Your Guide to Military Retirement Benefits

Last updated 5 days ago. Our resources are updated regularly but please keep in mind that links, programs, policies, and contact information do change.

Transitioning from active military service to retirement marks a significant milestone, bringing both new opportunities and adjustments. While daily life changes, support from a grateful nation continues through benefits earned by service members and extended to their eligible family members.

Understanding these benefits – offered through the Department of Defense (DoD), Department of Veterans Affairs (VA), and Defense Finance and Accounting Service (DFAS) – is crucial for maximizing support during retirement. This guide provides a comprehensive overview of healthcare, financial, education, housing, employment, and other privileges available to U.S. military retirees and their families.

Healthcare Options

Maintaining health and well-being is paramount in retirement. Military retirees and their families have access to comprehensive healthcare options through TRICARE and potentially the VA Health Care system. Retirement triggers significant changes in eligibility and enrollment requirements, making proactive planning essential.

TRICARE for Retirees

Upon retiring from active duty, your TRICARE status changes. This is a critical transition requiring deliberate action to maintain health coverage for civilian care. Failure to enroll in a new TRICARE plan means you and your family will only be eligible for care at Military Treatment Facilities (MTFs) on a space-available basis. You and your family members will also need to obtain new Uniformed Services ID cards reflecting your retired status.

Several TRICARE plans are available to retirees and their eligible family members under age 65:

TRICARE Prime: A managed care option similar to a Health Maintenance Organization (HMO), available in designated Prime Service Areas in the U.S. Enrollment is required, and you select or are assigned a Primary Care Manager (PCM) within the network who manages your care and provides referrals for specialists. Using providers outside the network without a referral incurs significant out-of-pocket costs.

TRICARE Select: A self-managed, preferred provider organization (PPO)-style plan available domestically and overseas. You have the freedom to see any TRICARE-authorized provider without referrals. Your costs (deductibles, cost-shares) will be lower if you use providers within the TRICARE network compared to non-network providers. Enrollment is required.

US Family Health Plan (USFHP): An additional TRICARE Prime option available only in specific geographic service areas through established non-profit healthcare systems. You must enroll in the plan and receive all care, including pharmacy services, through its network providers. Care at MTFs or from standard TRICARE network providers is not covered. USFHP is available in six designated regions.

TRICARE Retired Reserve (TRR): A premium-based plan available for purchase by members of the Retired Reserve (Guard and Reserve retirees) who are under age 60 and not yet drawing retirement pay, and their eligible family members. TRR offers coverage similar to TRICARE Select but requires payment of monthly premiums in addition to standard deductibles and cost-shares.

TRICARE Select Overseas: Available for retirees and their families living overseas. It functions similarly to TRICARE Select in the U.S., allowing care from any TRICARE-authorized overseas provider, with applicable deductibles and cost-shares. Access to overseas MTFs is on a space-available basis.

TRICARE Plus: A primary care enrollment program offered at some MTFs, subject to capacity and availability. Enrollment is specific to the MTF and allows access to primary care there. It does not cover specialty care or care outside the MTF.

For adult children who lose regular TRICARE eligibility (typically at age 21, or 23 if a full-time student), TRICARE Young Adult (TYA) offers an option to purchase coverage (Prime or Select options available) up to age 26.

TRICARE Enrollment and Costs

Military retirement constitutes a Qualifying Life Event (QLE) for TRICARE. This QLE opens a 90-day window following the official retirement date during which you must actively enroll yourself and eligible family members into a TRICARE health plan to maintain continuous coverage for civilian healthcare. Enrollment is not automatic.

Failure to enroll within this 90-day period results in the loss of TRICARE coverage, except for space-available care at MTFs. If you miss the 90-day window, you must wait until the next annual TRICARE Open Season (typically fall) or experience another QLE to enroll. However, TRICARE allows for retroactive enrollment up to 12 months after the retirement date. If approved, coverage is effective back to the retirement date, but this requires paying all enrollment fees or premiums retroactive to that date.

The enrollment process involves several steps:

1. Ensure your information is up-to-date in the Defense Enrollment Eligibility Reporting System (DEERS).
2. Obtain new Uniformed Services ID cards for the retiree and eligible family members.
3. Choose a TRICARE plan and enroll within the 90-day window (or request retroactive enrollment within 12 months). Enrollment can typically be done online via the Beneficiary Web Enrollment portal on the milConnect website, by phone with the regional contractor, or by mailing an enrollment form.
4. Pay any required enrollment fees or premiums.

