Retirement and discharge paperwork
It shouldn’t be so complicated in a paperless electronic military, but after you leave you’re going to need a number of different pieces of paper for your own personal records. You’ll have to keep track of some of them for the rest of your life, and they’re almost impossible to correct or replace after you leave the service. Regardless of the details, here’s the big picture: start early, get it done before you retire, and save copies in more than one place.
You already have a retirement checklist, but let’s dig into the nitty-gritty details behind each one of the paperwork items. I believe that this is the world’s most complete retirement-paperwork summary because I’ve made nearly every one of these mistakes.
Let’s start with the summary itself. Each service processes the Certificate of Release or Discharge From Active Duty (DD Form 214) with their own specific procedures, but try to review your rough draft as early as six months before you retire. Don’t wait for your personnel-service branch to contact you– contact them and explain that you’d like to review a draft now so that you can fix any problems or surprises.
The DD-214 is the official summary of where you’ve served and what you’ve done. If there’s a special skill or qualification that you feel is important to your future benefits or your résumé, then make sure it’s on your DD-214– or make sure you understand why it can’t be done. Sometimes a skill will be left off your DD-214 because “it’s not in the system” or “you don’t have that rating” or “you don’t have that specialty code”. The processing clerk may be correct in this assessment, but they’re rarely in a position to do anything about it. This means that you may have to correct the errors with your service’s personnel bureau by documenting why you should have that skill or code. Over your years of your career it’s quite possible that a performance report won’t have all the right codes transferred over to a database, or a software conversion introduces more errors, or your codes are even dropped as a particular skill is phased out of the service. Get started early– document and updating this part of the system can take 6-10 weeks. Once you get the appropriate data in the personnel system then it’s much easier to make it pop up in your DD-214. It’s hypothetically possible to correct an error after you’ve retired, but it’s also a lengthy bureaucratic experience that may ultimately fail. You’ve spent years of training to get it right the first time, and the DD-214 is one of the most important places to make that happen.
After retirement, most veterans stuff their DD-214 into an “important papers” file and forget about it. This almost guarantees that it will be missing the next time you need it. Make several copies and include them with all your important papers: your copy of your service record, your medical record, and your financial records. Scan an encrypted copy onto your hard drive or upload it to a secure website. Archive another copy with a retiree organization. You won’t have to go looking for it when you apply for veteran’s benefits, exemptions on real-estate taxes, or other retirement benefits that might be available where you live.
For years veterans were advised to register their DD-214 with the city or county clerk’s office. Their official record of service would always be available to them regardless of loss, fire, or other disasters. Today many veterans are concerned about recording their DD-214 as a public record because it contains their Social Security number, which would then be publicly accessible and a risk for identity theft. For others it reveals more information about a military career than perhaps you would want available for public inspection. You may decide that the risks of identity theft and adverse publicity are not worth the convenience.
You’ll also want to include a copy with your will and your “In Case Of Emergency” file. Your DD-214 can then be retrieved by your representatives (executor, spouse, children). You, your executor and your family will be glad you did.
Over the years on active duty you’ve depended on your base’s legal office to take care of your wills, medical directives, powers of attorney, and other important family documents. Your retirement may involve moving to another state (or even another country!), finding new doctors and dentists, selling and buying real estate, and changing many other aspects of your life. Review your legal files and update these documents before you leave the command. You may even find a military lawyer at your base who can advise you on legal issues or other matters in your new location.
As you complete your command’s checklist and review your pay statements, make sure all your travel claims have been paid and that your government credit card is turned in. The Defense Finance & Accounting Service audits your final pay record and will eventually correct any oversights, but this could take up to a year. This is also the organization that issues your final military W-2 wage summary and your retiree 1099-R pension statements, so you don’t want to get a series of corrected forms during the middle of income-tax season.
