Start Preparing To Separate NOW

Everyone will leave the military eventually, and you can make that transition easier by planning ahead.

Someday, you’ll leave the military.   Whether you do one term or stay until retirement, the time to start thinking about leaving the service is when you enter the military.  While veterans report issues with many different aspects of separation, I’m primarily concerned about financial and employment challenges.  There are many things you can do while you are serving to make the transition easier, and it is never too early to start.

The 2014 jobless rate for all veterans was 5.2%, with Post 9/11 Veterans reporting significant challenges in finding meaningful employment.  36% of Post 9/11 veterans report that it was “very” or “somewhat” difficult to find work.   Anecdotal evidence suggests that many recently separated veterans take 6 to 12 months to find a job, regardless of their age, experience, or education.

Obviously, everyone hopes to be one of the lucky folks who walk out of the military and into a secure job that will support their family.  Unfortunately, that isn’t the case for many people.  Planning and preparation can help make the process easier.


There are two sides to organizing your finances:  savings, and eliminating spending.  They’re both important.

Knowing that it often takes up to a year to find a good job, it only makes sense to have 12 months of income saved in a transition account.  The earlier you start this saving, the easier it will be.  For example, if you’ve just enlisted and only plan to serve for four years, you want to save three month’s income every year of your service.   If you’ve got 10 years left until you plan to retire, you’d only have to put aside a little over one month’s income every year.

I can not emphasize enough how important it is to have a dedicated savings account to use when you leave the military.  Every day, I hear from former military members who have moved in with family, spent through their savings account, and are struggling to pay their bills while they continue to search for a new position.

This brings me to the other side of the situation:  your bills.  Make every possible effort to pay off everything that you can pay off before leaving the service.  Knock out those pesky credit card balances, and deliberately avoid accruing debt in the years prior to separating.  If you’re a car loan type of person, don’t buy a new car before leaving the military.  (Heck, I’d say to postpone a new car purchase even if you have the cash.  You might need the savings, and you can still buy a new car after you get a job.)  Ditto for any other big purchases:  if it isn’t essential, the months and  years leading up to separation are not the right time to be buying anything.

If you expect to remain on active duty long enough to earn retirement pay, you might consider whether you want to organize your finances so that you don’t have to work after retirement.  While it isn’t common, savings and frugality allow plenty of military retirees to skip the second career and move directly to the ranks of the permanently retired.

Education and Experience

As part of your overall plan, be aware of and use the many educational benefits available to currently serving service members and veterans.  Regardless of what you expect or desire to do after separation, there is always some sort of educational program that could be useful.

While you’re still on active duty, take advantage of tuition assistance to work on desired educational goals.   Investigate whether you can get certifications through your active duty job, either from your branch directly, or through programs such as the Department of Defense sponsored Onward to Opportunity program.

Learn about the educational opportunities that are available to veterans.  In addition to the GI Bill, you can gain certifications through public-private partnerships such as the Institute for Veterans and Military Families (IVMF) Veteran’s Career Transition Program.   The Department of Veterans Affairs (VA) also offers retraining programs for certain veterans with disabilities.

Diversify Your Income

As you head towards separation, consider ways in which you can diversify your family’s income.  You’ve probably heard the phrase, “Don’t put all your eggs in one basket.”  This is absolutely true about post-military income.  While it may be your family’s desire to have a sole breadwinner in the long-term, it makes sense to be more flexible in the short-term.  A non-working spouse could brush off the resume and return to the workforce, your family could open a small business, or you could pursue some “side-hustle” type work that can take the stress off the bank account during the transition.

It always make me a little sad when I hear about military families who are surprised by the financial challenges when they leave the military.  I guess I am more aware of these challenges because this subject interest me and because I hear about these situations frequently.  With a little forethought and some action, you can put your family in the best possible position to be financially ready for the transition out of military service.

About the Author

Kate Horrell
Kate Horrell is a military financial coach, mom of four teens, and Navy spouse. She has a background in taxes and mortgage banking, and a trove of experience helping other military families with their money. Follow her on twitter @realKateHorrell.