Retirement also marks a shift in healthcare costs. Retirees and their families pay different rates than active-duty families. Costs depend on the chosen plan and the sponsor’s initial entry date into military service, which determines placement into Group A (entered service before January 1, 2018) or Group B (entered service on or after January 1, 2018). Key cost components include:

• Annual Enrollment Fees: Required for TRICARE Prime and TRICARE Select for retirees and families (unless exempt, e.g., medically retired/survivors in Group A). Fees vary by plan (Prime/Select), group (A/B), and coverage type (individual/family).
• Monthly Premiums: Required for TRICARE Retired Reserve (TRR) and TRICARE Young Adult.
• Annual Deductibles: An amount paid out-of-pocket before TRICARE begins cost-sharing. Applies primarily to TRICARE Select and TRR. Deductibles vary by group (A/B) and network status.
• Copayments/Cost-Shares: Fixed dollar amounts (copayments) or percentages of the TRICARE-allowable charge (cost-shares) paid for covered services. Amounts vary by plan, service type, network status, and group.
• Catastrophic Cap: The maximum amount a family pays out-of-pocket for TRICARE-covered services each calendar year. Once the cap is met, TRICARE pays 100% of allowable charges for covered services for the rest of the year.
• Pharmacy Costs: Vary based on the drug’s formulary status and where the prescription is filled.

2025 TRICARE Costs for Retirees (Groups A & B)

The following table summarizes key costs for TRICARE Prime and TRICARE Select retirees for Calendar Year 2025. Costs are subject to change annually. Always verify current costs at the official TRICARE website.

Notes: Group A = Sponsor entered service before Jan 1, 2018. Group B = Sponsor entered service on or after Jan 1, 2018. POS = Point of Service option applies, typically involving deductibles and 50% cost-shares. * = Percentage of TRICARE-allowable charge after deductible is met. Limits apply to certain inpatient costs.

TRICARE For Life (TFL)

For most retirees, turning 65 (or becoming eligible for Medicare earlier due to disability or End-Stage Renal Disease) marks another significant healthcare transition: eligibility for TRICARE For Life (TFL).

Eligibility: TFL is automatic, Medicare-wraparound coverage for TRICARE-eligible beneficiaries who are enrolled in both Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance). Coverage starts the first day both Part A and Part B are effective. TFL is an individual entitlement; family members who are not Medicare-eligible remain covered under their existing TRICARE plan until they become Medicare-eligible.

The Critical Importance of Medicare Part B: Enrollment in Medicare Part B is mandatory to maintain TRICARE eligibility once you become entitled to Medicare Part A. If you fail to enroll in Part B when first eligible, or if you drop Part B coverage later, you will permanently lose your TRICARE coverage (including TFL and pharmacy benefits). This requirement applies even if you live overseas where Medicare provides limited or no coverage.

How TFL Works: TFL acts as a secondary payer to Medicare in the U.S. and its territories. You do not need a separate TFL enrollment card; simply present your Medicare card and your Uniformed Services ID card to providers. In most cases, the provider files claims with Medicare first. Medicare pays its share and forwards the claim to the TFL contractor who then pays the remaining TRICARE-covered portion directly to the provider.

Understanding provider participation status with Medicare is helpful:

• Medicare-Participating: Accept Medicare’s approved amount as full payment. TFL covers the remaining TRICARE-allowable portion. Usually results in no out-of-pocket costs for services covered by both.
• Non-Participating: Accept Medicare but don’t agree to the approved amount. Can charge up to 15% over the Medicare-allowed amount (the “limiting charge”). Medicare pays its share, TFL covers the TRICARE-allowable portion, including the limiting charge.
• Opt-Out: Do not accept Medicare at all. Medicare pays nothing. TFL acts as the primary payer but only pays the amount it would have paid after Medicare (typically 20% of the TRICARE-allowable amount). The beneficiary is responsible for the rest, which can be substantial.

