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A written plan that dates every irreversible deadline and stress-tests the budget for a bad year is what military retirement planning at First Command Financial Services gives service members about to retire. The work runs about 12 weeks from the first conversation to the finished written plan. It is timed so the 90-day TRICARE retiree enrollment window and the 120-day end of SGLI coverage are both handled inside it.
Start military retirement planning 12 to 24 months before your retirement date. By then your High-3 estimate is firm enough to plan on, and the second-career offer usually exists. For a master sergeant like Terrence (hypothetical, age 42), 2.5% x 20 years is 50% of his High-3 average.
Sort your decisions into two piles first. Some are hard to undo: the Survivor Benefit Plan election made before the last day (generally permanent, apart from a narrow window in months 25 to 36 after retired pay starts), TRICARE retiree enrollment within 90 days, and VGLI without health questions within 240 days of separation. Others are easy to change later: your TSP fund mix, the monthly budget and IRA beneficiaries.
Rules can change. Tax law and benefit formulas move, so the written plan counts retired pay as reliable income and rechecks the tax assumptions every year. The SBP election and a TSP rollover are each covered in more depth in separate articles on this site.
A hypothetical household shows how this goes wrong. Terrence and Ivy, 42 and 40, have 2 kids under 12 and about $520,000 in the TSP. Terrence retires from the Marine Corps after 20 years under High-3 and starts as a county 911 dispatch supervisor. Ivy teaches second grade. His retired pay nets about $2,700 each month, for illustration.
Picture two versions of them with one difference: how much of that $2,700 they commit to new fixed bills in month 1. Version A adds a $2,700 mortgage payment. Version B adds $1,200 and banks the other $1,500 each month.
In month 25 the dispatch salary, about $4,500 net each month, stops for 6 months. That's a gap of 6 x $4,500 = $27,000. Version B has saved 24 x $1,500 = $36,000 and covers it. Version A has nothing saved, so it withdraws $27,000 from the TSP at age 44. The 10% early withdrawal penalty alone is $2,700, before income tax, and the sale happens in whatever market that month brings.
Look at what disappears at separation: BAH, SGLI and payroll TSP deposits. Terrence's untaxed housing allowance is gone in the first month, while the mortgage Version A signed keeps coming due.
Locking the whole net pension into a new mortgage in the first month, before the dispatch job's probation ended, is what forced Version A's withdrawal. The fix is to sign the bigger loan only after 2 years of banked surplus. Here's a quick test: until the new civilian job has cleared its probation period, commit no more than half of net retired pay to new fixed bills. Version B committed $1,200 of $2,700, about 44%, and rode out the job loss without touching the TSP.
Before First Command Financial Services signs off on a new mortgage or car loan in the written plan, it tests the budget against a 6-month job loss. A forced TSP sale in a down market is the loss that can't be undone. Invested TSP balances can fall, and money withdrawn in a slump may come back as less than was put in.
| Item | Active duty (last month) | Retired (first year) |
|---|---|---|
| Pay from service | Base pay plus allowances | About $3,200 gross retired pay |
| Housing allowance | BAH, not taxed | Ends at separation |
| Health coverage | TRICARE, no enrollment fee | Retiree enrollment within 90 days |
| Life insurance | SGLI in force | SGLI ends after 120 days |
| TSP | Payroll deposits, no match (High-3) | No new deposits; $520,000 balance |
| Survivor income | SGLI death benefit | SBP, 6.5% of base amount |
In weeks 1 and 2 we talk with you over video or a phone call, then send a document request: retirement orders, final LES, TSP statement, the SBP election form, Ivy's teacher pension statement and the dispatch job offer letter. In weeks 3 to 6 we build a deadline inventory and a cash-flow sheet that combines retired pay, the dispatch salary and Ivy's pay. TRICARE enrollment and the SGLI-to-VGLI step get calendar dates first.
In weeks 7 to 10, First Command Financial Services drafts the written plan and runs 3 stress tests: a 6-month job loss, a 20% market drop, and a health event that stops Ivy's pay. In weeks 11 and 12, we deliver the written plan and talk it through. Account changes happen only after the household has read it.
By the end of week 12 you hold a short stack of documents, each with a job to do: the dated deadline calendar, the cash-flow sheet and the results of the 3 stress tests. The calendar goes on the fridge, because the 90-day TRICARE window and the 120-day SGLI end don't wait for anyone.
The written plan gets a full review each year, and certain changes call for an earlier one. Those are a civilian job offer or loss, a VA disability rating change, a new baby or a child starting college savings, a tax law change that touches retired pay, or a 20% stock drop. After a drop, the review rechecks the spending rule. It doesn't reopen the stock allocation.
Waiting gets costly fast when several things stack up. A retirement date less than 12 months out means the SBP form is signed before the last day. A second-career offer with a probation period raises the cost of a bad month. Two kids under 12 put college about 6 to 10 years away, and a spouse's own pension needs to be counted. Waiting past the last day turns 3 choosable deadlines into missed ones.
Yes, a job change is one of the events that triggers an earlier review. We rerun the cash-flow sheet and the 6-month job loss test with the new pay. The deadline calendar stays the same, since those dates come from your retirement, not your employer.
The Transition Assistance Program explains your benefits in general. It doesn't build your numbers. Military retirement planning at First Command Financial Services puts your retired pay, TSP, spouse's pension and new salary into one cash-flow sheet, dates your deadlines and stress-tests the budget for a bad year.
No. Start 12 to 24 months before retirement, because the SBP form is due before your last day and TRICARE gives you 90 days. The probation period is a reason to plan, since the quick test caps new fixed bills at half of net retired pay until it ends.
You can lose the ability to enroll when you want, and gaps in coverage can mean paying medical bills yourself. Check the current TRICARE rules for exceptions. This is why the deadline calendar gives the enrollment date first priority in weeks 3 to 6.
Yes. First Command Financial Services asks for $500,000 in investable assets, and $520,000 clears that. The $500,000 minimum applies to investable assets, so check your total. Use the request form and we'll confirm before the first conversation.
The first conversation is held by video or telephone with both spouses. We cover the retirement date, the job offer and the TSP balance. No account changes are discussed until the documents arrive.
You leave with a list of your own deadlines with dates, the document request list, and an explanation of the written agreement, so you know the exact cost before work starts.
First Command Financial Services asks for $500,000 in investable assets, and Terrence and Ivy's roughly $520,000 TSP meets it. To begin, send your retirement date and TSP balance through the request form.
One limit to know. This service doesn't file VA disability claims or choose a civilian job (an accredited veterans service organization handles claims). A household more than 2 years from its retirement date, with no job offer and no TSP decision pending, may get more from a short checkup now and full planning later.
This article is general financial information only, not investment advice tailored to your circumstances. Investing involves risk, including loss of principal. Before making any financial decision, consult a qualified professional about your specific situation.