Military Benefits After One Enlistment (part 2 of 2)

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(If you’ve found this page from a search engine, you’ll want to read the first part of this two-part post.)

This post answers the rest of a reader’s question:

“I was curious whether there are any benefits for people who got an honorable discharge after finishing the six-year obligation they signed up for but chose to not stay in until military retirement.”

Before you leave the service, you’re expected to attend at least one transition seminar to learn about your veteran’s benefits. This Transition Assistance Program, which is being relaunched as the one-week “Transition GPS” seminar, will take you through an exhaustive list of your transition benefits (which mostly expire within a few years after you separate) and your lifetime benefits. (Portions of TAP material are also found online and at each of your service’s websites.) We’ll cover most of that here, but as you approach your separation date you’ll have a refresher.

Reserve, National Guard, or civil service?

“Leaving active duty” involves several different options which also affect your military benefits. A small percentage of servicemembers elect to transfer to the Reserves or to affiliate with their state’s National Guard. One choice would be to continue as a “drilling Reserve/Guard” with the stereotypical “one weekend a month, two weeks a year”. The cliché can also be modified to include “the possibility of a one-year deployment every five years”. That’s been the practice for the last decade, although operations and funding may dramatically cut back that practice. This balance between your civilian life and the military allows you to continue to earn credit toward a Reserve/Guard military retirement (which normally starts paying a pension at age 60) while still earning drill pay and promotions. While you’re a drilling Reserve/Guard member, you’ll continue to have access to military exchanges, commissaries, and base facilities.

Another Reserve/Guard option is “inactive” or “Individual Ready Reserve”. IRR means that you’re not drilling or deploying, and you’re also not getting paid. You can continue to earn credit toward retirement by completing online courses or performing a few hours of certain duties, but not many people exert the effort. DoD’s main purpose of IRR is to keep you “on the books” in case of a war mobilization. Reserve/Guard servicemembers use IRR as a way to “drop out” if their family responsibilities or their civilian career have taken priority over their military career. If your enlistment included a Reserve obligation then it’s also a way to finish the rest of that obligation with few military duties— typically just the annual muster or records check.

Although you may elect to completely separate from military service, a few military benefits can carry over to federal or state civil service employment. I’ll cover those below in the “Employment” section.

Finally, when you leave active duty you can make a clean break with the military for a civilian career– no more uniforms, musters, or even a civil-service job. You’re still eligible for veteran’s benefits but you have no other military connection.

Early discharge for health or disability

Before we start, let me make a note about early discharges due to conduct, health, or disability. Many of the benefits described below assume completion of a full military obligation with an honorable discharge. However some of them allow eligibility with lesser discharges (general or other-than-honorable).

If you’re discharged early for health or disability reasons then you may still be eligible for these programs, but the qualifications (and degree of disability) become complicated. Even many of the Veterans Administration’s staff will be confused by requirements and overlapping qualifications and may (at best) direct you to another branch of the VA. At worst the overlapping eligibility may result in disqualification for that benefit.

The caveats and qualifications of health & disability discharges would turn this post into a three-volume book. Instead, when you note the requirements of these programs then be aware that they may be relaxed for health or disability discharges (especially the requirement for length of service). Even if you’re not qualified for a particular program, your discharge may qualify you for a similar program. If your question isn’t answered by this post’s program description or its linked reference, then check the blog’s “Military Medical” blogroll links for more resources. If that still doesn’t answer the question then use the “Contact Me” page or send me an e-mail. I probably don’t know the answer, but I know a lot of people who will.

For the rest of this post I’m going to assume that the servicemember finished a full obligation with an honorable discharge and no health/disability issues.

The GI Bill

Let’s start with the most popular benefit: the GI Bill. There are several versions of the program (depending on when you served) but the modern version is the Post-9/11 GI Bill that became law in 2008. (Eligible veterans served at least 90 days of active duty since September 11, 2001.) The program has a wide variety of options (or, from a cynical perspective, is tremendously complicated) and some parts may be based on your total months of service (up to 36 total months).

The GI Bill will pay for up to 36 months (eight semesters) of tuition and fees at an accredited college or training program. It will pay for professional licensing and certification exams & fees. It also pays a textbook fee. If you’re not on active duty and if you’re taking more than half-time classes then it pays a housing allowance. It also pays a small relocation allowance.