TFL Costs: There are no enrollment fees for TFL itself, but beneficiaries must pay the monthly Medicare Part B premium. Part B premiums are typically based on income. For healthcare services covered by both Medicare and TRICARE, there are generally no out-of-pocket costs after Medicare pays. If a service is covered only by Medicare, you pay the Medicare deductible and coinsurance. If a service is covered only by TRICARE (like some overseas care), you pay the annual TRICARE deductible and cost-shares. You pay the full cost for services not covered by either program. The TFL Cost Matrix provides detailed scenarios.

TFL Overseas: Medicare provides very limited coverage outside the U.S. and its territories. When using TFL overseas, TRICARE becomes the primary payer. You are responsible for the TRICARE annual deductible and applicable cost-shares for covered care received from TRICARE-authorized overseas providers. Remember, maintaining Medicare Part B enrollment is still required to keep TFL, even when living or traveling overseas.

VA Health Care Eligibility

Separate from DoD’s TRICARE program, military retirees may also be eligible for healthcare services provided by the Department of Veterans Affairs (VA).

Basic Eligibility: To be potentially eligible for VA health care, an individual must have served in the active military, naval, or air service and must not have received a dishonorable discharge. There are also minimum duty requirements, which vary depending on when the person served. Recent legislation like the PACT Act has expanded eligibility, making many Veterans who were exposed to toxins or hazards during service eligible for VA health care.

Enhanced Eligibility and Priority Groups: VA uses a system of 8 priority groups to manage enrollment and determine whether Veterans will have copayments for non-service-connected care. Higher priority is granted based on factors such as:

• Service-connected disability rating
• Receiving a Medal of Honor or Purple Heart
• Being a former Prisoner of War (POW)
• Receiving a VA Pension
• Qualifying for Medicaid
• Having income below certain thresholds
• Specific service history or exposures

Veterans in higher priority groups, particularly Priority Group 1 (e.g., 50%+ disability rating), generally receive care free of copayments.

Application Process: Veterans can apply for VA health care enrollment:

• Online at the VA website
• By phone via the VA health benefits hotline: 877-222-8387
• By mail using VA Form 10-10EZ, Application for Health Benefits
• In person at any VA medical center or clinic
• With assistance from an accredited representative, such as a Veterans Service Officer (VSO)

Using VA Health Care

Once enrolled, VA provides comprehensive healthcare services, often coordinated through an assigned primary care team.

Covered Services: VA covers a wide range of services, including:

• Preventive care (exams, immunizations)
• Primary and specialty medical care
• Inpatient hospitalization
• Mental health services
• Substance use disorder treatment
• Emergency and urgent care
• Prescriptions filled through VA pharmacies
• Long-term care services (eligibility varies)
• Vision and hearing services (eligibility varies)

Some services, like readjustment counseling through Vet Centers or care related to Military Sexual Trauma, are provided free regardless of enrollment status or income.

Costs and Copays: Care for conditions deemed service-connected by VA is provided free of charge. For non-service-connected conditions, Veterans may owe copayments for care, tests, and medications, depending on their assigned priority group and potentially their income. Veterans with higher disability ratings (typically 50% or more) or specific statuses (like Medal of Honor recipients) are often exempt from copays for all care. Current copay rates can be found on the VA website.

Interaction with TRICARE and Other Insurance: Having other health insurance, like TRICARE, Medicare, or a private plan, does not prevent a Veteran from enrolling in or using VA health care. Veterans can use both systems. VA may bill your other insurance for non-service-connected care, and these payments can sometimes offset or eliminate your VA copay responsibility.

Choosing Between VA and TRICARE for Care: Since VA medical facilities are considered TRICARE network providers, retirees eligible for both systems (dual-eligible) face a choice each time they seek care at a VA facility.

• If you choose to use your VA health benefit, VA rules regarding access, priority, and copayments (if any, based on priority group/income) will apply.
• If you choose to use your TRICARE benefit at the VA facility, TRICARE rules apply. This means you may be responsible for TRICARE deductibles and cost-shares/copayments associated with your specific TRICARE plan.

Crucially, care for conditions that VA has determined to be service-connected must be provided under the Veteran’s VA benefit; VA cannot bill TRICARE for service-connected care.

