Military retirement lessons learned
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. As noted in HalfTheMoney’s 27 May 2013 comment below, the finance command will now buy back a half-day of leave. It’s about time!
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.
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.
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.
(Click here to return to the top of the post.)
When should you stop working?
Where do you live after you leave the military?
Exit interviews, last-minute questions, and the retirement ceremony
The transition to a bridge career
Retirement: don’t recreate your old environment
During retirement: You will change. Your plans may change too.
During retirement: where do you want to go next?
40 miles for Tricare Prime — or maybe Tricare Standard
Does this post help?