Leaving service comes with a stack of financial decisions that civilian planning guides simply do not cover — and several of them are close to irreversible. As a veteran who has made these choices personally, here is the checklist I wish every service member had in hand before they transitioned.
1. Decide what to do with the TSP
The Thrift Savings Plan is one of the best retirement vehicles anywhere — rock-bottom costs and solid, simple fund choices. When you leave service you can generally leave the money there, roll it to an IRA, or move it into a new employer’s plan. There is no single right answer. Leaving it in the TSP keeps those low costs; rolling to an IRA opens up more investment options and easier Roth conversions. What you should not do is cash it out — the tax and penalty can take a brutal bite.
2. Understand VA disability compensation
VA disability compensation is tax-free, and it does not reduce your military retirement pay the way it once did for many retirees. If you have a rating, it becomes a guaranteed, inflation-adjusted piece of your income floor — and because it is tax-free, a dollar of it is worth more than a dollar of taxable income. It is worth building your plan around deliberately rather than treating it as a bonus.
Tax-free, inflation-adjusted, and guaranteed for life — VA disability compensation is one of the most valuable income streams a plan can be built on. Treat it accordingly.
3. Take the SBP election seriously
The Survivor Benefit Plan decision at retirement determines whether your pension continues to a surviving spouse — and it is one of the most consequential and least-understood choices you will make. Declining coverage raises your monthly check now, but can leave a spouse with far less if you pass first. It interacts with VA benefits and life insurance in ways that deserve real analysis, not a quick signature at an out-processing desk.
4. Plan the healthcare bridge and the Medicare overlap
TRICARE is a genuine benefit, but it has its own rules, costs, and enrollment steps that change at retirement and again at 65, when it coordinates with Medicare. Missing a Medicare enrollment window can trigger lifelong penalties even if you have TRICARE, so the timing matters. Map it out before each transition rather than after.
5. Convert military skills and gaps into a civilian plan
- Life insurance. SGLI ends after you separate. If people depend on your income, line up replacement coverage before it lapses.
- Emergency fund. Civilian income can be less predictable than a military paycheck. A larger cash buffer smooths the transition.
- New employer benefits. A civilian 401(k) match is free money — capture it from day one.
- State taxes. If you are settling somewhere new, the state tax picture may look very different from your last duty station. Florida, for instance, has no state income tax.
Why this is personal
I served two tours of Operation Enduring Freedom, and French Capital Management is a Service-Disabled Veteran-Owned Business. These are not abstract topics to me — they are decisions I have worked through myself and now help other veterans and their families work through. If you are approaching transition, or already through it and unsure whether you got these right, that is exactly the conversation I am here for.