Dental and Vision Coverage (FEDVIP)

While TRICARE and VA health care cover many medical needs, comprehensive dental and vision coverage often requires supplemental insurance. The primary way for military retirees and their eligible family members to obtain comprehensive dental and vision insurance is through the Federal Employees Dental and Vision Insurance Program (FEDVIP).

Eligibility:

• Dental: Most military retirees and eligible survivors are eligible to enroll in a FEDVIP dental plan.
• Vision: Military retirees and eligible survivors can enroll in a FEDVIP vision plan only if they are also enrolled in a TRICARE health plan.

Enrollment: FEDVIP enrollment and management occur through the BENEFEDS portal. Enrollment typically happens during the annual Federal Benefits Open Season (usually mid-November to mid-December). However, retirement is a Qualifying Life Event (QLE) that allows enrollment outside of Open Season. Newly retiring service members have a window from 31 days before to 60 days after their military retirement date to enroll in FEDVIP.

Premiums: FEDVIP premiums for retirees and family members are paid on a post-tax basis. Payments are typically made through an allotment from military retired pay or via automatic bank withdrawal (ABW) set up through BENEFEDS.

Plan Options: FEDVIP offers a choice of multiple national and regional dental and vision carriers, each often providing different plan levels (e.g., standard and high options).

Financial Security

Retirement income and financial security are built upon several pillars, including military retired pay, potential VA benefits, and survivor protection plans. Understanding how these components work and interact is essential for long-term financial well-being.

Military Retirement Pay

Eligibility for military retirement pay is generally based on completing a minimum number of years of creditable service (typically 20 years for non-disability retirement) or qualifying for a disability retirement. For members of the National Guard and Reserve, longevity retirement pay typically commences at age 60, although certain periods of active duty service can potentially reduce this age.

The calculation of gross monthly retired pay follows a basic formula: Retired Pay Base x Service Percent Multiplier = Gross Retired Pay. The components vary depending on the retirement plan applicable to the member:

Retired Pay Base: This is the foundational figure for the calculation.

• Final Pay: Applies to members whose Date of Initial Entry to Military Service (DIEMS) or Uniformed Services (DIEUS) was before September 8, 1980. The pay base is simply the member’s final basic pay upon retirement.
• High-36 (or High-3): Applies to members whose DIEMS/DIEUS was on or after September 8, 1980. The pay base is the average of the highest 36 months of basic pay received during the member’s career, typically the last three years of service.

Service Percent Multiplier: This percentage reflects the length of service.

• Final Pay & High-36 Plans: The multiplier is 2.5% multiplied by the number of years of creditable service (e.g., 20 years = 50% multiplier; 30 years = 75% multiplier).
• Blended Retirement System (BRS): Applies to members whose DIEMS/DIEUS was on or after January 1, 2018, or those from earlier cohorts who actively opted into BRS. The multiplier is 2.0% multiplied by the years of creditable service (e.g., 20 years = 40%; 30 years = 60%). BRS also includes a significant defined contribution component through the Thrift Savings Plan (TSP).
• REDUX (CSB/REDUX): An option for members entering between August 1, 1986, and December 31, 2017, who elected it at their 15-year mark in exchange for a $30,000 Career Status Bonus (CSB).
• Disability Retirement: The multiplier is the higher of either the standard calculation based on years of service OR the percentage of disability assigned by the military service at the time of retirement.

Cost-of-Living Adjustments (COLAs)

To protect the purchasing power of retired pay against inflation, military retirement benefits generally receive an annual Cost-of-Living Adjustment (COLA). The COLA is typically based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) as measured by the Department of Labor.

However, the COLA calculation differs based on the retirement plan:

• Final Pay, High-36, and BRS Plans: Retirees under these plans receive the full annual COLA percentage increase announced each year.
• REDUX Plan: Retirees under REDUX receive a reduced COLA, which is typically the announced CPI increase minus one percentage point (but not less than zero).

COLAs are effective December 1st each year and are first reflected in the retired pay received on or around January 1st of the following year. Official COLA percentages are announced in the fall and detailed in memoranda available on the Defense Finance and Accounting Service (DFAS) or Military Pay websites.

Survivor Benefit Plan (SBP)

Military retired pay stops upon the death of the retiree. The Survivor Benefit Plan (SBP) is an insurance-type program that allows retirees to purchase an annuity for their eligible survivors, providing a continuous, inflation-protected lifetime income after the retiree’s death.

