Why Retirement Planning Is Different for Veterans and Military Retirees

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Most retirement plans start with one question. How much do you need to save?

For a lot of the veterans we work with, that's the wrong first question. By the time they sit down with us, a big piece of their retirement is already built. It just doesn't look like a pile of money, so nobody counts it.

Retired pay. A VA rating. TRICARE. The TSP. Each one adds a wrinkle a typical financial plan isn't built for, and together they paint a completely different picture than the one your civilian coworkers are looking at.

Why a veteran's retirement looks different

A civilian retirement plan usually works like this. You save for 40 years, build up a big pile of money, then carefully spend it down and hope it lasts.

A military retiree's plan often starts somewhere else. Take Mike and Tasha. (They're made up, and so are their numbers, but we see a lot of families like them.) Mike retired from the Army at 42 after 22 years. He's 44 now, works as an operations manager here in Columbus, and Tasha teaches. They have two kids in middle school.

Here's what Mike already has coming in every month, before his civilian paycheck:

• Retired pay. Mike entered before 2018, so he's under High-36: 2.5% for each year of service. On a hypothetical $6,500 retired pay base, 22 years gets him 55%, or $3,575 a month.
• VA disability pay. Mike is rated 100%. For 2026, a veteran with a spouse and two kids under 18 gets $4,428.10 a month at 100%. It isn't taxable. (The added amount for each child generally stops at 18, or 23 if they're in school, so that piece of Mike's check shrinks as the kids grow up.)
• Both, in full. Because Mike has 20 or more years and a rating of 50% or higher, Concurrent Retirement and Disability Pay (CRDP) lets him keep all of his retired pay and all of his VA pay.

That's about $8,000 a month, and it goes up every year with the cost of living. For 2027 retired pay and VA pay both rise 3.6%.

What that income floor is worth

Here's a way to think about the size of it. If Mike and Tasha had no military benefits and wanted that same $8,000 a month from savings, a common rule of thumb says they'd need around $2.4 million, drawn down at 4% a year. And that rough number doesn't even account for the fact that the VA portion is tax-free and the whole thing keeps up with inflation.

Mike has that already. He earned it in 22 years of service, and it starts in his early 40s, decades before most people collect a pension or Social Security.

So now the question changes. Say Mike and Tasha spend about $10,000 a month. Their benefits cover about 80% of that. Their savings only have to fill the gap, about $2,000 a month, or $24,000 a year. Using the same rule of thumb, that's closer to $600,000 than $3 million.

That's simplified. It ignores taxes, Social Security later on, and a dozen other things a real plan would account for. But the point holds. For a lot of military families, financial independence is a lot closer than they think.

The decisions civilians never have to make

That floor comes with its own set of wrinkles, and getting them wrong can cost real money.

The Survivor Benefit Plan

Mike's retired pay stops when Mike dies. So does his VA pay. Tasha could qualify for a separate, tax-free VA benefit called Dependency and Indemnity Compensation (DIC). That usually takes a service-connected death, but a 100% rating opens another door: if Mike is rated totally disabled for 10 years in a row before he dies, Tasha can qualify even if his death has nothing to do with his service. And since 2023, DIC no longer reduces an SBP payment, so a surviving spouse can collect both in full.

The Survivor Benefit Plan (SBP) is how retired pay keeps going. Mike pays 6.5% of the base amount he elects, and if he dies first, Tasha gets 55% of it for life, with the same yearly cost-of-living raise. On full coverage, that's about $232 a month out of Mike's retired pay. The election happens at retirement and is very hard to undo, so it deserves real attention, ideally alongside a look at life insurance.

TRICARE, the VA and the employer plan

Mike, Tasha and the kids can keep TRICARE as long as Mike is a retiree. Mike entered service before 2018, so he's in Group A, and TRICARE Select runs $375 a year for the whole family in 2026. Compare that with what most employer plans charge for family coverage.

At 100%, Mike is also in VA Priority Group 1, which means no copays for his own VA care and no medication copays, and he qualifies for comprehensive VA dental care. VA care covers Mike only, though. Tasha and the kids go through TRICARE or Tasha's school district plan. And at 65, TRICARE For Life only works if Mike signs up for Medicare Part B.

Three health care systems, and a family has to figure out which one does what. That's a planning conversation most civilian families never need to have.

The TSP

Mike's TSP has about $140,000 in it. It can stay right where it is, and it's one of the cheapest plans around. The C Fund's total expense ratio for 2025 was 0.035%. Before rolling it anywhere, compare that with what your new 401(k) or an IRA costs. And if you're contributing to both the TSP and a new 401(k) in the same year, they share one contribution limit. We walked through all of this in How Military Retirement Benefits Work With a Civilian Job and a 401(k).

Taxes

VA pay is tax-free. Military retired pay is taxed federally, but Ohio lets you deduct it on your state return. Then there's the civilian paycheck on top of all of it. Taxable retired pay fills up the lower tax brackets before your salary ever shows up, which changes the math on traditional versus Roth contributions and on Roth conversions down the road.

