bridge career

Military retirement lessons learned

April 4, 2013 by Doug Nordman · 15 Comments

A friend’s spouse retired from the military a little over a year ago, and I asked them to review “The Military Guide”. This relatively new retiree has a shadowbox full of awards and medals. They didn’t make E-9 (or O-9) but they were on the short list. Their military pension is well into five figures. A typical bridge career for their résumé of their military experience would be “Director of…” or “Vice President of…” at a major corporation. They’d be supervising a hundred senior staff, billions of dollars of equipment, and a budget of hundreds of millions of dollars.

This reader prefers to remain anonymous but they’re happy to answer more questions. You can post them in the comments below, or send them to me and I’ll pass them along.

Here are their comments:

Thanks for the opportunity to review your book. I think it’s great; it’s comprehensive and deals with a lot of the issues that every retiree needs to think about. Here are my comments and suggestions in no specific order:

1) The generational paradigm has shifted. Specifically, senior officers and enlisted personnel are marrying later, having children later and as a result, providing child care and saving for college much later into life. I have personally seen this amongst some friends and it is something that needs to be factored in. Along with “Where do I live next?“, military retirees need to be realistic about “How much do I need to make?” and that often drives “Where do I have to live?” We planned it well in that I retired during our child’s senior year of college and so knew we would be done with tuition bills (for a while anyway).

2) The age old question of the Survivor Benefit Plan. I spent days concocting different scenarios where buying term insurance (or another type of policy) was a more cost effective plan than SBP. The bottom line is: it isn’t. Most everyone should elect SBP. Now, if the spouse of the person retiring has a lucrative retirement plan of their own, then they should consider not doing SBP (because he/she will be taken care of regardless). But, as I noted before, SBP should normally be elected.

3) Retirees should not take the offered Veteran’s Group Life Insurance. There are many civilian term plans that are much cheaper (USAA and Navy Mutual Aid are two examples). So if a couple moves to a new location and takes on a $400K mortgage for a house, it might be wise to take out a $400K policy to pay off the mortgage in the event of the retiree’s death. Then the spouse has SBP.

4) I didn’t have a retirement ceremony and I don’t regret the decision. Truth be told, I had received all the accolades I could want, had more medals than I knew what to do with, and didn’t want to host a party for a hundred people to hear them say what a great person I was. I had received numerous gifts during my career. I had trained and mentored hundreds (if not thousands) of servicemembers. I knew deep down that I had left behind a legacy of well trained and dedicated people. Frankly, that’s all I needed. A piece of paper that was auto-franked by the President or the Governor wouldn’t make a difference. After more than a year of retirement, I still feel this way.

5) Make sure and calculate your terminal leave dates correctly to maximize your pay, allowances, and permissive househunting.

Note: while you’re on terminal leave and househunting orders, remember that during this time (up to 100 days) you’ll continue to earn leave at the rate of 2.5 days per month– as many as 7.5 more days. Almost everyone ends up selling back some leave, but the military will not give out (or buy back) a fraction of a day.

6) Jobs on the outside come with health benefits for you/family. TRICARE becomes the “alternative” coverage. Also, in many locales in CONUS, TRICARE Prime has now been discontinued (recent change). So TRICARE Standard coverage is the only option.

Note: more TRICARE information is in this post.

7) Your saving and portfolio management advice is good but if you are reading the book months before retiring from the military, the horse has already left the barn. In other words, it’s probably too late.

Note: “Plan B” is a civilian bridge career.

8) YOU CAN LIVE WHERE YOU WANT. We moved to a place with no base nearby, no military commissaries, and no other military support. There is a VA Center nearby but that’s it. Finding new doctors is a bit of a hassle but not all that bad.

9) I think that if the alternative to taxes is living in a state I don’t want to be in, then I will pay the taxes.

10) On the existential side, I tried to leave the military culture cold turkey. About a year after retirement, I am looking for a position with a company that does defense work. The toughest part of the transition is the loss of the cultural familiarity. It’s something everyone needs to experience and decide for themselves.

If you are a senior officer or NCO then you have grown up in a military culture that is very specific, comfortable, predictable and to some extent welcoming (for both you and your spouse). If you move to a place far from a military base, the likelihood that you meet or interview with someone who was in the military is very low. Turning a superlative military career resume into a résumé is challenging. I have found that my best success has been finding companies with executives who have served in the military and concentrating my search there. Linkedin is the best tool for this. I routinely get “thank you for your service” but the general public is absolutely clueless about what we in the military do.

Hawaii is completely different. Everyone you meet in Honolulu knows someone that is in the service or served themselves. It’s part of the culture of the islands. Many retiring people want to leave that military mindset and comfort zone and so go cold turkey doing it. I think though, that in my case, I went cold turkey, took some time to think about it, and wished I had considered further what the loss of that culture would mean (it’s like shedding a layer of skin).

11) If you were to write a supplement or “next edition”, I would recommend you include a discussion of the paradigm shift in hiring practices for corporations. Specifically, the automation of the entire process and the disappearance of hiring professionals. This is especially true if you choose an industry or vocation other than the military or defense. Many books have been written about this but it can be very frustrating and time-consuming sending your applications off into the ether, only to never hear from a company again.

Lucas et al are still doing a bang-up job….for junior officers and department heads. Although they advertise as such, their forte is not the senior servicemember market. In fact, I know of no senior officer (post command) who has gotten a job through them. Their model is based on working with specific companies in specific industries in designated areas of the country. For senior retirees who are looking to branch out (away from nuclear power, defense, manufacturing, etc.) and in a specific non-defense centric part of the country, it’s of little use. Absent using an executive recruiter, a senior job seeker in one of these out of the way places, is left to applying on the internet, networking and… patience. To better understand the new executive hiring paradigm, you might want to go to Amazon and download a book entitled “From Bedlam to Boardroom” by Colleen Aylward. She is a former Seattle-based executive recruiter turned author who after 20 years in the business decided that it’s better to teach people how to fish instead of doing it for them. It’s a fast read and very eye-opening. Added benefit is it’s got a lot of very neat tricks for executive job searchers.

I was very surprised by the last comment. Military-friendly career-transition companies advertise heavily (and on Linkedin) and I’d assumed that was the same as always. MOAA also seems particularly active in career seminars and transition services.

I decided to seek a reaction from the other side of the career-search table. My classmate Lee Cohen has enjoyed a full military career as both an active-duty submariner and with the Navy Reserve. After leaving active duty he started his bridge career with Lucas Group, and today he’s an executive senior partner. I’ve been in Lee’s Rolodex database since the late 1980s and I’ve sent him dozens of transitioning servicemembers over the last 20 years. He enjoys his work (he has autonomy, complexity, and fulfillment) and he has no reason to ever retire. (Submariners take note: both Lee and I have managed to rise above our conduct records and leverage our nuclear power training. You can do this too.) Any servicemember, officer or enlisted, who’s leaving active duty can contact Lee directly or at Lucas Group.

Lee responded:

Here’s the tough reality for senior officers who want to start a corporate career: the number of non-Beltway companies that will hire an officer and pay an executive compensation package right out of the military is very very small. We work very hard to surface those opportunities, and have the most success with supply and technical officers (nukes, civil engineering, engineering duty). But the non-technical O-5s and O-6s with BAs have a really tough go of it.

There are bunch of outfits that place technical sailors. There are a bunch of outfits that place JOs. But Lucas is the only outfit that places senior officers (that I know of). And I’ve placed a good number of post-command officers (I placed another classmate last week!). So it does happen! Hope that helps!