Purpose and Election: SBP provides income security for dependents by replacing a portion of the lost retired pay. Election to participate is generally made at the time of retirement and is often irrevocable or difficult to change later.

Beneficiary Options: Retirees can elect coverage for:

• Spouse only
• Spouse and children
• Children only
• Former Spouse (often pursuant to court order)
• Person with an Insurable Interest

Child coverage typically ceases when the child reaches age 18, or age 22 if a full-time, unmarried student. Special Needs Trusts can be designated to receive SBP payments for permanently disabled children.

Cost (Premiums): SBP participation requires premium payments, deducted from the retiree’s gross retired pay before taxes. This pre-tax deduction lowers the retiree’s taxable income. For spouse coverage, the premium is typically 6.5% of the chosen “base amount” (the portion of retired pay upon which the annuity is calculated).

Annuity Amount: The SBP annuity provides up to 55% of the elected base amount. The base amount can range from a minimum of $300 up to the retiree’s full gross retired pay.

SBP and Dependency and Indemnity Compensation (DIC): DIC is a separate, tax-free monthly benefit paid by the VA to eligible survivors of service members or veterans whose death was related to service-connected injury or disease. The “SBP-DIC offset” was fully eliminated effective January 1, 2023. Surviving spouses eligible for both benefits now receive the full SBP annuity payment from DFAS and the full DIC payment from the VA.

VA Disability Compensation

This VA benefit provides a tax-free monthly payment to Veterans who have disabilities that were incurred in or aggravated by their active military service.

Eligibility: To qualify, a Veteran generally needs:

• A current physical or mental disability
• An injury, event, or illness that occurred during active military service
• A causal link (nexus) between the current disability and the in-service event/injury/illness

The discharge must also have been under conditions other than dishonorable. VA may also grant service connection for disabilities presumed to be related to service based on certain exposures or circumstances.

Application Process: Veterans can apply for disability compensation:

• Online via VA.gov
• By mailing a completed VA Form 21-526EZ to the VA Claims Intake Center
• In person at a VA regional office
• With the assistance of an accredited VSO, claims agent, or attorney

Benefit Amount: The amount of monthly compensation depends on the combined disability rating assigned by VA, ranging from 0% to 100% in 10% increments. Veterans with a combined rating of 30% or higher may receive additional compensation for eligible dependents. Current VA compensation rates are available on the VA website.

Concurrent Retirement and Disability Pay (CRDP) & Combat-Related Special Compensation (CRSC)

A long-standing rule generally prevented military retirees from receiving both their full military retired pay and their full VA disability compensation simultaneously. Two programs provide exceptions to this rule for eligible retirees.

Concurrent Retirement and Disability Pay (CRDP): This program allows eligible retirees to receive both their full military retired pay and their full VA disability compensation, effectively eliminating the VA waiver.

• Eligibility: To qualify for CRDP, a retiree must be eligible for retired pay and have a VA-rated service-connected disability of 50% or greater.
• Enrollment: CRDP is generally automatic for those who meet the criteria; no application is required.
• Taxation: CRDP payments are taxed as military retired pay.

Combat-Related Special Compensation (CRSC): This is an alternative program that provides a tax-free monthly payment intended to replace the retired pay that is offset by the VA waiver, specifically for disabilities deemed combat-related.

• Eligibility: Requires eligibility for retired pay, a VA disability rating of 10% or more, and having retired pay reduced due to the VA waiver. The disability must be determined by the military service to be combat-related.
• Enrollment: Retirees must apply for CRSC through their specific branch of service using DD Form 2860 and providing supporting evidence.
• Taxation: CRSC payments are tax-free.

Choosing Between CRDP and CRSC: A retiree cannot receive both CRDP and CRSC payments simultaneously. If eligible for both, DFAS will typically pay the amount that is more financially advantageous to the retiree, but the retiree can elect which benefit they prefer.

Managing Your Pay (DFAS myPay)

The Defense Finance and Accounting Service (DFAS) is responsible for issuing military retired pay and SBP annuity payments. The primary tool for retirees and annuitants to manage their accounts is the secure online portal, myPay.

