Transition Playbook for Military Retirees

You did 20. What's different at retirement?

A 20-year retirement isn't just a DD214 and a party—it's the point where multiple systems start paying you at once. At retirement you're often looking at:

• Retired pay (High-3 or BRS) for life, with COLAs.
• VA disability compensation (often tax-free), potentially at 50-100% or higher with SMC.
• CRDP or CRSC restoring some or all of the VA offset.
• SBP to protect your spouse's lifetime cash flow if you die first.
• Lifelong TRICARE (and later TRICARE For Life with Medicare).
• FEDVIP dental/vision, commissary/exchange/MWR, and potential Space-A travel.

The win isn't just “having benefits”—it's coordinating them so your retired pay, VA money, health care, and survivor protections all pull in the same direction.

12-month countdown to retirement

The last year in uniform is when you lock in most of your “one-time” choices: SBP, transition programs, and pre-discharge VA claims.

TAP, SkillBridge & pre-discharge VA claims

The last year in uniform is your best chance to use programs that disappear on Day 1 as a retiree. Use them to build your post-military income, not just to collect checkmarks.

Transition Assistance Program (TAP)

• Initial counseling and the pre-separation briefing are required roughly a year out, but starting 18-24 months gives you time to re-tool your resume and networking.
• Optional tracks cover higher education, vocational trades, entrepreneurship, and technical careers—pick the ones that match where you're actually going.
• Spouses are usually allowed and encouraged to attend; ask your TAP office how to get them on the roster.

SkillBridge (DoD internship/apprenticeship)

• Lets you spend up to 180 days in a full-time internship, apprenticeship, or training program while DoD keeps paying your base pay and benefits.
• Requires a DoD-approved provider, a signed training plan, and command approval. The goal is either a job offer or a strong network, not just a “cool six-month break.”
• Start scouting providers 6-9 months before your desired start date; review MOUs and expectations with your education/transition office.

Benefits Delivery at Discharge (BDD)

• For active-duty members who can file a VA claim 180-90 days before a known separation/retirement date.
• You file via VA.gov using the pre-discharge/BDD option, upload your records, and stay in the area for exams until you're out.
• If you're outside the BDD window or don't qualify, file a standard claim as early as you can instead of waiting until months after retirement.

First-year support from VA

• VA Solid Start calls you multiple times during the first year out—save the number and actually answer; they can connect you to health, education, and compensation resources.
• Create your VA.gov and My HealtheVet accounts early so decision letters and benefit summaries are available as soon as they post.
• Link up with a VSO (DAV, VFW, American Legion, state/county VSO) before you retire so someone knows your file when it's time for appeals, increases, or survivor claims.

Spouses & kids: benefits on their own timelines

Your spouse and children don't just "tag along" with your retirement. Some of their benefits must be set up while you're still in; others kick in only if you later become P&T or pass away.

How to “double” and “triple” dip—legally

When you retire, you can often combine retired pay, VA disability, and either CRDP or CRSC. Add a civilian paycheck and Social Security later and you're effectively running multiple income streams at once.

Common stacks

• Double dip: Retired pay + VA compensation, with CRDP restoring some or all of the VA waiver if you're eligible.
• Triple dip: Retired pay + VA + CRDP/CRSC plus a civilian job or future Social Security.
• Guard/Reserve twist: Reserve Component retirees may have different timing for when CRDP becomes payable (e.g., when retired pay actually starts).

TRICARE, TRICARE For Life, FEDVIP & HSAs

Under 65: TRICARE & FEDVIP

• Choose between TRICARE Prime and TRICARE Select for retirees; children are generally covered up to age 21 (23 if full-time students).
• TRICARE Young Adult can extend coverage for adult children up to 26.
• FEDVIP dental & vision is available via BENEFEDS. Enrolling from 31 days before to 60 days after retirement helps you avoid a dental coverage gap.
• HSAs: If you're covered by TRICARE, you generally cannot contribute to an HSA because TRICARE is not an HSA-qualified HDHP. FSAs/HCFSA may still be available through a civilian employer.

