Transitioning to Civilian Life: Navigating the Financial Shift

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Navigating the Financial Shift

No matter why you're leaving the military, a big part of preparing for your civilian life is taking steps to proactively address the financial details of this change. Here are some tips to help ease the transition.

Make a Plan

If you're retiring, separating or being released from a period of at least 180 days of Active Duty, you must participate in Transition GPS to help you prepare. This program, developed by the Department of Defense and other agencies, includes pre-separation resources covering topics such as education and training, employment and career goals, financial management, and VA benefits. You'll also prepare an individual Transition Plan through the DoD Transition Assistance Program (TAP).

On your own, make time to do the following before you transition to civilian life:

  • Schedule final physicals and dental appointments for you and your family
  • Update your will and other documents through the legal resources on your installation
  • Review and correct your military records, which can provide access to certain benefits
  • Keep your Active Duty Discharge form safe—you'll need it to access Veterans Affairs programs

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Prepare a Transition Budget

Once you leave the military, your living expenses may rise. You'll no longer be receiving tax-free allowances, and your other day-to-day expenses could increase. Preparing a transition budget that considers both income and expenses will help you stay on track as you adapt to civilian life.


  • Will you be eligible for separation pay or cashing in unused leave?
  • What salary can you expect from your new career?
  • Will your spouse be working?
  • Will you be eligible for any veterans' benefits that provide ongoing income?
  • How will your retirement savings change? If you have a Thrift Savings Plan, know your options and make a plan for what you'll do with the money in that account. Here are your options:
    • Keep your money there. This will allow it to continue accruing interest, and while you can't make additional contributions, you can make inter-fund transfers.
    • Receive a single payment. All or a portion of the account can be transferred to an IRA or employer plan.
    • Request a series of monthly payments based on your dollar amount or life expectancy. All or a portion of the account can be transferred to an IRA or employer plan.
    • Request a TSP annuity. This is only an option if you have at least $3,500 in your account.


  • What will the cost of living (e.g., gas, food, utilities) be like in your new location?
  • How will your health expenses change? Are you eligible for continued military health benefits?
  • What will your housing costs include (e.g., rent, mortgage, taxes, insurance)?
  • What are your moving expenses? Are you eligible to have any of them covered by the military?
  • Will you need to purchase and insure a vehicle?
  • Will you have other expenses like commuting, clothing and child care?

Review and Revisit

After your transition is complete and your income and expenses are stable, update your budget to reflect your new circumstances. Then take time to review your financial goals, update your beneficiaries and refocus on your long-term goals in this next phase of your life.

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