Key Functions: myPay allows users 24/7 access to:

• View, print, and save monthly Retiree Account Statements (RAS)
• View, print, and save annual IRS Form 1099-R tax statements
• Update mailing address and email address
• Start, stop, or change direct deposit information for pay
• Manage allotments
• Obtain official Verification of Pay letters for income proof
• View Combat-Related Special Compensation (CRSC) statements, if applicable

Accessing myPay: New users typically need to request a temporary password mailed to their address on file, then use that with their Social Security Number (SSN) to create a Login ID and permanent password.

Education Benefits

VA education benefits provide valuable opportunities for retirees to pursue further education or training, and importantly, these benefits can often be shared with eligible family members.

Post-9/11 GI Bill Transferability

One of the most significant education benefits is the ability for eligible service members to transfer their unused Post-9/11 GI Bill (Chapter 33) entitlement to their spouse or dependent children.

Eligibility to Transfer: This option is available only to service members currently serving on active duty or in the Selected Reserve who meet specific criteria:

• Completion of at least 6 years of service on the date the transfer request is approved
• Agreement to serve 4 additional years from the date of request approval
• The designated dependent (spouse or child) must be enrolled in DEERS

Transfer Process: The transfer request must be initiated by the service member while they are still serving through the DoD’s milConnect portal. VA does not handle the transfer request itself; it only administers the benefits once DoD approves the transfer.

Dependent Application to Use Benefits: Once DoD approves the Transfer of Education Benefits (TEB), the designated spouse or child must then formally apply to the VA to use the benefits. This is done by submitting VA Form 22-1990e, Application for Family Member to Use Transferred Benefits.

Benefits Provided: Transferred Post-9/11 GI Bill benefits can cover:

• Tuition and fees (paid directly to the school)
• Monthly Housing Allowance (MHA)
• Annual stipend for books and supplies

The Yellow Ribbon Program can help cover tuition and fee costs exceeding the Post-9/11 GI Bill maximum at participating private or out-of-state public institutions.

Usage Rules for Dependents:

• Spouses: Can begin using transferred benefits immediately after DoD approval. Spouses are not eligible to receive the Monthly Housing Allowance while the service member remains on active duty.
• Children: Can only begin using transferred benefits after the service member has completed at least 10 years of service. Children must typically use the benefits before reaching age 26.

Dependents’ Educational Assistance (DEA) Program

The DEA program provides education and training opportunities to eligible dependents of Veterans who are permanently and totally disabled due to a service-connected condition, or who died as a result of their service.

Eligibility: Available to spouses and children of Veterans or service members who:

• Died while on active duty or as a result of a service-connected disability, OR
• Are rated permanently and totally disabled (P&T) due to a service-connected disability, OR
• Are missing in action or were captured in the line of duty

Benefit: Provides up to 36 months of entitlement (45 months if first used before August 1, 2018). The benefit is paid as a monthly stipend directly to the student to help cover education or training costs. Current DEA rates are available on the VA website.

Period of Eligibility:

• Children: Generally eligible between ages 18 and 26. However, for those who became eligible on or after August 1, 2023, the upper age limit has been removed.
• Spouses: Generally have 10 years from the date eligibility is established or from the date of the Veteran’s death. This period may be extended to 20 years if the Veteran died on active duty or was rated P&T within 3 years of discharge.

Application: Apply online at VA.gov or by mail using VA Form 22-5490, Dependents’ Application for VA Education Benefits.

State Education Benefits

Beyond federal VA programs, many individual states offer their own education benefits for Veterans, spouses, and dependents who are residents of or attending school in that state. These benefits vary widely and can include:

• Tuition waivers or reductions at public colleges and universities
• State-funded scholarships or grants
• Special provisions for children of disabled or deceased Veterans

Finding these benefits requires checking with the specific state’s Department of Veterans Affairs (or equivalent agency). Resources to locate state-specific information include:

• State Department of Veterans Affairs Websites
• National Association of State Directors of Veterans Affairs (NASDVA)
• National Association of State Approving Agencies (NASAA)

Housing Benefits

The VA provides significant housing assistance benefits, primarily through its Home Loan Guaranty program, designed to make homeownership more accessible and affordable for eligible individuals.

VA Home Loan Guaranty

The cornerstone of VA housing assistance is the loan guaranty benefit. Rather than directly lending money in most cases, the VA guarantees a portion of a home loan made by a private lender. This guaranty protects the lender against loss if the borrower defaults, encouraging the lender to offer more favorable loan terms.