At Medicare age: TRICARE For Life (TFL)

• TFL starts automatically once you have Medicare Parts A & B. You must keep paying Part B premiums to maintain TFL.
• In the U.S. and many territories, Medicare pays first and TFL wraps around as a near-zero-deductible supplement.
• Overseas or for non-Medicare services, TFL can act as primary where applicable.
• FEDVIP remains your dental/vision solution in the TFL years.

Post-9/11 GI Bill transfer & strategy

Key rules

• Transfer must be approved while you're in service. Historically this meant at least 6 years completed and agreeing to 4 more (check your service's current rules).
• Spouses can typically use transferred benefits right away; kids often can't use them until you've served 10 years.
• You manage allocations (who gets how many months) in milConnect, and can re-balance between dependents later if you still have service time left.

Stacking GI Bill with other programs

• Yellow Ribbon: Helps cover higher tuition at private or out-of-state schools that partner with VA.
• DEA (Chapter 35): For dependents of certain disabled veterans; pays a monthly stipend directly to the student and can sometimes be combined strategically with GI Bill.
• State benefits: Many states provide their own tuition waivers or scholarships on top of GI Bill (CVO-style programs, etc.).
• 529s & Roth IRAs: If GI Bill + state benefits cover most tuition, 529s can focus on room/board or end up feeding a Roth IRA via newer 529→Roth rules when it makes sense.

VA home loan, funding-fee exemptions & refunds

Funding-fee exemptions

• If you're receiving VA compensation—or have a qualifying pre-discharge memorandum rating—by the time you close on a loan, you're usually exempt from the VA funding fee.
• The exemption should appear on your Certificate of Eligibility (COE) before you close; if not, ask your lender and VA to review your status.

Retroactive refunds

• If you pay the funding fee at closing and VA later grants a rating with an effective date before closing, you may be due a refund.
• Refunds typically go toward reducing the loan balance or are issued back to you—your lender and VA will coordinate the mechanics.
• If your effective date is after the closing date, a refund is generally not issued under current policy.

Social Security after WEP/GPO repeal

Under current law, the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) have been repealed. That means many retirees who also receive government pensions (including certain military and civil-service combos) are no longer hit with those additional reductions.

What to do now

• Log into your my Social Security account and review your latest benefit estimate. Make sure your earnings history is accurate—fix gaps and obvious errors now.
• If you were previously impacted by WEP/GPO, confirm how your benefit is being recalculated and when any increases apply.

When to claim vs. your other income

• Claiming at 62 gives you more years of checks but a smaller monthly amount; delaying up to age 70 increases the monthly benefit.
• Because retired pay and VA compensation may already cover your basics, many retirees choose to delay Social Security to increase survivor benefits for a spouse.
• Early Social Security can also pair with Roth conversions and controlled withdrawals in your 60s; that's a tax-planning conversation with a pro.

Withholding, penalty rules & planning windows

Withholding & tax basics

• Retired pay: Set your W-4P in MyPay. SBP premiums are withheld pre-tax, lowering your taxable retired pay.
• VA disability compensation: tax-free at the federal level and in most states, which makes it a powerful cash flow floor.
• TSP/IRAs: Plan which accounts you'll tap first and which you might convert to Roth in your 50s/early 60s.

Early withdrawal penalty exceptions

• Age-55 rule (401k/TSP): If you separate from that employer in or after the year you turn 55 (50 for many public-safety roles), withdrawals from that plan can avoid the 10% early-withdrawal penalty. IRAs have different rules.
• Disability exception: The IRS standard for “permanently and totally disabled” is not the same as a VA P&T rating. Get written tax advice before leaning on this exception.
• 72(t) substantially equal periodic payments and a few other exceptions exist, but they're technical—and inflexible—once started.

Quick checklist for 20-year retirees

Frequently asked questions