This retiree’s story is still getting to the “happily ever after” part, but they have the safety net of their military benefits. Although their bridge career is heading in a new direction, they’re close enough to financial independence to have the flexibility and time to step back and try a different plan. They’ve also learned a few new things along the way (personal as well as professional) that should further simplify the search.

When you leave the military, be aware that your bridge career search might not end with the first employment contract. You’ll evolve, and your needs might change too. Once again, when you have financial independence then you have choices!

Note: Most of these related links were excerpted from “The Military Guide to Financial Independence & Retirement“. If you like what you read then check your local library for the book– or you can buy it from that link.

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Filed Under: Finances, Military · Tagged With: bridge career, early retirement, financial independence, Lucas Group, military, military retirement, transition

Guest Post Wednesday: Update on Ben’s bridge career

January 23, 2013 by Doug Nordman · 4 Comments

[This guest post is from Ben, a military retiree who achieved financial independence before he left active duty. When he retired he was confident in his financial planning (it's better than mine!) and he was pretty sure he'd find plenty to do all day. However he also wanted to see what he could do in a civilian bridge career and whether he'd overlooked any financial issues. This story stands on its own, but you might want to read his earlier guest post on starting a bridge career . If you’re interested in guest posting, please see our guest posting guidelines.]

I am now on “Chapter 2″ of my bridge career.

I am not sure how long this chapter will be or if there will be any more chapters. I have made the transition from the familiarity and madness of DoD civil service. It was not until I got on the outside that I realized misery loves company– and it is alive and well in my previous organization. It turned out to be the typical high-pressure environment with long hours, urgent phone calls, crisis requests for program data, and jockeying for funding. I also did not realize just how I took for granted the caliber of my co-workers. In my opinion the military has the most proficient workforce (both active duty and civilian) in the entire federal government. While they may not be the most efficient, collectively they understand how to get things done.

I started my bridge career with a civil-service mentor who I knew from our active-duty days. When I was about nine months into the quagmire, I told him that I was going to resign at the one-year point. I had made a lot of progress in what he had asked me to do and I felt the task would be complete in the near future. I also had laid the foundation to recruit a replacement for my position. I had decided I was done in the next 90 days as no amount of money was worth how I felt each day going home. Although I did enjoy being with my friends, this adventure was certainly not how I wanted to spend the rest of my life. Been there done that!

I guess at some point I had applied for the position I have now. To be honest I don’t remember applying for it or even reading the announcement– I had just been applying for everything in the salary range and geographical area that hit the USA Jobs website. I was really not job hunting other than seeing if I could make a transition. I was just going to move into early retirement and do whatever I wanted.

Two weeks after I had told my mentor I was leaving I began to get calls for job interviews with other government agencies. I went into the interviews with not a care in the world. However I still did my research and practiced for them and put my best foot forward. The interview process was actually fun because I viewed it as no pressure. I felt that if I was going to continue working it would have to be in an organization that fitted how I wanted to spend my days. I was interviewing them as much as they were interviewing me. Some of the job offers were more of the same as what I was experiencing in DoD and the organizations were in desperate need of my skills. I don’t think my skills are any better than any military member who was my peer near the end of my military career. Believe it or not the military really does prepare us for life after the uniform.

I transferred from DoD to another government agency just after the one-year point of my bridge career. While I am still learning the specifics of the organization’s language and structure, I can tell you that what in DoD I consider basic skills are in high demand on other areas of the government. There seems to be a lack of leadership, critical thinking skills, and the ability to identify and package the information that my superiors need to move the organization forward. My supervisor, colleagues, and subordinates are in awe at what I bring to the organization. I really just do what I did for 20+ years in the military. I have no desire to move up in the organization, as I would rather help someone else reach for that brass ring.

I am helping a couple of friends through their military retirement transition. It’s also helped me realize that I don’t miss active duty at all. It’s rewarding to apply the skills that I gained in my former life to a variety of areas, and it’s certainly filled up my bank account. But most of all I am enjoying being a subject matter expert and keeping a balance in my life. When I decide to end this chapter of my bridge career, I’ll have answered my questions about work after the military– and I’ll know what I want to do with the rest of my life.

Reminder: This is a guest post. Please be polite, or the comments moderator will kick in.

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Filed Under: "What do you DO all day?!?", Finances · Tagged With: bridge career, early retirement, financial independence, military, military retirement

Will you work after military retirement?

November 8, 2012 by Doug Nordman · 3 Comments

(You’re reading today’s post while I’m starting the USAA blogger conference. Sorry, I won’t be livecasting to Facebook or Twitter every 10 minutes– I’ll be paying attention to the speakers and asking good questions! I’ll also try to have a conference wrapup post ready to go for Monday.)

A reader asks a perennially popular and critical question:

“I was just curious if there were any retirees who while on active duty were planning on not working after they left the military. Did they stuck to that plan? Or after a year or two either the money didn’t go as far as they thought or they just got bored and wanted to go back to work? For the last couple years I’ve been saying that between my savings and my retirement that I don’t plan on working after retirement and instead will just tinker around the house, read, and generally keep myself busy. My spouse thinks I’ll get bored and that seems to be the typical response. I’m wondering if there were others out there who thought the same and once they got there realized it wasn’t all it was cracked up to be.”

Here’s the answer that I’ve developed over the years:

This is exactly why we wrote the book. “The Military Guide” may be at your local library. You can also read the first chapter free (that link downloads the PDF). Or you can read a similar (shorter) blog post.

The bogey of “But… what will I DO all day?!?” is the #3 concern of every retiree, not just us Type A military. (The top two are inflation and healthcare– but military pensions cover those issues.) The answer to your spouse’s (very legitimate) concern is that you’ll be responsible for your own entertainment. You’ll stay out of your family’s space and create your own life with them, not just through them.

The dirty little retirement secret is that it’s actually easier to let traditional corporate employment provide your structure for you. MegaCorp offers a chain of command, an OPORDER, and a Plan of the Day. All you have to do is fill in the details of a rush-hour commute, a workplace uniform, and liberty plans.

However without MegaCorp you’re still perfectly capable of filling in your own daily schedule. You’ll set your own goals, and at first you’ll aim higher & faster than you’d expect. You’ll think that you’re going to tinker, but you’ll get ambitious and renovate a bathroom. You think you’ll read but then you’ll end up posting about it to discussion boards and maybe starting a blog or a book. (Or, um, maybe both. I’m just sayin’.) You could get fat, but you’ve seen enough of your friends & family drop dead prematurely so eventually you’ll get back on the fitness routine. You’ll go for a walk and end up training for a 10K. You could drink heavily or do recreational drugs, too, but eventually you’ll decide the long-term risks aren’t worth the short-term thrills. You’ve carried out a military career without going off the rails, and you won’t go off the rails just because you’ve retired. You may choose to wander for a while, but you won’t get lost.*

Socializing is another scary question that answers itself. You don’t have to wait all week for your (still working) friends to finish their chores so that they can come out and play. You can find more friends– if you’re extroverted then you’ll get out & about and find new people to socialize with. Church, volunteer work, neighborhood walks, veteran’s groups, hobby groups, online discussion boards… it’ll happen faster than you expect. If you’re introverted then you’ll suddenly realize that you can socialize on your terms, not for workplace expectations. There are some days when I’ve had quite enough of my fellow humans and just want to be left alone. Other days I go surfing or train taekwondo or just Facebook a shipmate to get together that weekend. The difference is that you generally get to set the pace. You’re not going to be following your spouse & family around expecting them to provide your social interaction, either. Unless they volunteer to provide your social interaction.