While you’re planning your retirement timeline, pay close attention to your leave balance. Remember that you’ll continue to accrue leave at the rate of 2½ days per month right up until the day you retire, and that leave either has to be used or sold back. If you’re moving to a new location after you retire then you may be eligible to take permissive temporary duty in addition to using your leave. If your leave balance is exceptionally high after a deployment, then you may have to use some of it to avoid losing it at the end of the fiscal year! The rules vary for each service and deployment situation. Research your service and command policies to determine how you’ll use your leave and then schedule it around your other retirement actions.
The military considers a day of leave to be worth only a day of base pay– no allowances or special pays. If you decide to sell back a month of leave then you’ll get exactly one month of base pay and no more. If you take a month of leave then you’ll earn base pay, special pay, and allowances. While selling back leave gives you quite a bit of money to start your retirement with, it might make more sense to delay your retirement date to enjoy an entire month of leave while collecting not only base pay but all of your other entitlements. You have to decide whether time or money is more important to you, as well as the risk of your command recalling you while you’re “just” on leave.
If you decide to sell back leave, make sure that taxes are either withheld from your lump sum or that you pay estimated taxes on the amount. If you don’t have sufficient tax withheld from your pay and other income during the year (including the leave you sell back) then you’ll encounter late-payment penalties and interest charges on your tax return.
While you’re reviewing your pay statement, consider maximizing your contributions to the Thrift Savings Plan for that year. Whether you’re separating or retiring, you have one final opportunity to boost your account in the world’s largest and cheapest investment funds. As of this writing, the TSP funds charge an expense ratio of 0.03% (only three basis points!) and veterans may even be eligible to roll their IRA over to their TSP account. These are once-in-a-career decisions that will affect years of tax-deferred compounding. Review the TSP rules, talk with your command’s TSP representative, and make the decision well before your retirement ceremony.
Whether you plan to start a bridge career or become a diehard surf bum, consider whether you want to maintain your eligibility for a security clearance. Your command security manager will have the appropriate unclassified statement to put in your civilian résumé to refer to your military clearance.
At least six weeks before your retirement date, and before you detach from your command, give your DD-214 one more check. The personnel staff may not release your final copy until your retirement date, or they may be able to forward it to your new address.
Back at work, inventory all the gear that your job is entitled to and personally verify that the gear you’re responsible for is actually present or accounted for. Wherever possible, make sure that it’s under your personal control or locked away or transferred to someone else’s custody. The person intending to take over your job may balk at doing so until they have the tools they need. If something isn’t where it’s supposed to be, then either find it right now or else stiffen your resolve and start the investigation. It’s hard to imagine a worse way to spend the week before retirement than looking for “missing” objects.
Speaking of missing objects, hang onto your receipts for turning in controlled equipment and classified material– save them for at least three years. The command may not discover any “issues” until weeks or even months after you retire, and your receipt is your only proof that you didn’t lose anything. The command may also appreciate your assistance with clearing up any problems in their own records, and your receipts will be a big help to the investigating officer.
It goes without saying that you should also return any “borrowed” office equipment or supplies. While they may have eased your military burden through telecommuting or on official travel, they’re not yours to take into retirement. After years of pinching pennies on your command’s budget, it may be a surprise to learn that pens, paper, and other office equipment are surprisingly affordable at many fine retail outlets. Make a fresh start on your retirement by using anything more stylish than government-furnished office supplies.
While you’re dreaming about a fresh start, are you living in your retirement location or will you need to move? If you’re moving, when do you want to do that? Depending on your housing situation, you may be able to extend your stay until after your retirement. Although you may be eager to start your new life after the military, the last few months before retirement will be a very hectic time. You’ll be wrapping up the loose ends at work, putting the finishing touches on your retirement ceremony, and gathering all your family & friends. You’ll probably have a number of house guests over the next few weeks, and that’s a very difficult time to start sorting possessions for packing or storage.
If command operations and your retirement timeline permit it, try to have your retirement ceremony at least a week before you start packing out your household goods. That’ll give you time to finish detaching from your command, send off your last house guests, clean up after their departure, and have some time to catch your breath before you start preparing for the move. It’ll also give you a chance to figure out what you’re going to do with all those retirement presents and plaques!
You retirees: did I miss anything? Do you have any sea stories to tell about your retirement paperwork?