Ratings and rules can change

A VA rating that isn't permanent can be reexamined. Retirement and benefit rules get changed by Congress. A good plan doesn't treat everything as guaranteed. It checks what happens if a piece moves.

A quick note on the VA side: we help with the money, not the claim. If you're still working on a rating, an accredited Veterans Service Officer can help you for free. Every Ohio county has a Veterans Service Office, and you can find yours at 877-OHIO-VET (877-644-6838). I wrote about how I built my own claim in How I Built My VA Disability Claim With Almost No Medical Records.

Why it helps when your advisor served too

I'll be honest about something. Working with veterans is the part of this job I enjoy most.

I served in the Marine Corps. I'm not the only veteran on our team, and ClearMind Capital as a whole is very pro-veteran. It's a niche we chose on purpose.

When a veteran sits down with us, there's a lot we don't need explained. We know what a DD-214 is, what an EAS date means, and why PCS season wrecked your savings plan three summers in a row. We know what it's like to leave a culture where everybody understood you and start over in one where nobody does.

We also know the mindset. In the military you're trained to put the mission first, to suck it up, and to never take more than you need. Those are great habits for 20 years of service. They don't always serve you as well in retirement.

That's where trust comes from. It isn't about swapping stories (though we'll do that too, haha). It's about knowing that the person looking at your plan understands where all the pieces came from and what you gave to earn them.

Somebody in your corner who says yes

Here's what we see over and over. A veteran builds that income floor, saves diligently on top of it, and then can't bring themselves to spend any of it.

They've been disciplined for so long that spending feels like breaking a rule. The family vacation keeps getting pushed to next year. The boat stays a "someday." They keep working a job they don't love because nobody ever told them they could stop.

Part of our job is running the numbers. The other part is being the person in your corner who looks at the plan and says, "You can do this." Take the trip with your kids while they still want to go with you. Retire sooner. Buy the boat. Whatever your picture of a good life looks like, if the plan backs it up, you've earned the right to go live it.

For Mike and Tasha, that might mean Mike leaves his civilian job at 52 instead of 62. It might mean a lake house. It might mean nothing changes except they finally stop worrying. That's their call to make, and our job is to show them what each choice actually costs, so the decision is theirs and they can feel good about it.

That's what The ClearMind Clarity Method™ is built for.

Where to start

• Pull your retired pay statement and confirm whether you're under High-36 or BRS.
• Write down your VA rating and your priority group.
• Add up what your retired pay and VA pay bring in each month, and compare it with what your family spends.
• Decide whether your SBP election still fits your family, and look at life insurance alongside it.
• Compare TRICARE with your employer's health plan before open enrollment.
• Check what your TSP costs before you roll it anywhere.

If you're a veteran or military retiree and want a second set of eyes on how your pieces fit, we'd be glad to help. You can get in touch here. Let's get it mapped out.

Cheers.

Common questions

How is retirement planning different for veterans?

A military retiree often starts retirement with a pension that pays for life, tax-free VA disability pay, and low-cost health coverage through TRICARE and the VA. That income floor can mean your savings need to cover far less, and it can start in your 40s. It also adds decisions civilians don't face, like the Survivor Benefit Plan and how TRICARE fits with an employer plan.

Can veterans reach financial independence sooner?

Often, yes. When retired pay and VA pay cover a large share of monthly spending, savings only need to fill the gap. That gap can take a lot less money to fund than a full retirement from savings alone, which can move financial independence years closer.

Does VA disability pay stop when the veteran dies?

Yes. VA disability compensation ends at the veteran's death. A surviving spouse may qualify for Dependency and Indemnity Compensation in certain situations, such as a service-connected death or a veteran who was rated totally disabled for 10 years in a row before dying. Military retired pay also stops unless the retiree elected the Survivor Benefit Plan.

How much does the Survivor Benefit Plan cost?

The premium is 6.5% of the base amount the retiree elects, taken out of retired pay. If the retiree dies first, the surviving spouse receives 55% of that base amount for life, with yearly cost-of-living increases.

Do veterans pay for health insurance in retirement?

Military retirees and their families can keep TRICARE, which has much lower fees than most employer plans. In 2026, TRICARE Select costs Group A retirees $375 a year for family coverage. A veteran with a VA rating of 10% or higher pays no copays for VA inpatient or outpatient care, but VA health care covers the veteran only, not their family.

Will ClearMind Capital help with my VA disability claim?

No. ClearMind Capital helps with financial planning, not VA claims. An accredited Veterans Service Officer can help with your claim for free. In Ohio, you can find your county's Veterans Service Office at 877-OHIO-VET (877-644-6838).

This content is for informational purposes only and does not constitute investment, tax, or legal advice. ClearMind Capital LLC is a registered investment adviser. Registration does not imply a certain level of skill or training. Past performance is not indicative of future results.

Planning around military benefits? See how we work with veterans and military families.

Written byShane DuckworthPartner | Private WealthView bio →

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