By Carla Olivo, Director of Strategic Communications
Spending 20, 25 or 30 years in the military can lead a service member to feel a bit ‘safe.’ While no one thinks military service itself is ‘safe,’ there is a certain amount of confidence that comes with knowing to expect the unexpected. Military families brace themselves for Permanent Change of Station Orders or ‘PCSing’ every few years. It is considered part of the military lifestyle, and while moving frequently can be a challenge, military families always seem to adjust and even thrive under all the uncertainty.
And then there is retirement! Many a military retiree and their family are caught off guard by the seemingly endless decisions that come with retirement. As much as the military tries to prepare service members and their families, the retirement process can be overwhelming at times.
What is mandatory when you retire?
#1 Give notice to your service branch
All branches require at least six months’ notice of your intent to retire unless you have reached mandatory service limits that require necessary removal from active service.
#2 Schedule a final physical
It is advised to schedule a final visit to the doc at least six months out.
#3 Schedule Transition Assistance Program (TAP) classes
You will hear some say the TAP program isn’t worth your time or it doesn’t cover everything. Many people are not aware there are different TAP courses which serve different audiences (i.e., the Reserves, the Guard, mobilized reservists, deactivating reservists) TAP is currently the only program to assist the service member from Active Duty to Veteran status and Active Duty to Retired status.
Although TAP is mandatory for separating service members, both the veteran and their spouse should take advantage of this service. Many family issues, benefits, and rights are discussed at the TAP classes, so invite your spouse to participate so he or she understands the decisions you need to make as a family. There is so much information covered in the course; it is also recommended you attend twice.
Other decisions to be made include health care. Many sign up for Tricare for Retirees upon leaving active duty. Others might choose to be covered under their spouse’s insurance or through their 2nd career employer. The Survivor Benefit Plan (SBP) is a form of income insurance for a surviving spouse that will pay 55% of retired pay to the spousal beneficiary. The program requires a one-time election from the Service member and his/her spouse with 360 premium payments, or 30 years, of 7% of monthly retired income. The Service member is given a one-time option to drop this coverage at year two of the election.
Hmmm… SGLI vs. VGLI
There are additional insurance decisions to be made. The Servicemember’s Group Life Insurance (SGLI) coverage continues for 120 days after you leave active duty. Many convert their SGLI which is a $400,000 life insurance policy to Veteran Group Life Insurance (VGLI).
Guaranteed acceptance is the main advantage of VGLI. You cannot be turned down. There are no health exams and no increases in premiums due to tobacco use. As long as you pay the premium, you will be covered.
The downside to VGLI is the escalating premiums. VGLI only offers term life insurance, and premiums are based solely on age. So, the older you get, the more expensive it becomes. Many retirees find they can’t afford the escalating premiums which rise every five years.
Decisions on life insurance are better made early since most other policies are based on additional factors to include health history. Shop around to make sure the policy you choose, whether its VGLI or another company, is the best option for you.
Get Your Disability Rating
The disability rating you receive from the VA serves as a gateway to most VA benefits and even state benefits. The higher the rating, the higher the benefits. A 30% or higher disability rating factors in your dependents, so your benefits increase significantly.
The Survivors’ and Dependents’ Educational Assistance (DEA) program offers education and training opportunities to all eligible dependents (i.e., Spouse and Children) of Veterans who are 100% permanently and totally disabled and Veterans who are 100% Individual Unemployable (IU).
Why is a rating so important?
A lot relies on your VA Disability Rating. Your health care provider will ask for your rating. The state where you pay taxes will require your rating to offer relief. There are states that don’t tax military retirement at all and some offer that releif based on your disability rating.
Depending on the percentage you are rated at, a state may wave a percentage of your property tax or car tax. There are also educational benefits based on disability ratings that vary from state to state.
A 90-100% permanent disability directly caused by the Veteran’s involvement in military operations allows dependents 36 months of tuition in several states.
Schedule an appointment with a Veteran’s Service Organization such as the DAV or American Legion. They are trained to help and can assist you in submitting your application.
Review Your DD214
Make an appointment with a retirement specialist for an administrative review. You want to make sure the information on your DD214 is accurate in the characterization of your service. Check to make sure it correctly lists your length of service, your combat awards, etc. The Veterans Administration and the state will use this document to verify your veteran status.
There is a lot of uncertainty that comes with a change in lifestyle. Being prepared, making a useful checklist of what you need to do and when will help with dealing this huge transition that is retirement.
Carla Olivo is a veteran milspouse who has garnered numerous TV industry awards including the Associated Press award for Spot News Reporting and Documentary Reporting. She lives in Northern Virginia with her husband, a retired USMC Lt. Colonel, and their two children.