Believe it or not, you will tend to overschedule and oversocialize yourself– you probably haven’t had enough practice at managing your own time in this much quantity since you were on summer vacation from elementary school. The good news is that you have plenty of time & flexibility, and you have the rest of your life to get better at it. You’ll be exhausted at the end of the day, but at least you have the freedom to take naps when you want and maybe even sleep in. If you start a project but if you’re not feelin’ it then you can usually put it aside and do something else– because you don’t have to worry about finishing the project before liberty expires or your leave chit runs out. I’ve been practicing retirement time management for over a decade and there are still days when I realize that I’ve just overscheduled myself out of a nap– or that I don’t want to go to a meeting after all, even though it seemed so interesting when I signed up for it.

One socially acceptable way to answer the concerns about “You’ll be so bored!” is to tell people that you’re going to take a few months off to enjoy life with family & friends, and then you’ll reassess your plans. You won’t lose your “network” or your “contacts”, and potential employers don’t care about a short break. It gives you plenty of time for introspection & self-discovery.

The retirement decision is not irrevocable. I still haven’t written a résumé, let alone networked for a bridge career. Oahu is not exactly a hotbed of employment, yet over the last decade of retirement I’ve had four serious unsolicited job offers with six-figure starting salaries. Some came from the shipmate network, others came from my retirement network. They’ve been tempting (and ego-enhancing) but I’d have to give up some freedom and a lot of flexibility. I’m financially independent, and I value my time more than I value acquiring more money. I enjoy the idea of work but I’m put off by the dissatisfiers of rush-hour commuting, workplace attire, department meetings, mandatory training, mandatory high-stress socializing, office politics, the boss’ self-imposed crises, deadlines… you get the idea. There are even retirement days when I don’t feel much like writing, let alone blogging, but then I throw a longboard in the car and go recharge my batteries.

The last decade of retirement has helped my spouse and me grow closer in a way that’s better than we’ve ever been. Retirement has given me the freedom to “be there” as our daughter grew up. I’ve been able to drop everything and fly 4000 miles to take care of my father– twice. Spouse and I have traveled (and we’re going to do more). I’ve had many wonderful experiences and learned to do several new things. I’ve been able to explore projects that I never expected to bring to a conclusion (the book was on the drawing board for over eight years). I’ve acquired a lot of knowledge. I’m pretty sure that I’ve grown as a human being. As satisfying as traditional employment could be, I’m skeptical that it affords the opportunities I’ve had during retirement. I’ve had some pretty bad experiences during retirement, too, but I suspect that they would have been even worse if I was spending 40 hours/week at the office.

Today I can’t really remember how I ever found the time to go to work.

So the answer to your retirement question is: you’ll work it out. Promise your spouse that you’ll be responsible for your own entertainment, especially if they want to get you started with their “Honey Do” list.

You could also use Ernie Zelinski’s “Get-A-Life Tree” as a starting point. (I’ve had one on my desk for over a decade, but I haven’t made the time to work on it yet…) If you enjoy that exercise then get a library copy of Ernie’s “How to Retire Happy, Wild, & Free“.

The reader got back to me a few days later:

“I just want to say hi and thanks for replying to my retirement question. Your comments hit my feelings/concerns on the head and make me feel comfortable with my current planning efforts to be financially ready to retire in five years. Thanks again!”

* That sentence was a literary allusion(!**):
All that is gold does not glitter,
Not all those who wander are lost;
The old that is strong does not wither,
Deep roots are not reached by the frost.
– J. R. R. Tolkien, “The Lord of the Rings”

(** My high-school English teacher just shed tears of shock & joy…)

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Filed Under: "What do you DO all day?!?" · Tagged With: bridge career, early retirement, financial independence, military, military retirement, PostAWeek, socialize, Zelinski

Starting your bridge career after the military

February 15, 2012 by Doug Nordman · 10 Comments

Long post today: I have 2400 words of real-life examples for a reader’s question.

When I started thinking about a book, I wasn’t writing “just another job-search manual“. I wanted to talk about early retirement and frankly, I was scared of the competition from other career-transition authors. However I get questions every week about bridge careers. If you’ve pushed for financial independence, even for just a few years before separating or retiring from the military, then you have enough flexibility to take the time for a thoughtful job search. You don’t have to sprint to sign a job contract before your terminal leave is over! There are dozens of books and tools to choose from (see the links near the end of the post) and if you have a specific topic area then I can even recommend specific websites and books.

Here’s an e-mail from a long-time reader:

Hi Nords,
I found the Early-Retirement.org site about seven years ago after a Google search for “is military early retirement possible”. I have spent many late nights reading the forum, learning a lot! My question for you, is that you always comment on the job offers that “come out of the woodwork” when you retire, and I wonder what type of jobs you are referring to.
My husband is eligible for retirement in 2.5 years. He is really experiencing burnout. We would not be able to fully retire, and would need a bridge career, but he just doesn’t know what is out there.
Your name came up in our conversation today, after a particularly frustrating day for my husband.
He was relating a story about a Navy guy who got news of a bad assignment. I said that according to Nords, they really start messing with you the last few years of your career. He laughed that I get my information about other services on a retirement forum, and said “Why don’t you ask Nords what kind of jobs are out there after you retire.” So I am! Thanks for your time, and all your past posts!

Back in 2005 a survey conducted by Russ Graves, a retired officer, concluded that 85% of retired officers immediately returned to civilian work after the military. This was independent of military career satisfaction, wealth, expenses, and other lifestyle factors. However in the more senior ranks, the percentages returning to civilian work were even higher. As unbelievable as the statistics may seem, it’s easier for military retirees to get a job than to stay retired.

In the middle of a tough tour, your spouse is facing long hours and burnout. You’re both a bit too busy to sit back and watch the world around you, occasionally commenting to each other “I could SO do that job“. When you’re spending 60 hours a week at work, then pursuing financial independence is less effort than tackling the scary job search. After most military retirements, you face the stress of relocation and perhaps the financial pressure to “get a job”. You may not know the local employment market in your new retirement location, you might not know anyone there, and you don’t feel comfortable taking 6-12 months to find a bridge career that you really enjoy.

Yet there are thousands of jobs out there for military retirees. We have skills. We have experience. You’ll be surprised at how urgent the hiring standards can be. Your biggest problem is networking, and your second-biggest problem is being patient enough not to leap on the first offer.

Part of our employment fear comes from the military’s self-perpetuating culture of constant criticism & humiliation. Our chain of command tells us every day that we’re barely capable of performing at our current rank, let alone getting promoted. We need to “pull our act together” and “step it up”. We hear about how hard it is to find a job in the civilian world and we get scared.

What employers want

The reality is that you & spouse are members of a demographic in high demand. Employers are seeking the skills that you’ve developed over two decades: “bringing order out of chaos”. It’s walking into a room with people, learning how they do their jobs (or how they’d like to do them), listening to their problems, and figuring out how to get things done. Maybe it’s writing a document or preparing a presentation. It’s cutting through some sort of workplace bureaucracy or figuring out who to call for help. It’s making coworkers happier & more productive so that they can form a team and solve problems. In the military we use squishy words like “leadership” and “taking care of our people“. In the civilian world it’s called “middle management” or “operations” or “program manager” or even “consultant“.

The corporate world is full of waste, inefficiency, and needless drama. Companies want people who can show up regularly, healthy & sober, and ready to work. They want employees who can communicate. They want workers who can recognize a good idea when they hear it. They want people who can remain calm under pressure. Judging from some military commands, our resumes should have bullets like “Knows how to get yelled at” and “Doesn’t get upset about deadlines“. They want people who have “common” sense (not so common) and who can think. They want people who can talk in front of a crowd. Being able to do math is a bonus. They can teach you all the other details about sales & finances. The basics can be learned from the Internet.

