INSIGHT: 3 Ways to Ease Your Shift From Military Service to Civilian Life

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After faithfully serving your country, it’s time to start the next chapter of your life. Maintaining your financial security is likely a major goal. USAA uses the Financial Readiness Score (FRS) as a measure of preparedness for financial ups and downs.


Let’s consider a 29-year-old military member with an FRS of 80 on a scale from 1 to 100. After leaving the military, his FRS drops to 60, indicating a decrease in financial security. What changed? He lost health insurance and life insurance when he separated from the military.


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Here are some steps you can take to maintain your financial security while leaving the military.


  1. Maintain health insurance during the transition to civilian life. If you will not transition immediately to an employer-sponsored health care plan, you will need to find new health insurance to avoid gaps in coverage. Unplanned out-of-pocket health care expenses can quickly consume your savings. Consider these options:
    • TRICARE Continued Health Care Benefit Program
    • Veterans Health Administration
    • Individual major medical insurance 
  2. Replace Servicemembers Group Life Insurance (SGLI). Life insurance is vital to your family’s well-being. Consider these options and compare the long-term costs of each to determine which option is best for your situation.
    • Private life insurance policy
    • Veterans’ Group Life Insurance (VGLI): VGLI is a good option for military members who exit the military with health factors that make private life insurance extremely expensive or unavailable. However, this is potentially a more expensive option over the long term since rates increase every five years. Important note: You have 240 days after you leave the military to sign up for VGLI without a medical exam.
  3. Account for lost income. Even if your civilian salary matches your military salary, you will experience a decrease in take-home pay. Due to the tax efficiencies of military pay, once you begin paying for health and dental insurance, $50K in the civilian world does not go as far as $50K in the military. Here are some options to consider. 
    • Reduce expenses. One of the tenets of financial security is living within your means. Adjust your budget to ensure you are spending less than you earn.  
    • Replace lost income. Can you take a second job or can your spouse work?

I encourage each of you to plan ahead for what you know is coming. For a better idea of where you stand today, USAA members can complete the Financial Readiness Score assessment. You’ll receive a personalized action plan and financial tools to help you improve and maintain your financial readiness.



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This material is for informational purposes and is not investment advice, an indicator of future performance, a solicitation, an offer to buy or sell, or a recommendation for any specific product. A Financial Readiness Score should not be used as the primary basis for making investment or financial decisions. A Financial Readiness Score provides a basic assessment that is based on information and assumptions provided by you regarding your goals, expectations and financial situation, but it does not guarantee financial success or replace more detailed financial planning. The calculations do not infer that USAA assumes any fiduciary duties. Consider your own financial circumstances and goals carefully before investing or purchasing financial products. Before making any decision, consult your own tax, financial or legal advisors regarding your situation. Information provided by you in connection with the Financial Readiness Score tool is voluntary, will not be considered in connection with a request or application for credit or insurance products/services, and may be used by USAA for marketing and other business purposes as set forth in the USAA Privacy Promise.


Certified Financial Planner Board of Standards, Inc. owns the certification marks CFP® and CERTIFIED FINANCIAL PLANNER™ in the United States, which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.



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