02/23/2011 02:06 pm ET Updated May 25, 2011

Transitioning From the Military

Reentering the civilian workforce after a career in the armed forces can be challenging even during the best of times. But with today's economic uncertainty and high unemployment rates, retiring and discharged military personnel may need an extra boost to develop a game plan and manage their personal finances during that transition.

The issue has gained increased visibility with the recent creation of the Consumer Financial Protection Bureau's Office for Service Member Affairs, headed up by Holly Patraeus, wife of Gen. David Patraeus and long-time advocate for educating military families on consumer issues.

Here are a few resources to help with the important financial and job-transition decisions you may face:

Transition Assistance. The government provides an intensive three-day Transition Assistance Program to separating or retiring service members and their spouses. Workshop attendees learn about setting career objectives, conducting job searches, current occupational and labor market conditions, resume preparation and interviewing techniques. They're also evaluated for their employability relative to the job market and receive information on current veterans' benefits.

The Department of Veterans Affairs' VetSuccess Program provides additional assistance to military personnel released because of service-connected disabilities. For those whose disability is so severe they cannot immediately consider work, VetSuccess offers services to improve their ability to live as independently as possible.

Finding a job. Although expertise acquired during military service often translates readily into marketable civilian job skills, it sometimes takes extra effort to make those links more apparent. Consider these tactics:
  • Begin your research well before you leave the military -- a year or more, ideally.
  • Start networking. Visit job fairs and let friends, relatives and fellow vets know you're looking.
  • Contact organizations that link job seekers with military-friendly employers such as Hire a Hero, Military Exits, Helmets to Hardhats and
  • Make your resume civilian-friendly -- watch out for military jargon that might be hard to understand.
  • Become acquainted with and post your resume on popular online job sites such as,, (the government's official job site), and (targets technology jobs).
  • Play up your military training strengths, such as ability to handle high-pressure situations and strong teamwork skills.
  • Many service members have one government-provided relocation left when they leave the service; so if a potential job entails a move and you're flexible about where to live, use that free relocation to your competitive advantage.

Continuing education. While investigating career options, learn what additional required education or certifications you lack so you can begin acquiring those skills now -- or at least map out a game plan for how to proceed after you leave the military.

The Post 9/11 GI Bill provides a broad range of financial support for education and housing to military veterans, including undergraduate and graduate degrees and vocational/technical training offered by institutions of higher learning approved for GI benefits. Other VA-sponsored education assistance programs include: Protect your retirement savings. Many military personnel participate in the Thrift Savings Plan (TSP), a retirement savings plan that shares many tax-desirable features of typical 401(k) plans. When you leave the military, you'll need to decide what to do with your TSP balance. You can:
  • Leave your money in the plan - although you can no longer make contributions;
  • Roll over your balance into a new employer's plan, if it accepts transfers;
  • Roll it over into an Individual Retirement Account (IRA); or
  • Take the cash value of your account.

Although the last option may sound appealing, beware: If you cash out before age 59 ½, not only will you have to pay federal (and possibly state) income tax on the distribution, but you'll also be slapped with a 10 percent early withdrawal penalty, very likely leaving you with only slightly more than half of your original balance. Consult a financial professional about your particular situation. If you don't know one, the Financial Planning Association is a good place to start looking.

One last tip: Money could be tight during your transition, so it's vital to develop a budget you can live with. Numerous free budgeting tools, including interactive budget calculators, are available online at sites such as the U.S. Financial Literacy and Education Commission's, the National Foundation for Credit Counseling,, and Practical Money Skills for Life, a free personal financial management site run by my employer, Visa Inc.

This article is intended to provide general information and should not be considered legal, tax or financial advice. It's always a good idea to consult a legal, tax or financial advisor for specific information on how certain laws apply to you and about your individual financial situation.

To participate in a free, online Financial Literacy and Education Summit on April 4, 2011, go to Practical Money Skills.