Updated onOctober 30, 2022

Military Retiree Benefits - What Are They & How To Maximize Them

8 Min Read

Difficulty:moderate

Written by:**Sarah Sharkey**
Personal Finance Writer

Reviewed by: Kal Salem, CPA, PMP and Finance Consultant; MA in Accounting and BS in Supply Chain Management, Arizona State University

Fact-checked by: Somer G. Anderson, Ph.D., CPA, CGMA, CFE, Accounting and Finance Professor at Maryville University

Military retirees have access to extensive benefits and some of them enable you to earn dividends from them, in addition to the actual benefit, if you utilize them wisely.

Before you dive in:

Take the time to understand them fully - This investment will pay off literally if you do.
The Department of Veterans Affairs is an excellent place to receive in depth guidance about your benefits.
You may need the help of a lawyer to secure everything you are entitled to.

What Benefits Can You Get As A Military Retiree?

If you are a military retiree, you can enjoy many benefits after retiring from uniformed service. With so many benefits, it can be difficult to keep track of them all. Here’s a comprehensive list of the benefits you can get as a military retiree.

VA medical benefits: If you get a VA pension or completed qualifying service, you can get VA medical benefits.
VA home loan: The VA home loan offers a no down payment mortgage option with minimal credit requirements to most veterans and active-duty service members. You might also wish to look into other business loans for veterans.
VA educational benefits: Most veterans with an honorable discharge qualify for the GI Bill, which can cover the cost of college or technical school.
VA pension: On top of your retirement pay, you may be eligible for a VA pension if you served during specific wartimes.
Small business grants for veterans: You can apply for small business grants for veterans that exclusively work with veteran business owners. Although still competitive, this could increase your chances of receiving a grant.
Readjustment counseling: Transitioning back into civilian life isn’t always easy. You and your family may qualify for readjustment counseling at a nearby Vet Center.
Educational and career counseling: Veterans and their dependents can take advantage of free educational and career guidance.
Confidential counseling and support: Mental health services for former military members are available through the VA. You may not need to enroll in VA healthcare to use these services.
Federal hiring preference: The federal government gives eligible veterans a leg up in the hiring process for these competitive jobs.
Commissary privileges: As a military retiree, you can tap into savings at the local commissary.
Exchange privileges: In addition to commissary privileges, military retirees can enjoy exchange privileges at nearby commissaries.
Military ID card: A military retirement ID card is your ticket to discounts all kinds of discounts. Whether that’s a free haircut on Veteran’s Day or a regular discount at a local restaurant, your military ID card will come in handy.
Tricare: Tricare is a medical insurance option for military retirees and reserve retired. This access to relatively affordable healthcare is a key part of most retirement plans. Plus, it could mean access to retired military dental insurance.
Free legal assistance: Retired members of the Armed Forces can request legal assistance concerning personal matters such as wills, income taxes, and contracts. But the request will only be completed if there are enough resources available.
State-specific programs: Many states offer specific privileges to their local military retirees. If you aren’t sure what the options are, then ask your local VA.
VA burial allowance: There are many retired military death benefits. Even with a non-service-connected death, your loved ones can apply for a burial allowance. As of 2021, the burial allowance is $300, with up to $828 for a plot.
VA headstone or marker: The loved ones of military retirees can apply for a headstone or marker.
Burial flag: After a military retiree passes away, their loved ones can request a burial flag.
Burial in VA Cemetery: Most veterans, spouses, and dependents can be buried in a National Cemetery without any cost.
Burial or inurnment in Arlington National Cemetery: If you received the Purple Heart or Silver Start, then you qualify to receive burial in Arlington National Cemetery. If buried in a National Cemetery, then your loved ones can request a Presidential Memorial Certificate.
Burial at sea. The U.S. Navy offers burial at sea to some military retirees.

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How To Maximize Your Military Retiree Benefits?

Everyone wants to make the most of their retirement benefits, and a military retiree isn’t any different. Here’s what you can do to make the most of your benefits:

Stay in the military for 20+ years: You are eligible for 50% of your average highest 36 months of base pay after 20 years of service. If you can stay for 30 or 40 years, you’ll increase your retirement benefit.
Qualify for the military retiree pay raise: Make sure you receive the 2022 military retiree pay raise. In 2022, military members received a $59 raise for each $1,000 of their retirement pension.
Move to one of the best states for military retirement: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming are states that do not tax your military retirement pay. Consider moving to one of these states.
Contribute to your Thrift Savings Plan: The TSP is a great way to boost your retirement savings in a tax-advantaged way. Try to set funds aside in this account each year.

Where To Apply For Your Retirement Benefits?

It’s time to enjoy your retirement benefits! But you’ll need to apply for them through the Defense Finance and Accounting Service one year before retirement. Here’s what you need to know.

Start with your pre-retirement package: A year prior to your retirement date, your Branch of Service will give you a pre-retirement package. Within this document, you’ll need to make decisions about your benefit amounts and survivorship details.
Assemble the documents: You’ll need to gather your retirement orders, separation information, statement of service, and the high average base pay amount.
Submit the documents: The last step is to submit your DD 2656 form with all of the relevant information. At that point, you’ll find out how much you’ll receive in retirement, tax withholding information, leave decisions, and more.
Reach out for help: It’s a complex process. Don’t be afraid to reach out at 888-DFAS411.

I Qualify For A Medical Retirement - Can I Get Any Additional Benefits?

If you receive a medical retirement, it’s possible that you’ll qualify for additional benefits. But that’s not always the case.

Medical Retirement from military means that you are physically unable to do your job.
may also qualify for VA disability compensation.
In order to receive VA disability compensation, you must have received the injury while on active duty or in inactive duty training.

Are Family Members Entitled To Any Army Retirement Benefits?

Family members may be eligible to receive your army retirement benefits. You can also explore military spouse business grants. But there are plenty of strings attached. Here are some things to keep in mind:

Tricare: Surviving spouses of a died in active duty are eligible to receive their Tricare benefits for three years at no cost, as long as they don’t remarry. After the three-year mark, they can keep the benefit but must pay an annual fee.
Military retiree pay stops with the retiree's death: However, if the retiree set up a survivor benefit plan, that ensures a lifetime annuity for their dependents.
Commissary and exchange: One of the retired military spouse benefits for surviving spouses includes shopping at the exchange and commissary until remarriage.

Tips On Planning Your Military Retirement

If you are planning a military retirement, there are some things you can do to ensure a smoother ride. Here are some tips to consider.

Save along the way: Retirement can be expensive. Make an effort to save a portion of your income throughout your working years.
Consider starting a business: Income from a business would dramatically change your retirement plans. Here’s how to start a veteran-owned business.
Make a plan to move to a low-cost area: Instead of sticking in a high cost of living area, move to a more affordable location.
Take care of your health: Healthcare costs can get expensive in retirement. Get ahead of the game by taking care of yourself along the way.
Consider a second career: After 20 years in the military, you deserve a break. But you might decide to try a new career path with your military pension covering some of your basic expenses.

Making the Most of Your Military Retirement

Retirement from any organization should come with perks. You have a defined benefit plan with plenty of perks when you leave the military. Take some time to explore all of the benefits on the table.

Make sure you factor these in when planning out your retirement. But also consider adding extra padding to your retirement plans with additional savings or a brand new business. This is where our recommended business loans for veterans could come in handy.