November is National Veterans and Military Families Month, a time to recognize the service, dedication, and sacrifices of our nation's veterans and their families.For those preparing to retire from the military, this next chapter brings exciting opportunities, but also some important financial decisions. From understanding military retirement benefits to navigating healthcare coverage, transitioning to civilian life comes with considerations that differ from traditional retirement planning. Whether retirement is just around the corner or still a few years away, knowing what to expect can help you and your family prepare for what's next.
One of the first steps in preparing for military retirement is understanding the resources available through the Transition Assistance Program (TAP). This program helps service members prepare for civilian life by providing guidance on employment, financial planning, benefits, and other aspects of the transition. Depending on individual circumstances, certain portions of the program are mandatory.1
The process may include individual counseling, pre-separation briefings, financial readiness training, and reviewing available benefits. Retiring service members are encouraged to begin preparing as early as two years before retirement, with certain transition requirements due at least one year before leaving service. Be sure to check out the TAP website to find out everything you need to know.1
Another important consideration is understanding where your retirement income will come from and establishing a corresponding budget. For military retirees, income may involve several sources, including military retirement pay, Thrift Savings Plan (TSP) savings, personal investments, Social Security, and potentially income from a second career.
Military retirement pay generally falls under one of several systems, depending on when you entered service and the elections you made during your career:
- Final Pay: Generally applies to service members who entered before September 8, 1980. Retirement pay is calculated using final basic pay and years of service.2
- High-36 (High-3): Generally applies to eligible service members who entered before 2018 and remained in the legacy retirement system. Benefits are based on the average of the highest 36 months of basic pay and years of service.2
- Blended Retirement System (BRS): Combines a military pension for qualifying retirees with government contributions to the TSP. This system generally applies to those who entered service beginning in 2018, as well as certain earlier service members who elected to participate.2
Other retirement arrangements, including REDUX and disability retirement, may apply in certain circumstances.
Understanding which system applies to you, how your benefits are calculated, and how those benefits fit alongside your other financial resources is an important part of building a retirement income strategy. It's also worth considering how inflation, taxes, and potential changes in household expenses could affect your financial picture over time.
Healthcare is another important piece of the retirement planning puzzle. While military families may be familiar with TRICARE during active service, retirement can bring changes to coverage options, enrollment requirements, and out-of-pocket costs.
For those retiring from active duty, retirement is considered a qualifying life event. Generally, retirees have 90 days after their retirement date to enroll in an eligible TRICARE health plan to maintain coverage without interruption.3Certain retroactive enrollment options may be available, but it's important to understand the applicable rules and deadlines.
Dental and vision coverage may also require additional planning. Eligible military retirees and their families may be able to purchase coverage through the Federal Employees Dental and Vision Insurance Program (FEDVIP).4 Taking time to review these options before retirement can help avoid unexpected coverage gaps or expenses.
Of course, military retirement isn't just about understanding pension calculations and insurance options. It's also about deciding what you want the next chapter of life to look like. Will you begin a second career or transition directly into full retirement? Relocate closer to family? Travel more? Each of these decisions can affect your financial needs, cash flow, and long-term goals. A thoughtful retirement strategy should account for more than just the benefits you've earned. It should bring together your income sources, savings, investments, healthcare needs, and personal priorities into a plan that supports the life you want to build.
As we celebrate National Veteran and Military Families Month and recognize all the hard work and sacrifice of our military members, we want to share as much information as possible so you can retire with ease. Together, we can develop a personalized retirement strategy for you.
1. DOL.gov, September 29, 2025
2. Defense.gov, September 29, 2025
3. Tricare.mil, September 29, 2025
4. Benefeds.com, September 29, 2025