The key advantages of using the VA home loan benefit often include:

• No Down Payment: In most situations, VA-guaranteed loans do not require a down payment, as long as the loan amount doesn’t exceed the appraised value of the property.
• Competitively Low Interest Rates: While interest rates are set by the private lender and are negotiable, VA-backed loans often feature rates that are competitive with, or lower than, conventional loans.
• Limited Closing Costs: VA regulations limit the types and amounts of closing costs that a Veteran borrower can be required to pay.
• No Private Mortgage Insurance (PMI): VA-backed loans do not require PMI, regardless of the down payment amount, resulting in lower monthly payments.
• Reusable Benefit: The VA home loan benefit is a lifetime entitlement and can be used multiple times.
• No Prepayment Penalty: Borrowers can pay off their VA loan early without incurring any financial penalties.

Certificate of Eligibility (COE)

To use the VA home loan benefit, you must first establish eligibility based on your military service and obtain a Certificate of Eligibility (COE) to provide to your lender.

Service Requirements: Eligibility generally depends on the length of active-duty service, the era served, and the character of discharge (must be other than dishonorable). Minimum service requirements vary but are often shorter if discharged for a service-connected disability.

Requesting a COE: This is the official document verifying eligibility and entitlement amount. You can request a COE through several methods:

• Online via the VA.gov portal
• Through Your Lender: Many VA-approved lenders can access VA’s system (WebLGY) to obtain a COE on your behalf
• By Mail: By completing and mailing VA Form 26-1880, Request for a Certificate of Eligibility

Using Your VA Loan

Obtaining the COE is the first step. The subsequent process involves working with a private lender:

1. Apply with a Lender: Choose a VA-approved lender and complete their loan application
2. Provide COE: Give the lender your Certificate of Eligibility
3. VA Appraisal: The lender requests a VA appraisal to estimate the property’s market value
4. Underwriting: The lender reviews the appraisal, your credit history, income, and assets to determine loan approval
5. Closing: If approved, the lender works with you and a title company to finalize the loan and transfer ownership

Loan Limits and Entitlement: As of 2020, Veterans with their full VA loan entitlement do not have a VA loan limit. Lenders may still impose their own limits based on borrower qualifications, but VA does not cap the loan amount for fully entitled Veterans.

Refinancing Options:

• Interest Rate Reduction Refinance Loan (IRRRL): Also known as a “Streamline Refinance,” this allows refinancing an existing VA-backed loan to obtain a lower interest rate or switch from an adjustable to a fixed rate.
• Cash-Out Refinance: Allows borrowing against home equity by refinancing an existing loan into a new, larger VA-backed loan.

VA Funding Fee

Most VA loans require payment of a VA funding fee, a percentage of the loan amount paid one time at closing. This fee helps offset the cost of the VA loan program to taxpayers.

Exemptions: The funding fee is waived for:

• Veterans receiving VA compensation for a service-connected disability
• Veterans entitled to receive compensation but who receive active duty or retirement pay instead
• Surviving spouses of Veterans who died in service or from a service-connected disability
• Active duty service members who provide evidence of having received a Purple Heart before closing

Fee Amount: The fee percentage varies based on several factors:

• Loan Type: Purchase, Cash-Out Refinance, IRRRL, etc.
• Down Payment: For purchase loans, making a down payment of 5% or 10% or more reduces the funding fee percentage
• First-Time vs. Subsequent Use: Fees are generally higher for borrowers who have used the VA loan benefit before
• Military Category: Reservists and National Guard members may have slightly higher rates than Regular Military members for some loan types

Employment Transition Resources

Successfully navigating the shift from military service to civilian employment requires preparation and leveraging available resources. Several programs are specifically designed to assist retirees in this transition.

Transition Assistance Program (TAP)

TAP is a mandatory program for service members separating or retiring after 180 or more continuous days of active duty. It’s a collaborative effort involving DoD, VA, Department of Labor (DOL), and the Small Business Administration (SBA) to provide information, training, and resources for a successful transition.

Timeline: The TAP process must begin no later than 365 days prior to the anticipated separation or retirement date. For retirees, starting the process up to two years out is recommended.