Another popular option of the GI Bill is the ability for some veterans to transfer their eligibility to their spouse or children. This benefit started in August 2009 and requires at least 10 years of service. I’m oversimplifying the eligibility requirements (which read like a nuclear reactor plant manual), but it essentially allows the servicmember to transfer some or all of their GI Bill benefits to their spouse and kids (who can share the benefits). A GI Bill benefits transfer to your family has a tremendous number of qualifications and limits that go far beyond this post, and in some cases it may be a better idea for you to keep the benefits for yourself.

Because today’s GI Bill was relaunched after 9/11, some veterans may be eligible for the older version as well as the current one. Make sure you’re reading about the Post 9/11 GI Bill and not the Montgomery GI Bill or some older version. There’s also a new feature of the GI Bill, the Yellow Ribbon Program, that some universities will participate in with the VA. If a school’s tuition & fees exceed the GI Bill limits then the school may voluntarily waive some fees and agree to limited VA reimbursement for others. Although this helps defray the cost of expensive universities or out-of-state tuition, it’s not available at all schools.

Older unemployed veterans may also eligible for the Veterans Retraining Assistance Program GI Bill. It’s only available for those who are between ages 35-60, unemployed, and not eligible for any other VA, federal, or state retraining programs. It only offers 12 months of benefits. The program started in 2011 but the process of qualifying & applying is a major source of complaints about the VA’s bureaucracy.

Medical and dental insurance

When you separate from the military and settle at your new location, one of the first things you should do is register at your local VA clinic. It only takes a few minutes, and your registration qualifies them for more federal funding based on their local veteran’s population. While you’re there you can have them review your discharge papers or your medical/dental records for any services that you may be entitled to. You’ll be placed in a priority group for the Veteran’s Medical Benefits Package and you may be offered limited space-available treatment. However this coverage is intended to support disabled veterans, and if you’re not disabled then you may be in the lowest priority group.

In most cases, veterans can’t carry their active-duty medical insurance over to civilian life. However one program is available for those who are involuntarily separated from active duty (or who were retained in support of a contingency mission), and a second is available for a limited time to ensure continuous coverage until you find a permanent program. The Tricare Transition Assistance Management Program and the Continued Health Care Benefit Program provide Tricare for 180 days after separation and for 18-36 months after separation. Both offer limited coverage and CHCBP requires you to pay premiums. If you and your family are in good health then you’ll probably find more affordable insurance online or from your civilian employer.

If you leave active duty for the Reserves or National Guard then you’ll be able to buy Tricare Reserve Select medical insurance. It’s relatively expensive and civilian employee health insurance may cost less. It’s intended to provide Reserve/Guard healthcare for those who don’t have insurance with an employer or their own business.

There are no specific government-funded dental insurance programs for veterans. If you’re on Reserve duty (drill weekends or active duty for training) then your unit may also be able to offer a dental checkup (part of your deployment readiness checklist). This varies throughout the country and will probably only include an exam or a cleaning.

If you’re not in the Reserve/Guard, then when you register with your local VA clinic they may also offer one dental checkup or cleaning. If you had a service-connected dental condition, then within 180 days of discharge you may be eligible for one-time treatment at a VA clinic. There are also a few other categories and situations where dental treatment may be offered as part of another program, especially VA Vocational Rehabilitation. In general, though, you and your family are on your own for veteran’s dental care.

Life Insurance

When you leave active duty, your SGLI policy ends. Within the next year and 120 days (I have no idea how these time limits are determined) you can convert your SGLI policy to Veterans Group Life Insurance. If you do this conversion within the first 240 days of leaving active duty, it can be done with only an application. After 240 days a medical exam is required. You can have VGLI coverage up to the limit of your previous SGLI coverage, so before you leave active duty you may want to consider raising your SGLI to the maximum amount.

However you should shop around for your insurance coverage. VGLI will insure you even if you have significant health or disability issues, but other insurance companies may offer cheaper policies for those in good health. You may be eligible for life insurance from a number of military-friendly companies like USAA. You should be able to buy term insurance for a lower rate than other types of policies, but if you want a more complex policy then VGLI may not meet your needs. Start with the insurance quote utility from CashMoneyLife.com or Jeff Rose’s life insurance website.

Employment

I’ll be blunt. The government is strongly motivated to help military veterans find jobs after active duty so that more volunteers will be motivated to join the military. In the long run it’s cheaper for the government to help veterans find a job than it is to pay unemployment or disability benefits, and nobody wants homeless veterans sleeping under highway ramps.

