So your spouse is getting out of the military. This can afford you many different opportunities. The military can be a great stepping stone to give your spouse the training or benefits they need to get started in a field or to build discipline for a career. Sometimes, people come in and find the military is not a good fit for them, and that’s okay, because it’s not for everyone. It’s always best to know what benefits your family can receive, and you should have a plan for civilian life. This article will look at your benefits, it will discuss some of the things you might want to plan for. Remember, you have resources at your base to help you through the process, so make sure you ask questions.
Save as Much as You Can
Have an emergency fund, because life is certain to be uncertain. This is usually kept in some kind of savings account or money market savings account. There is no guarantee you or your spouse will have a job or enough income to cover your expenses after they get out. Note that you are also moving during this time which the government mostly covers, but not completely. I’m sure you’ve heard that you need to save 3 to 6 months of your monthly expenses, however, with things in limbo you should probably shoot for the 6-month mark. How much you need to save is a very personalized subject and really depends on you and your needs. 6 months of expenses may not be realistic if your family has debt, such as credit cards or car loans. Try to pay off as much debt as possible. This will allow you to be able to adjust more easily if your family’s income goes down.
Thrift Savings Plan
Your family will need to decide what they would like to do with your spouse’s Thrift Savings Plan (TSP) account. It is a retirement account offered by the military. There are a few options on what they can do with this account depending on many factors which, I will be explaining them in detail below.
High-3 Retirement–This means that your spouse was on the old retirement system, and they can have it transferred to a commercial retirement account, or keep it in TSP. A TSP does have low expense fees, but if your spouse isn’t looking to get a Government Service (GS) position they cannot put any more money into it towards retirement. Make sure they pay back any loans they took out of their TSP before they separate.
Blended retirement– All of the same rules above apply to this, only your spouse will be able to take their DOD contributions on top of what is in their TSP. Here’s how it works: if they did not contribute to TSP, there will be 1% of whatever their base pay was during that time. They get a service matching contribution depending on the amount they put into their TSP monthly up to 5%. I will write an article on Blended Retirement System (BRS) in the near future as it is probably one of my favorite topics. Anyways, the bottom line is that there will be some money in TSP that is from the government.
If your spouse is looking to go into the GS system, they should probably consider keeping the money in their TSP since they would still be able to contribute. It would work similarly to how the BRS system works as far as the matching.
If your spouse is unsure or does not want a government job, they may consider moving it to a commercial retirement account so they can still make contributions. If they do this they will not be penalized for taking the money out as they are still using it towards retirement. If they use some of that money to take a cruise, they could be penalized a percentage of the money on top of tax penalties, because that money is intended for when you’re older.
Service Members’ Group Life Insurance (SGLI) is the life insurance that is offered to active duty military but is taken away once your spouse separates. You can get a Veteran’s Group Life Insurance (VGLI), but the monthly premium goes up a lot as you get older. Commercial life insurance may be something you want to consider as you probably count on your spouse’s income to pay bills and shop. Again, this varies family to family, so you’ll have to look at your family’s specific situation.
Health Care Insurance
Tricare is a huge benefit that your family receives while your spouse is active duty. This basically allows you to get medical care and not have to worry about paying for it! My husband had a luxurious 3 day stay in the hospital that could have cost us $17,000. To avoid high-cost medical bills as civilians, make sure to look for health care insurance if it is not provided by one of your jobs.
VA Home Loan
Another benefit available to your family is the Veteran’s Assistance (VA) Loan. This allows you to take out a mortgage on a home. These usually have lower interest rates and more benefits than other types of mortgages. I suggest you compare all of your available options to see which will work best for you and your family. When we did ours, I made sure to look at least 3 different companies and asked them to compare different products for us. Also, note that mortgage companies look at how many credit inquiries have been made on you which can affect your monthly payment and terms. Basically, try not to get a car loan and a mortgage around the same time.
Ensure your spouse files for disability. There is no guarantee when they will get it, but it is worth going through the paperwork and the exam to see if they can receive this benefit. Depending on the rating, it can help your spouse gain employment with the government as well.
Your spouse should be eligible for the Montgomery GI Bill. This allows them to go to college or accredited training for 36 months. This averages out to a 4-year bachelor’s degree. If they are on the Post 9/11 program (Yellow Ribbon) your family will get a (Basic Allowance for Housing) BAH as well. On top of this, your spouse can apply for Free Application for Federal Student Aid (FAFSA). Make sure you have a copy of your tax return for that year. You can also look at the numerous scholarships that are offered to military veterans. The worst-case scenario would be that you, your spouse, or both of you, will have to work to provide income, however, this option allows your family to avoid student loans (which can take forever to pay off).
It is important to look at the training that you and your spouse will need for the jobs you are looking to get before your spouse leaves the military. This allows your family to be ready for employment in your preferred field. Much of this training and education can be done via the College Level Examination Program (CLEP). College classes should be taken while your spouse is still on active duty, and military courses such as tech school can be counted as college credit. Note that there are several programs you and your spouse can take advantage of to pay for those classes while they are still in, which I will discuss in a later post. Sometimes, however, certain degree programs are on campus, and they require you to stay in that location for 2-4 years to finish the program (yes, yes, I know that is a long time in one place). In this case, you may have to wait until your family stops moving and your spouse retires.
You will probably want to have a job waiting for you before your spouse separates. Make sure your resumes are up to par to give you the best opportunity to get that job. There are usually classes at Family Centers to improve your resume. Depending on what type of job you are looking for, your resume should look a certain way. If you are applying to a civilian or Non-Appropriated Funds (NAF) job, your typical resume setup will work. However, if either of you are looking to apply for a Government Service (GS) position, your resume will look completely different. My base’s Airman and Family Readiness Center (AFRC) has a class for writing a resume for government jobs, but it’s actually a two-part class because the GS job application system is so different. There are also other organizations like Transitioning Military Veteran that helps veterans find work. They have a network of companies they work with to help your spouse find employment.
Speaking of networking…network with people to find out about job openings and get references. You could even ask them to write you a letter of recommendation. You can also be on the lookout for job/career fairs. Dress to impress, and bring an updated, flawless resume. Linkedin is also a great way to network to the area you are going to, and to see what jobs are available. Currently, spouses can get the premium edition for free. Speaking of social media, make sure your profiles look professional. This means taking down those photos of you when you were drunk, and when you were complaining about your boss (even if it was rightfully so!). There is no guarantee that you can forever delete them, however, so always be careful with what you post on social media.
Most states will allow your spouse to file for unemployment after their service is done. Check with your state to see if this applies to your situation.
Free Linkedin Premium https://linkedinforgood.linkedin.com/programs/veterans/milspouses
Veterans Affairs Website https://www.benefits.va.gov
Top Money Worries When Separating from the Military Blog Post from “Nothing But Room” http://nothingbutroomblog.com/2015/04/top-money-worries-when-separating-from-the-military.html