Core Components:

• Individualized Initial Counseling (IC)
• Pre-Separation Counseling
• DoD Day (Managing Transition, MOC Crosswalk, Financial Planning)
• VA Benefits and Services Briefing
• DOL Employment Fundamentals of Career Transition (EFCT)

Optional Tracks:

• DOL Employment Track
• DOL Vocational Track
• DoD Education Track
• SBA Entrepreneurship Track

Key Resources:

• DoD TAP Website
• TAP Events
• Service-Specific TAP Websites
• Military OneSource

Veteran Preference in Federal Hiring

For retirees considering employment with the federal government, Veterans’ Preference provides a significant advantage in the competitive hiring process.

Concept: Eligible veterans are given preference over non-veteran applicants for most positions in the competitive service and many in the excepted service of the federal executive branch.

Preference Types:

• 0-Point Preference (SSP – Sole Survivorship Preference)
• 5-Point Preference (TP)
• 10-Point Preference (XP, CP, CPS)

Special Hiring Authorities:

• Veterans Recruitment Appointment (VRA)
• Veterans Employment Opportunities Act (VEOA)
• 30% or More Disabled Veteran Authority

Resources: The Office of Personnel Management’s Feds Hire Vets website is the primary resource for information on veteran preference and federal employment.

Other Benefits and Privileges

Beyond healthcare, finance, education, and employment, military retirees and families retain access to several other valuable privileges earned through service.

Space-Available (Space-A) Travel

This program allows eligible individuals to travel on DoD aircraft that have surplus seats after all official duty passengers and cargo have been accommodated.

Eligibility: Determined by category, with Category I being the highest priority and Category VI the lowest.

• Retirees: Uniformed Services retirees receiving retirement pay are eligible and fall into Category VI.
• Retiree Dependents: Eligible dependents of retirees can travel Space-A but generally must be accompanied by their sponsor.

Process: Successfully navigating Space-A requires planning and flexibility:

• Determine Eligibility & Category
• Research Locations
• Check Documents
• Register (Sign Up)
• Monitor Schedules
• Mark Present
• Roll Call

Resources: AMC Travel Site

Commissary (DeCA) Access

Military commissaries, operated by the Defense Commissary Agency (DeCA), offer groceries and household items at significant savings to authorized patrons.

Purpose & Savings: Commissaries sell goods at cost plus a 5% surcharge, which funds commissary construction and renovation. Shopping is tax-free. DeCA estimates patrons save thousands annually compared to commercial retailers.

Eligibility: Authorized patrons include:

• Active duty members and their dependents
• Members of the National Guard and Reserve and their dependents
• Military Retirees and their dependents
• Medal of Honor recipients and their dependents
• Veterans with a service-connected disability rating and their dependents
• Purple Heart recipients
• Former Prisoners of War (POWs)
• Eligible primary family caregivers of Veterans enrolled in VA’s Program of Comprehensive Assistance for Family Caregivers (PCAFC)

Resources: DeCA Official Website

Exchange Privileges

Military exchanges are retail stores located on military installations offering a wide variety of consumer goods, services, and food options, typically tax-free. Each service branch operates its own exchange system, but eligibility is generally reciprocal.

Purpose & Benefit: Exchanges provide convenient access to merchandise and services often at competitive prices, with the significant advantage of being tax-free. Profits generated by exchanges are reinvested into installation Morale, Welfare, and Recreation (MWR) programs.

Resources:

• AAFES (Army & Air Force Exchange Service)
• NEX (Navy Exchange Service Command)
• MCX (Marine Corps Exchange)
• CGX (Coast Guard Exchange)

Morale, Welfare, and Recreation (MWR) Access

MWR programs provide a wide array of recreational, fitness, social, and support activities on military installations to enhance the quality of life for the military community.

Purpose & Programs: MWR encompasses facilities and services such as fitness centers, swimming pools, golf courses, bowling alleys, libraries, auto skills centers, outdoor recreation equipment rentals, Information, Tickets, and Travel (ITT) offices, child and youth programs, and sometimes lodging options.

Resources:

• Local Installation MWR websites
• DoD MWR Libraries Portal
• American Forces Travel

Our articles make government information more accessible. Please consult a qualified professional for financial, legal, or health advice specific to your circumstances.