Making the decision to engage in a new career path can be a source of stress for anyone, regardless of age or economic status. It also marks a turning point for thousands of service members facing alternative means of employment.

In the 2015 Veteran Economic Opportunity Report, the Department of Veteran Affairs noted “a total of 2.2 million separations occurred between 2004 and 2012, which included 1.8 million active duty separations and 403,000 National Guard and Reserve separations.” Additionally, “approximately one out of two (53%) separating Post-9/11 Veterans will face a period of unemployment.”

The Department of Defense, together with the Department of Labor, has developed programs and training for transitioning service members with a heavy focus in learning essential skills in the areas of networking, job search, and personal finances. As financial counselors and professionals in our field, we stand poised to play a crucial role in enabling service members to realize a successful transition to civilian life. Partnering with transitioning service members and their families to develop a solid financial plan can serve to ease the stress that sometimes occurs when transitioning from one career field to another.

Challenges and Considerations Facing Veterans Today

When working with this specific population, it’s helpful to first be familiar with the unique challenges and considerations that face veterans today. While there are certainly potential for gaps in employment for anyone facing a career transition, these gaps are especially high among veterans transitioning to a civilian lifestyle. According to the Veteran Economic Opportunity Report, “about half of all Service members transitioning into civilian life have faced a period of unemployment within 15 months of separation.”

Lack of an emergency fund to cover gaps in income: Many service members lack sufficient funds in savings to cover living expenses during those gaps in income. With a level of debt that is often higher among active duty military than their civilian counterparts, some transitioning service members find it difficult to maintain even minimum debt payments through their transition to the private sector. This can be exacerbated when coupled with the loss of a spouse’s income during that transition. Many service members also find themselves facing a new sea of acronyms and undertake a learning curve in understanding differences in benefits and entitlements from the military to civilian world.

Differences exist in military vs. civilian health insurance plans: Significant differences often exist between health insurance benefits offered by Tricare for service members and those offered by standard employers in the way of monthly premiums, deductibles, and maximum out-of-pocket expenses. Additional differences in benefits or entitlements such as annual leave, life insurance, and tax exclusions make it challenging for service members to definitively compare military income to civilian compensation packages. Cost of living comparisons offer yet another point of consideration for veterans when determining the purchasing power of a new salary, in the way of food, housing, transportation, and other basic living expenses in various parts of the country.

Influence of Taxes on Civilian Pay: Transitioning service members must also consider the impact of state taxes on civilian salaries as they are faced with the loss of residency benefits afforded to mobile active duty service members. Individuals separating from service often also have decisions to make with the funds in their Thrift Savings Plan, the military’s version of a 401(k). For financial counselors, the ability to assist a veteran in navigating a successful transition necessitates a basic understanding of the various challenges and decision points he or she may face.

Voluntary or Involuntary Transition: Finally, it’s important to identify which category of transition best defines your client in order to best help your him/her to determine financial needs and goals. Is your client separating voluntarily or involuntarily? In today’s climate of military drawdowns, many are finding themselves displaced from the military for medical reasons or an inability to meet performance standards and/or expectations for promotion. Recent years have found that “25% of active duty Veterans (437,989 out of 1.76M) were separated from service due to behavior, performance, legal, and/or standards of conduct” (Department of Veteran Affairs, 2015, p. 20). Such separation is often unexpected and swift, making transition particularly difficult for this type of client.

Conversely, those who are separating voluntarily, whether through retirement or end of service obligation, may demand an entirely different counseling approach, to determine unique financial needs and planning. Identifying the particular circumstances your client faces in separation from service suggests a cookie cutter approach is not always best in working with transitioning military members.

Role of a Financial Professional

In addition to a thorough understanding of the challenges facing today’s veterans and the potential circumstances surrounding their transition, maintaining an arsenal of appropriate financial resources and tools is essential in coaching your client through a fiscally successful transition to civilian life. The Department of Defense has done an excellent job of developing curriculum for service members to engage in through installation Transition Assistance Programs. Referring clients to websites such as,, and provides clients with starting points to compare factors such as cost of living, mortgage rates, and health insurance plans, to name a few. Maintaining an up-to-date chart on Veteran Affairs disability compensation also introduces estimates into a client’s post-separation budget. All of these resources comprise a well-rounded toolbox for financial counselors to draw from when working with military clients.

Aside from a focus on employment, it stands to reason that a well-developed financial plan can greatly aid service members in executing a seamless and stress-free transition to a post-service lifestyle. Financial counselors can best help their clients succeed with the following steps in mind:

  1. Respond—Acknowledge your client’s fear of the unknown and general anxiety that accompanies any career transition.
  2. Identify—Assist your client with identifying any and all variables at play and potential scenarios he/she may be facing (e.g. will he/she be pursuing full-time school, part-time school, employment, or a combination thereof, etc.)
  3. Develop—Partner with your client in developing a plan of action to include both current and projected budget that may accommodate any scenarios or factors identified.
  4. Empower—Provide tools and resources to aid your client in adapting his/her budget or financial plan throughout transition.

Financial planning plays a key role in ensuring a smooth transition to civilian life. Ultimately, a basic understanding of the challenges facing veterans and families today, the circumstances of their transition, and the tools and resources available can help to ensure a worry-free transition and a well-developed financial plan for any future!


Department of Veteran Affairs (2015). 2015 Veteran Economic Opportunity Report.

Alyssa Blakemore, AFC® , is a graduate of Clearwater Christian College with a Bachelor of Arts in Interdisciplinary Studies. Her professional background has been that of a financial planning counselor for the Fort Campbell Financial Readiness Program and Fort Carson’s Soldier For Life Transition Assistance Program. She is currently pursuing a graduate degree in International Relations with Northeastern University’s College of Professional Studies.

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