My final tour was at a training command. My (unsolicited) job offers were: GS-11 training program manager at the Pearl Harbor shipyard, contract instructor at several military commands in the area (like the instructor training school), and contract instructor at the local business college. Because I’m a nuclear engineer with way too much time standing watch and keeping the lights burning, I also heard from the local electrical utility, the local trash-burning power-generating plant, and shipyard firms. I didn’t write a résumé or network with submariners. I’m an introvert who prefers to avoid socializing. Heck, I don’t even play golf. Other shipmates are at engineering firms. Another takes care of the shipyard’s Emergency Command Center. A couple are Troops to Teachers at local high schools. A few guys who used to do incredibly stupid things on liberty with me are now running the corporate world, but that’s another bunch of sea stories.

When my spouse left active duty for the Navy Reserve, she drilled at a local headquarters command. Whenever she did her two weeks of active duty (or a few weeks of relief watches) she’d get a job offer by Day Three. It’d be a civil-service job (running an office or helping update programs), or an active-duty mobilization, or a contract to help design & run military exercises. One offer was a full-time instructor contract to teach military watch teams how to use the command’s specialized computers and software.

Other career options

Civil service is just one choice. Almost everyone in the military learns about maintenance, testing, and quality assurance. My submarine & aviation shipmates get those types of civilian job at defense contractors and QA firms. Military retirees know about military exercises and tactics development. Every major command contracts a network of military retirees to work a few dozen days a year designing scenarios for training and exercise simulations. A military pension lets retirees be selective about the contracts.

An Early-Retirement.org poster has been getting calls from wingmen who retired before him. In addition to civil-service offers he teaches online classes at a local business college. Because he and his spouse are near a military base with a steady stream of tenants, they manage several rental properties. He’s financially independent so he doesn’t stress about the work or his performance. He just enjoys each day as it comes.

Another Early-Retirement.org poster retired from the Navy to finish his bachelors’ degree in sports management. He’s stitched together a career of refereeing community basketball & softball games, plus working on the golf course. He doesn’t need a lot of money and he’s doing what he loves. He’s also part of a huge job-search network because everybody knows him from their leisure activities.

At USAA’s blogger conference I met a retired Air Force officer who’s “just a pilot”. A wingman hired him for a distribution job at a national retailer and he’s now their flight operations manager– he says he gets paid to fly all over the country. He just wants to fly, but he does some management & paperwork on the side to make sure that the products are getting where they need to go.

If you’ve saved and invested during your military years and you’re close to financial independence, then you can use volunteer service to start a bridge career. Consider non-profits. After my spouse retired from the Reserves, a shipmate asked her to volunteer with a military family literacy group. She’d presents the program to military commands & family groups before the deployment, and give them the program materials. She’d run a display table at book fairs & milspouse conferences. A couple years later she was hired as a part-time regional volunteer coordinator, and then as a program manager. She has savings and a Reserve pension and she doesn’t need to earn a high income.

Consider military-friendly companies like USAA. At the blogger conference I met a submariner who’d left active duty after his service obligation. He’s spending the next two years working 4-6 months in departments dealing with various member-related operations and special programs. They’ll teach him what he needs to know. At the end of that time he’ll fill out a “dream sheet” and let USAA’s “assignment officer” give him “orders” to a “billet”. USAA actually sets a goal of hiring at least 25% of their new employees each year from the military. I still don’t know exactly what some their people do all day, but they learned their skills on the job and they’re happy. USAA hired them for their potential and their military experience, not because they had graduate degrees in the insurance business.

Self-employment

Consider blogging freelance writing. This blog reaches a potential audience of four million military & families. After 16 months it averages 300-500 hits per day (and rising!). Personal-finance bloggers write for an audience at least 10x larger. They start with nothing and spend two years writing for free to build up an audience of 1000-2000 hits/day. They learn tips & techniques from other PF bloggers. After a couple of years they have their audience and an advertising income stream of a few hundred bucks a month. They learn more techniques from other professional bloggers and marketing execs– ironically from reading their blogs and watching their videos. After a couple more years the income grows to $1K-$2K a month from affiliate marketing, 50-page e-book sales, website advertising, podcast/YouTube advertising, contracting for smartphone apps… it’s an endless list. Their success is based on their writing ability, sure, but a much more critical skill is perseverance. When you’re writing for free then it’s easy to give up. When you’re close to financial independence, though, you have the time to be an entrepreneur and grow the business.

Very little money is required to write, publish, and sell a book. Again it takes persistence and patience, which you have acquired in bulk from the military. One book won’t buy the groceries but the process gets you started on a writing & speaking career. One of my shipmates used her military training experience to write a leadership book that she’s built up into a six-figure public speaking and career-coaching business.

Three ways to start

If military retirees were already living in their ideal retirement locations then we’d be able to research these careers in person. Most of us have to do it remotely, or have someone else do it for us, or we spend a few months doing it after we retire there. Taking a few months to learn the area can be scary because you’re living off of “just” a pension & benefits.

“Remotely” means signing up for LinkedIn.com, filling out a profile, and joining their military groups. Read posts by other servicemembers & spouses in those groups who are networking their next career. Don’t be intimidated by the jargon– these people got through their own transition, made plenty of their own mistakes on active duty, and would love to tell you what they’ve learned. The “hard” part consists of learning the bridge career’s new culture & language, just like transferring to overseas duty. Despite the scary stories, note that people are swapping job offers and career advice.

“Someone else do it for you” means a headhunter. Their staff will help your spouse (and you, too) decide what you want to do by translating military skills & personal interests into civilian equivalents. Then they’ll teach your spouse how to wear a different uniform, handle a different set of protocols, network, do interviews, and get hired. The hardest part is getting the servicemembers to figure out what interests they’d like to pursue. Servicemembers are overwhelmed with “Who would hire me?!?” but the answer is “Everybody in your chosen field”. All veterans have to come up with is a list of “what I like to do” from self-assessment surveys and other career-transition tools. My favorite headhunter story is the shipmate who spent months trying to figure out what bridge career he enjoyed. He did so well at career networking and interviewing that… Lucas Group hired him to be a headhunter. Then he went on to help another dozen of my shipmates find their bridge careers.

If you choose to spend a few months doing it after you move to your retirement area then join local service groups like VFW, MOAA, Rotary Club, or Lions. Just enjoy socializing at the meetings. Volunteer for service projects. As people get to know you, the job offers will come. If you’ve saved enough cash to go a year without a paycheck then it will help you relax and make good decisions without financial pressure.

Impact Publications has an entire catalog of books and pocket guides that cover every aspect of the transition.

Let me know if you want introductions to other Early-Retirement.org posters who were a big help on the book. They’re at all stages of the journey to financial independence, and they can help you too.

It’s not just about your spouse. At USAA’s blogger conference I met a dozen military spouses who have carved out their own entrepreneurial careers (because they move so frequently). There’s a huge network out there for your “milspouse employment”.

I hope these stories help. I’m collecting more stories for the second edition. Please tell me yours!

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Filed Under: "What do you DO all day?!?", Military · Tagged With: active duty, bridge career, early retirement, financial independence, military, military retirement, Navy Reserve, PostAWeek, retirement

The transition to a bridge career

January 24, 2011 by Doug Nordman · 10 Comments

“The Military Guide” is full of advice and stories from dozens of servicemembers and veterans who hope that you’ll benefit from sharing their experience. I don’t tell their stories in the blog (you’ll have to read the book!) but I’ll post the stories that didn’t make the manuscript. As you read this next story, think about whether you’d like to see yours in the book’s second edition.

