One of the best things you can do to ensure you’re making good financial decisions is giving yourself time. The Army began a pilot program in 2023 allowing soldiers to request retirement 24 months before their retirement date. Stars and Stripes reported that the Army recently extended the program through September.
Previously, soldiers could not request retirement until 12 months prior. With terminal leave, Skillbridge, medical appointments, and various other parts of the retirement process, it really doesn’t allow much time. More time to plan out your next chapter helps avoid rushed decisions.
Important decisions and considerations
There are several important, and often permanent, decisions retiring soldiers need to make. Decisions range from talking through the Survivor Benefit Plan (SBP) with your spouse to deciding on post-military career options.
There are also many different programs to learn about, including Department of Veterans Affairs (VA) benefits and services from veteran service organizations. It can be a bit overwhelming, so having a little extra time is especially handy.
Impact on spouses and families
Retirement often puts your spouse and family in a holding pattern to find out whether they’ll have to move one last time before you retire. They may be making career and education program decisions that are dependent on where you’ll be living in the near future.
Spouses may also have professional certifications and licenses they need to complete. For dual military couples, the extra time would allow for staggering retirement dates or other techniques to make the transition go a little smoother.
How extra time helps
It’s no secret that planning early for retirement is a good idea. However, until you have retirement orders in hand, it doesn’t feel real. In many cases, having retirement orders stops processes from disrupting your life (promotion boards, movement cycles for PCS, etc.). This can help stabilize your life and allow you to start planning with a real date and hard data.
More accurate retired pay calculations
With a set retirement date, you can calculate your retired pay more accurately. You no longer have to guess the years of service and rank at which you’ll retire. Other than an annual pay raise or two, the DOD Retired Pay Calculators give an accurate estimate of retired pay.
Knowing what you’ll receive in retirement, you can start planning things like who needs to work and how much you need to make. You can build your financial off-ramp to whatever you want life to look like after service.
Getting serious about saving
You might want to save some extra cash, but if you only have a year to plan, time isn’t on your side. With two years to save money, you can make up for lost ground. Military retirees will have some type of gap before they start receiving their first retirement paycheck.
Your final paycheck on active duty is held for an audit, so you may have a month or two gap in pay. Having extra cash on hand for this purpose is really helpful.
Personal experience and final encouragement
I requested retirement 24 months out, and I can’t imagine doing it any other way. I absolutely couldn’t have continued to provide value to the team at work and get all my personal business handled otherwise. Now I can do both.
Since I’ve had time to plan, we feel much more prepared as a family. Not everything happens exactly how we planned, but that’s military life. I genuinely hope the Army makes this program permanent and other services follow suit. Good luck in retirement!
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