What You Must Know When Transitioning

Contributed By LaQuan Daniel for NavySeal.com

Transitioning Service members know Your Numbers

If you have served in the U.S. Military, then you and your family are accustomed to a certain financial lifestyle, amenities and accommodations. These luxuries if you will can come in the form of reimbursement for moving expenses, basic allowance for housing, food allowance, special pays and a slew of other taxable and non-taxable items.

Once you walk out the military door with your DD-214 or separation documents in hand. So goes the financial safety umbrella we are all accustomed to. So long are the days of telling big Sarge you’re going to check out for the day, because you have some errands to run knowing you are still on the clock. So, long are the days of taking your child to the emergency room and not receiving a bill because Tricare has your six covered.

But, hello to a world of clocking in and out, lack luster leadership and management, civilian mentality and most of all a potential huge pay cut. When negotiating salary, which if you have served in the military isn’t a thing. Here are some items to consider when trying to figure out the minimum magic number that will allow you to live that same comfortable lifestyle. Off course these items are not all inclusive, but should give you a nice starting point.

Base Pay

Basic Allowance for Substance (BAS)

Basic Allowance for Housing (BAH)

Special Duty Pays

Clothing Allowance

If you do not have life insurance consider incorporating that payment in your salary

Utilities

Groceries

Gas

Child care

There are a couple of key considerations when negotiating salary. 1) Have the credentials and experience that warrant at least the minimum salary that you are asking for. 2) consider the amount you negotiate, will need to cover the additional state and federal taxes you will incur. Much of the entitlements and pays listed above are non-taxable in the military. We often do not consider that in negotiating civilian salary. In addition, understand the more money you make in the civilian sector the more that will be taxed.

Example.

In the civilian sector take home pay from a 100,000 salary does not look the same, nor go as far as the 100,000 military salary you made. Keep that in mind! So, if you determine your magic salary number to cover all of your expenses is 100,000 at a minimum. 100,000 in the civilian sector may look more like 80,000-90,000 depending on tax brackets and such. So, negotiate for the higher salary to offset the loss. In addition, it might be wise to invest in some passive income avenues like a rental property while you are still stable in the military to generate some extra income to close the gap.

My disclaimer to this all is I am not an account, so do not take any of my advice if it does not make legal, ethical or moral sense to you. But, if it does make sense, then consider the previously mentioned during your transition. God bless and thank you for your service.

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