Here’s a comment on the “Fog of work” that grew into its own guest post from “Chief”:

That was a great read. I found myself shaking my head in agreement as I read through the article. If I could be so bold I would like to add a few of my thoughts on this topic– in particular the unique, almost surreal world in which members of the military find themselves submerged for the most part unawares.

Chief goes on to describe his retirement transition:

I joined the military in 1987 fresh out of high school with a whole lot of energy and very little direction. The Navy provided me the structure that I needed to “pull all of me in” and have a noble purpose for which I could bury my past and make a real difference. They provided me training, clothes, food, shelter, and a sense of community like I had never experienced before. I was a true believer and spent my every waking moment attempting to live up to the standards. I wanted to be the best “X” (whatever “X” happened to be) because the Navy told me that’s what leaders did: take charge and complete the mission.

At first those challenges were easy or mildly troublesome, but through the years with promotions came greater responsibilities. Real sacrifices (personal time, family) became factors. Remembering what I had been taught, I doubled down and work twice as hard, longer hours, and ultimately achieved the mission. Accommodations, medals, kudos, wall plaques.

This scene played out many times during my 20-year career. It reached a point for me personally, around year 15, where the “payoff” was not exceeding the “pain”. I found myself in a diminishing returns cycle professionally, personally, mentally and emotionally. The harder I tried to double down like before, the more unhappy and disgruntled I became.

I retired in 2007 for some of those reasons. I was burned out and tired. Unfortunately I realized that the hours upon hours of work away from family did not have a payoff, especially in the civilian sector. I was no longer “The Chief”, I was a newbie. It was boot camp all over again, only this time no one was telling what I should do or not do. I was totally unprepared for civilian life. I went through about a year of just trying to figure these strange creatures called civilians – their work ethic, social norms, ideas and attitudes about leadership. How are you supposed to land a job that doesn’t involve french fries? What about my leadership training? What about my work ethic ? My college degree? I received blank looks all around. They didn’t get me and I certainly didn’t get them. I realized the military wasn’t my job: it was my lifestyle. And I’m trying to sell ice to Eskimos.

So, I set about trying to understand my new place and work harder at developing relationships with the people I am surrounded with. Three years out and I can still only give my self a B- but I’m working on it.

I found that [the "Fog of work" post] struck a chord in me and brought me back to a time of some very scary moments. It was similar to the sensations I had during high-school graduation, my wedding, and the birth of my first child– that sense of foreboding and fear at the leap into the unknown. I discovered that all my “norms” were focused and centered around what the Navy considered normal. I found to my shock and horror that most civilians don’t share the same world view or perceptions and so I felt isolated.

Chiefs (historically and as a matter of record) are known for their over-inflated egos, sense of self-importance, and overall omnipotence. So, in keeping with long standing Naval tradition I felt obligated to document my part.

Chief went through the same transition-assistance seminars and had the use of the same self-assessment programs that we all used (or will someday use). He learned from the resources and paid attention to all the warnings but was still surprised by how much the military differs from “the civilian lifestyle”.

It might be tempting to sit around Monday-morning quarterbacking the transition, but I don’t think any of us would have done as well. (I know I wouldn’t have done that well– it’s why I never even tried in the first place.) However keen our hindsight may be, I don’t think anyone can truly anticipate the fundamental differences between the military and civilian life– or the unpleasant surprises that come from those cultural gaps. It has to be experienced to be understood. The best that a servicemember can do is to be aware of the situation and be ready to change their transition plan on the fly.

Are there any particular techniques to help ease the transition? Well, sure– we’ve all been exposed to the hundreds of books and websites that help translate the military lifestyle to its civilian advantages. (Impact Publications produces some of the best and has one of the most comprehensive catalogs in the business.) Here are a few additional suggestions that are discussed more thoroughly in “The Military Guide” and the pocket guide:

1. Strive to be financially independent before you leave the military. For some of us that means a 20-year career and an aggressive savings program. (Of course persevering for 20 years may be worth the effort (or not) and it depends on a number of more important quality-of-life factors.) For many servicemembers, financial independence means completing a career with the Reserve/National Guard through a combination of drills and mobilizations. For a very few highly motivated and disciplined individuals it means saving an extreme amount of money while living a very frugal lifestyle, and then deciding whether or not to stay with military past the first obligation. (Yes, it can be done in five years but it’s not easy– see EarlyRetirementExtreme.com for the details.) However you achieve that financial independence, and however long it takes, it gives you choices. You have fantastic flexibility in deciding how you want to handle your transition. There’s a huge pressure difference between “I have six months to live on before I need my next paycheck” and “I think I’ll just take a few years to explore my options”.

2. Keep doing your research and don’t leap on the first “opportunity”. Even a few months of savings can give you the flexibility to make sure you do it right the first time. One negative aspect of the military culture is its tendency to make you feel “worthless and weak” while barely capable of carrying out your duties at your current rank– let alone promotion. Don’t carry an inferiority complex into the civilian world. The reality is that every veteran has tremendous skills sought by every worthwhile employer, and that “first offer” is really just the first of several. Be courteous to prospective employers and treat each offer with the professionalism that it deserves, but don’t feel obligated to terminate the career search at the first “Yes!” Of course the more financial independence you have, the more choices you’ll be able to consider.

3. Include your “military lifestyle” standards in your job search. Maybe they’re a higher priority than a career that exactly matches your technical skills. Maybe they’re more important than your location or your salary or other opportunities. Your career-search criteria could include a military headhunter or military-friendly companies or businesses that have won Reserve/National Guard awards for supporting their employee’s military responsibilities.

4. Network, network, network. You already know this from all the transition programs, but treat it just like a new duty assignment. When you were offered a set of active-duty orders, you did a lot of shipmate research to find out if it was a good fit for you and your career. The same principals apply to a civilian career: find a culture that matches your lifestyle. Maybe you’ll even limit your search to the defense industry or electrical utilities or other employers who are known for their “wardrooms” and “Chief’s Quarters”. Seek out old wingmen and battle buddies who have been through the transition and ask them where the military culture fits into the business.

5. Pick a different type of career where you can still seek out mentors, gain knowledge, and help other people instead of just earning more money. Even if you’re not financially independent yet, you can leverage your military benefits to pick a field with other advantages. Work part-time while using your GI Bill (and its housing stipend) to improve your skills in a new interest. Ask your college if they need contract instructors for topics where you’re already an expert, or employees to help maintain their services & infrastructure. Look for temporary jobs or contracting opportunities at military bases near your chosen location. Consider working for a school, a volunteer organization, a non-profit, or federal/state civil service. (One retiree even joined the Peace Corps.) You won’t earn $175K/year with stock options or a company jet, but your stress level will be a lot lower. Veterans excel at training, counseling, and motivating– these sectors offer outstanding opportunities to do more of it and it may be the most satisfying work you’ve ever tackled.

6. Above all, treat the transition like a transfer to a command at a foreign culture. Overseas duty exposed you to experiences that most civilians will never see. Even if you just crossed a few state lines, you had to learn how to live with a totally different society and possibly even a new version of the English language. The military gives you lots of practice at handling big changes and teaches you how to handle all sorts of surprises. The “civilian culture” is just one more foreign experience where you’ll learn to acclimate. You’ll still have your same standards and lifestyle, but little by little you’ll learn the language, the rituals, and the subtle signals that are part of every culture. You don’t have to compromise or “give in”– just learn, appreciate, and enjoy the differences.

How did you handle your transition? What did you learn that wasn’t in the seminars, and what unpleasant surprises did you face?

