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. 

About the Authors

Sarah Sharkey

Written by: Sarah Sharkey

Personal Finance Writer

Sarah Sharkey is a personal finance writer who enjoys helping people make better financial decisions.

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Kal Salem

Reviewed by: Kal Salem

CPA, PMP and Finance Consultant

A CPA and finance professional working with small businesses to educate owners and grow alongside their businesses. He holds a Masters in Accounting and a BS in Supply Chain Management. Owner at Salem CPA Services LLC.

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Somer G. Anderson Ph.D.

Fact checked by: Somer G. Anderson Ph.D., CPA

Accounting and Finance Professor

Dominique Broadway is an award-winning personal finance expert. She provides advice on all areas of personal finance including student loans. Her advice has been featured in numerous publications. Dominique is committed to helping tackle the student loan crisis and helping individuals make informed financial decisions.

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