Leaving the military for life after service is a big step for many veterans. A future without the familiarity of uniforms, dog tags and ranks may seem daunting and a tad confusing. Among the social challenges in post-service, veterans must also confront new financial obstacles and career decisions. AFBA has outlined some helpful financial advice for servicemembers preparing to make the transition into civilian life.
Research the differences of civilian finances
Many military members are given tax breaks in a variety of different sectors. Most do not even realize this. Be prepared to begin paying taxes you did not have to pay as a soldier. You should know that civilians pay state income taxes, as well as property taxes. Use the Internet, talk to your military contacts and consult a financial advisor to find out what changes you will see and how you can prepare for them.
Get the job your deserve
Finding a civilian job is a big part of the transition from military life. Check out AFBA's video blog on tweaking your resume so that it gets more views. You can also talk to veteran career services about ways to translate your military skills into a civilian career. A good job can boost your confidence in life after service and help you face any financial challenges that may arise.
Reevaluate your budget
Your military budget will likely look very different from your new civilian one. Creating a budget is an important step toward relatively stress-free financial management. Factor in your new income, housing costs and family expenditures to avoid overspending. A financial advisor may also come in handy during this process, as he or she would have the skills to assess your financial situation from a professional perspective.
Take what you can with you
According to Military.com the Thrift Savings Plan is a "tax-advantaged way of saving for retirement." Many servicemembers participate in this plan but may not realize that they can take the balance they have saved with them upon departure from the military. Servicemembers can opt to leave the funds in the TSP to gain interest, move the funds into their new retirement plan or transfer the balance to an Individual Retirement Account.
Remember to think of your health
Typically, military health benefits do not continue once you leave service. If your spouse does not have a plan that will provide duel coverage, you should begin your search immediately for a plan of your own. Research various medical, dental and vision plans to avoid paying expensive premiums. Your new employer may offer these plans, as well, so discuss options with your human resources contact in your company.
Plan for the future
It is never too early to start planning for the future. Once you leave the military, you will need to choose a civilian life insurance and retirement plan. You might also consider enrolling your spouse in a Survivor's Benefits Plan. If you have children, it is a good idea to open a savings account for them so that they can use the money for college or other future endeavors. Setting aside an emergency fund is never a bad idea, either. Life is unpredictable and having a backup account to cover you in times of need can be a huge comfort.
Life after service should be an exciting time for veterans. There are endless opportunities and new ventures to explore. Finance-related stress should not hold you back from pursuing the civilian life you want. Use the advice above to make the financial part of your transition from military service a little easier.