The first edition of “The Military Guide” is being typeset this month, so now I’m collecting contributions for the second edition. Please post a comment or contact me if you have a story to share!

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Filed Under: Military · Tagged With: bridge career, early retirement, financial independence, military, military retirement, postaweek2011, self-assessment program, TAP, transition, transition assistance program

Retiring on multiple streams of income

December 15, 2010 by Doug Nordman · 23 Comments

This topic isn’t tied to “The Military Guide” chapter on the Reserve/National Guard, but those military retirees frequently confront a retirement consisting of multiple sources of income. Veterans who retire from active duty will go straight to a pension, but Reservists/NG have to find some other source of cash flow between the time they apply for “retired awaiting pay” and their 60^th birthday.

Here’s an example of a Reserve retiree who figures out how long to work and how to tap into the various sources of spending money. For simplicity (and stable links to the reference websites) we’ll base these numbers on the military’s 2009 pay tables.

CWO2 Jane, age 40, has just completed her 20^th “good year” of Reserve service.

She also has a civilian job, but she tentatively plans to retire from the Reserves at age 42. She’s going to continue working in her civilian career (for now) but she’s eager to retire from that, too– as soon as she can comfortably live off her assets and her pension(s).

She realizes that she’ll be able to completely retire somewhere between age 42 and age 65. Her confidence is boosted by knowing that at age 60 she’ll have the Reserve pension adjusted every year for inflation, plus very affordable Tricare. She currently has good health insurance through her civilian job, but she knows that Tricare Retired Reserve is also available (at a price) if she needs it.

Jane has spent many hours on her detailed retirement budget. It includes her living expenses and premiums for high-deductible catastrophic health insurance before age 60, as well as the replacement costs of vehicles and major appliances. She’s even added in a couple of fantasy vacations and a new roof. She’s estimated her property taxes and state/federal income taxes in her 15% bracket, although her military pension is free of state tax. She projects a basic budget of $35,000/year (including taxes) but she’d prefer to have at least $40,000/year to support travel and other entertainment.

She just received her official Reserve verification that she’s served 20 good years with a total of 3800 points. The maximum longevity pay at her rank is W-2>24 or $4935/month.

Her pension will be based on the military pay scale in effect at age 60, 18 years from her retirement date. Assuming that military pay keeps pace with the Employment Cost Index and the Consumer Price Index (admittedly a big leap of faith), in 2009 dollars she’ll get a pension (with a COLA) of 2.5% x (3800/360) x $4935 = $1302/month or $15,627/year.

Jane has no idea what future inflation will be but she knows that 20^th century inflation averaged about 3.5% per year.

She estimates that her Reserve pension’s COLA will be the same as the CPI. To be conservative, she’ll estimate that her spending will rise at the same rate as the CPI. (For the purposes of this example, it keeps the results in equivalent inflation-adjusted 2009 dollars. A retirement calculator or a spreadsheet will be able to handle different rates of COLAs and inflation.) She knows that if necessary she could always cut her spending to her basic budget.

In addition to her Reserve pension, Jane also has $250,000 in taxable accounts. Her conservative mix of stocks, bonds, and cash pays a long-term average of 5% per year, although that fluctuates. Since inflation is rising at 3.5% per year, she knows that her taxable account’s after-inflation “real” return is only 1.5% per year, and she still has to pay taxes on its gains when she withdraws the money. These taxes are part of her basic budget.

Jane’s civilian employer does not offer a defined-benefit pension plan– only her defined-contribution savings. She has $75,000 in tax-deferred accounts such as a 401(k), a 403(b), and the military’s Thrift Savings Plan. These accounts can generally be tapped without penalty after she turns 59½ years old, and she must begin required minimum distributions shortly after age 70. She can also make penalty-free withdrawals using the Internal Revenue Service’s rule 72(t) system of “substantially equal periodic payments”.

Because she doesn’t have to pay taxes on these accounts until she withdraws from them, she’s hoping to let them compound their tax-deferred earnings as long as possible. She’s invested these accounts in higher-return more volatile assets such as equity indexes in small-cap value and international stocks. She expects to receive a long-term result of 7% per year, or 3.5% per year after inflation (and before taxes).

Jane has another $100,000 in her Roth IRA. $50,000 of it comes from her 20 years of after-tax contributions. She can withdraw her contributions anytime without penalty, and she can withdraw the earnings without penalty after she turns 59½. Again she’s hoping to let her Roth IRA compound its tax-free earnings as long as possible because it’s also invested in volatile assets and will hypothetically reach a higher value.

Jane is entitled to Social Security as early as age 62. If she starts distributions before age 67, though, they’ll be permanently reduced by as much as 25%. She plans to delay SS to at least age 67 and, if possible, age 70. Based on her current earnings record and the Social Security online benefits estimator, at age 62 she’ll receive $1050/month ($12,600/year), at age 67 she’ll receive $1400/month ($16,800/year), and if she can wait until age 70 she’ll earn $1700/month ($20,400/year).

Jane begins by estimating her lifetime annual income if she retires at age 42:

Age	Income	Shortfall	Comments
42	$0	$40,000
60	$15,627	$24,373	Reserve pension only

At this point she’d need $40,000/year to maintain her ideal lifestyle. Although her $250K taxable account may continue to grow at 5%, $40K/year is an unsustainable withdrawal rate. If it continues to grow at a steady 5% per year then it might last seven or perhaps eight years. However a bear market could cut her to less than five years, even if she drastically reduces her spending.

If she depleted her taxable investments by age 48 then she’d turn to her Roth IRA and her tax-deferred accounts. Her Roth’s contributions would give her another year of penalty-free withdrawals to make up her shortfall, but then she’d have to start withdrawing the rest of the accounts (through a 72(t) SEPP plan). The tax-deferred accounts would have grown during the years that she was spending down her taxable assets and her Roth contributions, but she’ll almost certainly deplete her Roth IRA and her 401(k)/TSP before her Reserve pension begins. That’s not going to work.

She realizes that her retirement is in jeopardy between ages 42 and 60. But when her pension starts, will she have enough for the rest of her life? Conventional wisdom (from the Trinity Study) claims that she can begin withdrawing up to 4% annually of her remaining assets (and raise that amount every year for inflation) for 30 years.

Age	Income	Shortfall	Comments
60	$15,627	$24,373	Reserve pension only
62	$28,227	$11,773	Reserve pension + 25% reduction in SS.
67	$32,427	$7573	Reserve pension + full SS.
70	$36,027	$3973	Reserve pension + maximum SS.

A shortfall of $24,373 at age 60 requires a portfolio of $610,000 to support a 4% withdrawal rate ($24,373 divided by .04, or multiplied by 25). However by age 62 she only needs a $295K portfolio to support that shortfall on a 4% withdrawal rate, and by age 67 it’s under $200K.

At age 42 Jane will only have $425K in assets, but she can see that by age 62 she’ll have more than enough to retire even if she doesn’t save any more in her taxable or tax-deferred accounts. If she continues working (and saving) for the next 18 years then she’ll be able to retire no later than age 60, when her Reserve pension starts.

There’s a safe haven between the two extremes: (1) retiring from both the Reserves and her civilian job at age 42 and consuming her investment portfolio, or (2) working until age 60 and retiring on several streams of income.

The simplest option would be to:
- continue serving in the Reserves and her civilian career until her portfolio is big enough to bridge the gap. Even another five years of Reserve drills would add at least 375 points to her total and 10% to her pension.

Another option might be to:
- invest a portion of her portfolio in rental real estate to generate additional cash flow, although landlording involves additional risks.

