Transitioning from military to civilian life can be an exciting yet challenging time for veterans. Roughly 50% of veterans say they were well prepared for the transition while 25% say the process was at least somewhat difficult, Pew Research Center reveals. From paying off debt and purchasing a home to securing healthcare insurance, life after the military naturally comes with a number of financial considerations. By taking time to get your finances in order, you can ensure your transition to civilian living is as smooth as possible.
Looking at your financial situation
Although the military offers a range of financial benefits for service members, it may be the case that you neglected your finances during your service. So, before transitioning to civilian life, it’s important to take an honest look at your finances to see how much you have in savings and how much money you need. Ideally, you should have a savings account, a retirement account, and an emergency fund with savings to cover six months of living (however, it’s never too late to start). If you have debt, you can make use of military debt relief programs, such as the Servicemember Civil Relief Act. This program places a 6% cap on interest rates for service members on debts accrued prior to service. From there, you can focus on increasing your savings while simultaneously paying off your debts.
Purchasing a home
After leaving the military, purchasing your own home is a natural life goal. Fortunately, financing options are available to help veterans make this dream a reality. VA loans, for example, are a mortgage option either partially backed or guaranteed by the Department of Veteran Affairs. Since the loan has VA backing, private lenders can confidently offer generous terms, such as a $0 down payment with great rates, limited closing costs, and no prepayment penalty if the borrower pays off the loan early. There’s also no required Private Mortgage Insurance. By using a VA home loan calculator, veterans can work out how much they can afford to borrow, along with potential monthly payments and interest rates.
Securing healthcare insurance
Transitioning service members are eligible for TRICARE: health insurance that provides coverage between the time you leave the military and before you find employment. VA health care benefits may also be available to honorably-discharged veterans, along with the Continued Health Care Benefit Program, which provides temporary coverage for 18-36 months if you lose eligibility for TRICARE. Ultimately, however, it’s essential to secure your own health insurance plan to help ensure you and your family’s health and safety. Life insurance is another important consideration. For example, Veterans’ Group Life Insurance is a great option that requires no medical underwriting as long as you apply for a plan within 120 days of retirement.
Starting a new life after leaving the military is an exciting yet challenging time for veterans. By taking key financial considerations into account, you can better prepare yourself to thrive in civilian life.