you need to make sure those conditions are actually documented in your medical records. Civilian health insurance can be extremely expensive. If you have service-connected disabilities, you may qualify for VA care. However, if your military medical records are incomplete or inaccurate, there’s a good chance you’ll miss out on these benefits.
Bonus Mistake: Not Maximizing Your TSP Contributions
This isn’t a transition mistake, per se, but service members hurt themselves financially if they don’t maximize their Thrift Savings Plan (TSP) contributions during their service. With the new Blended Retirement System, the government will match up to 5% of your savings. In other words, if you elect to save 5% of your pay in your TSP, the government will contribute an additional 5%, meaning you effectively save 10% of your pay.
This may not seem like a ton of money, but it can add up quickly. And, it can make a huge difference in your retirement savings. For example, let’s say you separate from the military at 25 with $5,000 saved in your TSP. If you let that grow in the TSP – which you can do once you separate – that $5,000 can grow to ~$53,000 in retirement! (NOTE: Assuming 35 years growth at 7% interest with no additional contributions).
It’s hard to think about retirement when you’re young. But, if you plan on separating prior to full military retirement age, contributing as much as possible to your TSP while still in the service can set you up for financial success as a civilian.
Wrapping up your time in the military can be extremely exciting. But, the transition period also includes many potential pitfalls. If you avoid making the above transition mistakes when getting out of the military, you’ll set yourself up for success in the civilian world.
Maurice “Chipp” Naylon spent nine years as an infantry officer in the Marine Corps. He is currently a licensed CPA specializing in real estate development and accounting.