A conservative option might be to:
- continue her full-time civilian career and Reserve drilling for another 5-10 years before retiring from one, and then consume her portfolio until her Reserve pension starts (with employment income and enough portfolio left to make up the shortfall).

A fourth option would be:
- working part-time, or on a series of temporary jobs, to allow her to semi-retire and enjoy some extended travel before age 60.

Jane can fine-tune her retirement date by running spreadsheets and retirement calculators. (See the Recommended Reading section for websites and other products.) The biggest factor under her control is maximizing the amount she saves in her tax-deferred and taxable accounts. Another factor is gradually reducing the equity risk of her taxable account when she gets ready to spend it– she doesn’t want to have to cash out in the middle of a bear market. Finally, staying healthy is a big incentive to reduce the cost of health insurance. She can’t do anything about her genes or catastrophes but she can maintain healthy habits and avoid “lifestyle” syndromes like tobacco or weight gain.

In this example, Jane could afford to retire in her mid-50s and perhaps even in her late 40s. Her situation is a simplified version of real life. Real-life planning becomes much more complicated when raising a family, paying a mortgage, and saving for a kid’s college education. It becomes even more difficult if a divorce, a stock-market meltdown, or prolonged unemployment derails the plan. The key to success is deciding what brings value to life– spending money or saving it for retirement. There’s a balance between the two, just as there’s a balance between a Reserve/National Guard career and a civilian career. We’ll revisit that work-life balance concept in a later post about saving for early retirement.

Related articles:

Military retirement spending: how much will I need?
Retirement finances: what will I spend?
Retirement budgeting

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Filed Under: Finances · Tagged With: 401(k), 72(t), bridge career, COLA, Consumer Price Index, cost of living adjustment, CPI, early retirement, good year, income, inflation, IRA, military pension, military retirement, multiple streams of income, National Guard, pay tables, Reserve, Roth IRA, SEPP, Social Security, Thrift Savings Plan, Tricare, TRICARE Retired Reserve

Where do you live after you leave the military?

December 13, 2010 by Doug Nordman · 3 Comments

I try to plan these posts a week or so in advance, and I’ve been following “The Military Guide” table of contents. (Of course there are detailed discussions and analyses in the book which are too long & complex for this blog– you’ll only be able to read those if you get the book!) Occasionally I’ll change the plan for a special reason, and today the reason comes from two very large military-oriented businesses.

Thanks to REWahoo of Early-Retirement.org for pointing out USAA’s and Military.com’s “2010 Best Places for Military Retirement“.

However the list seems to miss some of the nation’s top retirement areas for veterans (like Hawaii!). The oversight becomes clear when you dig into the details, and I’ve emphasized three areas in bold:

USAA worked with Military.com to develop this first-of-its-kind ranking that recognizes the best places in the nation for military men and women to reside after retiring from their first career with the armed forces and beginning their second career as a civilian. The rankings are a resource to help military retirees find locales offering a high quality of life while making the most of military retiree benefits.

USAA and Military.com … evaluated [areas] against Sperling’s BestPlaces general quality of life issues along with variables that correspond directly to military retirees.

The top five areas included:
* Military base proximity
* Military base amenities
* Veteran’s Affairs hospital proximity
* Military pension taxation
* Unemployment rate

Each of the identified variables was weighted based on importance to military retirees and each metro area was given a score based on its total points for each variable. The metro areas were ranked based on these scores. Metro areas where the median housing cost was 40% above the national median were excluded from the list.

In other words, Military.com and USAA assumed that every military retiree wants a bridge career. They chose areas based on the availability of veteran’s benefits, retiree-friendly taxes, and your employment opportunities. They considered 15 other factors, too, but these top five were deemed to be the most critical.

When you leave the military, do you want your job to be one of the most important factors in determining where you live? Or would you rather be able to rank the other factors first?

Don’t get me wrong– if you want a bridge career after leaving the military then that’s what you should do. However the assumption in this “best places” survey is that you have to get a job because you’re not financially independent. It’s assumed that you have to live close to your work because you need to commute there instead of telecommuting or working part time. Many wonderful areas of America (and the rest of the world) have been discarded from your consideration because of employment availability and housing costs.

If you’re leaving the military after just one obligation then you’re probably still on the road to financial independence. However you still have many other options available to you in the Reserves and National Guard, let alone civilian employment, and you may want to be closer to large military bases where you’ll be able to find more opportunities for drills and active duty. You Navy veterans in particular may have noticed that USAA’s “best places” list skips just about every major homeport, including Honolulu’s expensive real estate. Yet major commands and other military facilities in those areas are always seeking Reservists/NG, civil service, and contract employees. Better yet, there are places just outside the metropolis (even in Hawaii!) with competitive housing costs and many other lifestyle benefits. Your personal criteria may be much different from Military.com’s rankings. Use the “best places” rankings to jump-start your thinking and planning, but take them with a grain of salt and do your own research.

Military.com and USAA focus on bridge careers after military retirement because their research shows that’s what most of their customers are seeking. However you’ll have many more choices if you’ve been planning your financial independence, even if that plan involves part-time employment. It may seem easy to consult these “Best Places” lists, but make sure you analyze the reasons behind the rankings before you make your decision. If you’ve been pursuing financial independence for 5-10 years before your retirement then you’ll have far more choices than this list.

The next few posts will focus on achieving financial independence even without a military retirement. Chapter 6 of “The Military Guide” tells just two of the many stories of those who’ve left the service (well short of retirement) to pursue financial independence through bridge careers. It’s not a fantasy– once financial independence is your priority then it can be achieved in as little as five years. Most servicemembers and veterans (especially those with families) will take about 10 years, and a few will want more time. However if financial independence is your goal from your first military paycheck, then you’ll be well on your way when you leave the service.

You don’t have to get a job after the military just because USAA and Military.com think that’s what everyone needs. And you don’t have to choose your dream location just to get a job.

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Filed Under: Finances · Tagged With: Best places to live, bridge career, early retirement, financial independence, military retirement, Military.com, Sperling's Best Places, The Military Guide, USAA, veterans benefits

Six months before retirement…

November 11, 2010 by Doug Nordman · 2 Comments

Ideally by six months before retirement the big decisions have been made. The rest is “just” a matter of executing your plans and handling the surprises. Before you start into your checklist details, take a moment to review your progress.

By now you and your family have discussed the complicated issues. While there may not be perfectly harmonious agreement, you’ve probably made a decision to retire and another decision about a bridge career. You’ve reviewed your finances and talked through where you want to live. You’ve filed the request and made sure that it’s being processed. Your family, relatives, shipmates, coworkers, and friends are all aware that you’re retiring and everyone has dealt with their initial reactions. By now any family or command resistance should at least be grudging acceptance (if not cheerful cooperation) and everyone’s making appropriate plans.

Attending the Transition Assistance Programs (TAP) training

A year or two ago, when you first started thinking about retirement but before you filed your request, you would ideally have attended your service’s transition assistance planning. (The retirees are laughing heartily about this suggestion while secretly wishing they’d had this opportunity.) The reality is that it’s hard to schedule time away from the mission when you haven’t even made a retirement decision. You might be reluctant to tip your hand by going to TAP when you’re supposed to be a hard-charging leader, and most commands don’t really make time for your absence until you’ve already requested retirement. So we’ll start with a review of the contributions that TAP can make to your retirement checklist.