After you’ve spent an enlistment with one large government bureaucracy, it may seem convenient to seek employment with another large government bureaucracy: the federal civil service. As a veteran, you’ll be awarded a higher preference during the hiring process. If you’re considered a disabled veteran then you’ll have an even higher preference. If there’s a “reduction in force” (a layoff) then you’ll have a slightly higher preference for being retained. Your job security is better than almost any civilian employer.

The federal (and state) governments are probably the ultimate military-friendly employers. If you’re in the Reserve or National Guard then your civil-service employer already understands that you’ll need time off for annual training or deployments. You’ll be working with a number of other military veterans, and you may appreciate a work environment where your co-workers appreciate military service. Your years of duty can be converted to credit toward a civil-service retirement (you’ll have to “buy in” to the pension plan). You’ll be eligible for large health insurance plans and you’ll even be able to continue using the Thrift Savings Plan to invest for retirement.

Those are all attractive benefits, but you may have other career criteria. You may be living in an area that lacks a large government employer, and you can certainly make more money (with faster promotions) from most civilian careers.

If you’re seeking a civilian career then the Veterans Administration is still ready to help. The federal government offers tax credits to employers and loans to veterans starting their own businesses. In addition to the VA’s GI Bill benefits, veterans can also tap into Department of Labor programs to help assess their employment skills, translate military jargon to civilian terms, and get a personal assist for hiring interviews. The U.S. Chamber of Commerce has also started the Hiring Our Heroes program to bring veterans and employers together through education, skills translation, and career fairs.

Finally there are military-friendly employers. Companies like USAA are in the business of supporting their military members, and they know that one of the best ways to do that is to have veterans who already understand the challenges. USAA regularly hires veterans for at least 25% of their positions, and they’ll offer veterans the tailored employee training to move into a management track. Military transition companies like Bradley-Morris maintain an annual list of military-friendly employers who make a point out of reaching out to veterans with their own hiring-preference programs.

Other benefits

Even if you completely separate from the military for a civilian life, the VA will still help you buy a home. A VA loan offers guarantees to lenders that encourage them to lend you up to 100% of a home’s purchase price. You’ll still need to qualify for the mortgage based on your own income and credit score, and you may pay a slightly higher interest rate or financing fees, but the VA loan eligibility can bring home ownership within reach more quickly than if you saved the down payment on your own terms.

I haven’t even scratched the surface of state veteran’s benefits. For example, even though you have the GI Bill for your education, many states offer discounted college tuition (or even 100% scholarships) to resident military veterans and families. States also offer housing benefits, financial assistance, and employment programs for you and your family. There are also other free services, discounts on state taxes & fees, and preferences for certain training programs. In addition to the Military.com calculator linked above, contact your home state’s VA office for the latest information.

I’ll close with three other free summaries of your veteran’s benefits. The first two have a general overview with many sections where you can dive deeper into the details of a particular program. The first is Ryan Guina’s outstanding Veterans Benefits Guide at The Military Wallet and the second is Military.com’s “The Military Advantage” by Terry Howell. (Check your local library for The Military Advantage, but make sure you have the latest edition.) Both of them go far beyond the overview of this post, and if you have a question that I can’t answer then Ryan & Terry are my go-to guys to find out.

A final resource is Military.com’s benefits calculator. (This covers active duty, Reserve/Guard, veterans, retirees, and families.) Although this post already has a lot of detailed advice and references, the calculator taps into a database covering over 75 years of programs and benefits for anyone connected with the military. It’s not only the best resource I’ve found for you and your family to learn more about their benefits– it’s how I figured out my father’s veterans benefits after Alzheimer’s took away his memories of his service.

Did I miss an important program? Are you a veteran who has more to add to this post? Please share your advice & stories in the comments!

(Click here to return to the top of the post.)

Related articles:
Military benefits after one enlistment (the first part of this two-part series)
Joining the military during a drawdown
Guest post on EarlyRetirementExtreme.com: Join the military to retire early?
Join the military to get rich and retire early?: the rest of the story
Guest Post Wednesday: “My Road to a Reserve Retirement”
Guest post Wednesday: Financial independence on an E-5 paycheck
Should you join the Reserves or National Guard?

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WHAT I DO: I help you reach financial independence. For free. I retired in 2002 after 20 years in the Navy's submarine force. I wrote "The Military Guide to Financial Independence and Retirement" to share the stories of over 50 other financially independent servicemembers, veterans, and families. All of my writing revenue is donated to military-friendly charities.

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