Whether you’re seeking a bridge career or planning to be a surfer bum, the Department of Defense wants to ensure that you understand your benefits and are aware of their timing. (No one wants to see veterans sleeping under highway overpasses or standing in line at the food bank.) You’re going to be stuck at TAP until the instructors are satisfied that you’ve been trained. The briefings may be fascinating but they could also end up covering topics that you already know, so bring plenty of material to keep yourself quietly entertained while you’re waiting for new information to come up. Even if you’re offered the opportunity to complete your review online instead of in person, it might be better to plant yourself in a conference room with fellow TAP attendees for a few days. This is one of the few times during the next six months where you’ll be left alone to focus on what needs to be done and when it needs to be finished. Make the most of your “me time”!

Or make the most of your “us time”– try to coordinate your schedules and attend TAP with your spouse. Even if you two have already made the important decisions, one of you is sure to notice a detail that’s been overlooked. You’d much rather have your spouse at TAP to talk about the briefs than to try to go over it later from your notes, and you’ll both feel more comfortable going through the process together. If your spouse isn’t completely on board then TAP will go a long way toward settling your differences.

TAP is a wonderful wake-up call. It’s required for all separating/retiring veterans, so you can’t go home without it. Your chain of command has to leave you alone for a few days and you have to leave your IN box back at your office. (Put away that smartphone, too!) Your spouse can attend with you, so two pairs of eyes and ears can help make sure you don’t miss anything. Your fellow TAP attendees will also share their stories and the counselors will be able to help you research the answers to your specific questions, so it’s a much better resource than randomly browsing military websites.

While you’re at TAP, be alert for any mention of tasks that need to be completed before you’re formally retired. You’ll have your command checklist but you’ll have to modify it for your situation and your schedule. As inconvenient or even painful as some checklist items may appear to be on your last day at the command, they’ll be extraordinarily more difficult after you’re a retiree. Some retiree updates and corrections may take months to be processed if you’re no longer on active duty. Others just can’t be done, even if you’re willing to pay the expenses.

At an absolute minimum, spend your free TAP moments reviewing your service record and medical/dental records. Make sure that all of your reports or evaluations are present and that the dates cover all of your service. Verify that your medical/dental records contain every health concern that you may be taking into retirement, and make a list of questions to discuss during your exams. If your issues aren’t addressed before you retire then you may have to start all over again with the Veteran’s Administration. Military retirees will quickly tell you that this is no way to start a retirement.

Self-assessment software & worksheets

If you haven’t made a decision about a bridge career, TAP is a good place to research the question. The curriculum and the training aids are all designed to help you identify a field and find a job that meets your criteria. The instructors will be very familiar with the self-assessment tools and they’ll also be able to discuss a job search. Just talking about the process may convince you that it’s not as difficult as it seems– or you may decide that employment is definitely not in your future.

Once you’ve squared away your records, take the time to explore the self-assessment programs and documents. Even if you’re convinced that you’ll never work again, you may be surprised by the wealth of knowledge you’ll gain from the personality & temperament surveys. The interest questionnaires can also help you decide how you feel about perpetual travel, moving to a new area, volunteer work, and new hobbies. Talk to the staff about your concerns and tailor the resources to your needs. This may be the last time for months that you can reflect in quiet exploration and contemplation.

If you’re attending TAP with your spouse, try to take the assessments and surveys together. The results may surprise you– in a good way! Even if the TAP schedule doesn’t have the time, you may want to revisit these tools to help make sure that you’re both in synch with your retirement plans.

What TAP can’t do for you

Human beings tend to resist change, and leaving the military is perhaps the biggest life change since we entered the military. The most important benefit of the transition programs is to prod you to take charge. You can determine whether your finances will support your new life. You can be responsible for your own entertainment. You can start a bridge career if you want to or you can take some time off. Sitting in that transition classroom will make you realize that you have to make the transition for yourself instead of letting your chain of command take care of you for the rest of your life.

Unfortunately the transition programs can’t do the work for you. You may be handed a notebook with a generic checklist, but you’ll have to add the details that apply to your specific situation. You may learn about medical and vocational assistance, but you have to research your records and make the appointments. And while they may be able to help you figure out how big your pension will be, you have to determine if that’s enough to make you financially independent.

Filed Under: Military · Tagged With: bridge career, early retirement, financial independence, military retirement, retirement, TAP, transition assistance

When should you stop working?

October 11, 2010 by Doug Nordman · 11 Comments

What’s your future? After active duty will you retire from the military to a “bridge career”, will you semi-retire to work part-time, or will you retire early and never earn a paycheck again?

These questions are tough retirement issues. Like all tough questions, the answer is “It depends”. It’s not an easy answer, but it’s the only one that will help you decide what’s best for you. While you’re pursuing it, give yourself the option to change your plan. You have time. The skills that employers truly care about (your leadership, your experience, and your ethics) won’t go stale. Talk with your family and think about your goals. Don’t lock yourself in!

Your top priority is your family’s financial independence. If you haven’t achieved that by the time you’ve left the service then you’ll need to keep working. Your next priority is the happiness of you and your family. They may want you around more often and your idea of happiness (and supporting them) may be quite different from theirs. A career change is a great time to discuss all the options and expectations.

Your feelings/emotions about your career changes will make a big difference in your performance and your health. They’re also much more difficult to handle than the mechanics of a transition. On active duty you’re surrounded by mentors and peers who can tell you precisely where you need to go and exactly how to get there, but it’s not that easy when your retirement time approaches. The best career wisdom I’ve ever heard is: “Do it as long as you’re having fun”. Your peak performance comes from being challenged, fulfilled, and happy. That leads to faster promotions and even better jobs.

On the other hand we’ve all met the miserable people who tried to do tours that they weren’t suited for (despite their best intentions), or those equally miserable folks who stayed too long. Take it one tour at a time and stop when you can’t find anything more that you’d enjoy doing. Leaving the military may be hard and it’s harder to contemplate a few months without a paycheck. However the hardest task of all is the soul-destroying experience of enduring a tour that has no appeal or fulfillment.

Even outside the military, it’s tough to keep your financial & family priorities if you’re not having fun. You have to pay attention to your own feelings as you go through your military retirement transition. You’ll only succeed at your goals if they make you feel curious, happy, and maybe even excited about chasing them. If you’re grimly clenching your jaw and preparing to gut it out for another five years then you may not be making the right choice. You may even be risking your mental, emotional, and physical health.

Watch out for another unhappy situation: burnout. It’s extremely difficult to make good choices when you’re exhausted, frustrated, and miserable. If you feel that retiring is the only way to get out of a terrible job then you may need to reconsider where you’re going. Many people pursue a fantasy retirement because they can’t imagine putting up with work any longer. When they retire, though, they may find that they haven’t developed a lifestyle (or the savings!) to enjoy their new free time. If you have the chance to catch up on sleep, clear your head, and think about all the issues then you may decide that what you really need is a different assignment or a career change. Don’t keep working because you can’t imagine what else you could do with yourself, but don’t retire just because you’re positive that work can’t get any worse. You have to move toward a goal, not just run away from bad situations.

I’ve heard from many unhappy people in the military, so let me emphasize the illusion of a fantasy retirement. When you’re chronically overworked, overstressed, and suffering low morale then making a retirement decision is an overwhelming impossibility. You can’t make good decisions during burnout. Instead of risking your finances and your lifestyle, find a way to get some time off. It’s hard to get two straight weeks of leave to contemplate your future, especially if you’re transferring between duty stations, but you have to find the time. Don’t use that precious leave to clean the house, finish the yardwork, or take the big family vacation. You’re going to focus your efforts (and your family’s discussion) on getting ready for retirement with maybe a bridge career. Catch up on your sleep, spend a couple days winding down, and let the fog clear from your thinking. By the end of the first week, you should be ready to start talking about the issues and considering your decision.

Filed Under: "What do you DO all day?!?" · Tagged With: bridge career, early retirement, military, military retirement, stop working

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