How to build a financial checklist before separation in 12 months

Read the rule, not the summary

Three rules get paraphrased wrongly more than any others, and each wrong version costs you a due date. People say 'start TAP when you get orders.' The Transition Assistance Program must start no later than 365 days before separation (24 months out is allowed for retirees), so month 12 is the latest start, not the earliest.

People say 'VGLI is a 120-day window.' SGLI runs free for 120 days after separation. You can convert to VGLI within 1 year and 120 days, and applying within 240 days means no health questions. That's three different clocks.

People say 'TRICARE carries over.' It doesn't, not automatically. A retiree must enroll in TRICARE Prime or Select within 90 days of the retirement date, or only Select is open until the next open season or a qualifying event.

Savant Wealth Management sorts the 12 items by due date, so you make one decision at a time with its numbers in front of you. The table shows the SBP election as the one hard stop before your retirement date, while the TRICARE and VGLI clocks start after it.

Step 1: Gather the papers at month 12

Most people assume the balances they remember are close enough. They aren't, because the SBP and TSP steps both run on these exact numbers. Print each of these and keep them in one folder:

From the job offer, collect the employer's benefits summary: the 401(k) match formula, the vesting schedule, the enrollment window and the health plan start date. If the offer was verbal, ask HR to email the summary.

Going on memory is the slip at this step. A balance that's off by $20,000 changes how much survivor coverage or withdrawal room you think you have.

• Retired pay estimate: branch pay calculator or retirement office
• Leave balance: the LES in myPay
• TSP balance and Roth split: TSP account, last quarterly statement
• SGLI coverage amount: SOES on milConnect
• DEERS dependents: milConnect
• Employer benefits summary from the job offer

Step 2: Pick TRICARE Prime or Select

Many people assume the new employer's health plan covers them from day 1. Most employer plans start after 30 to 90 days, and TRICARE covers that gap only if you enroll. Mark the 90-day TRICARE enrollment window on the calendar next to the health plan start date from your benefits summary. Enroll in Prime or Select through milConnect or your regional contractor before day 90. Miss it, and only Select is open until the next open season or a qualifying event.

Step 3: Sign the SBP election before the retirement date

People assume SBP can be sorted out after the move. It can't. The SBP briefing comes before you sign, and what you decide is the coverage base and who is covered. File DD Form 2656 through your retirement office before the retirement date. If you elect less than full coverage for an eligible spouse, your spouse signs a notarized concurrence.

Treating SBP as an after-the-move chore costs you either way. A missed election defaults to full spouse coverage, and changing it later is limited to narrow windows. The break-even math sits on the separate page, Is SBP worth it?, where Savant Wealth Management runs it.

Ask the retirement office one question: 'Has my election been received and logged?' A worrying answer is 'we'll process it after you're out.' If you hear that, ask for a dated copy of the form before you leave.

Step 4: Decide on VGLI inside 240 days

People assume VGLI can wait until the free SGLI months run out. Put day 240 after separation on the calendar instead, because applying by then skips the health questions. Before that date, get the new employer's group life offer in writing and compare the amount, the monthly cost and whether the coverage follows you if you change jobs. Your SGLI coverage amount from milConnect tells you what you're replacing. The VGLI versus term comparison has its own page.

Step 5: Set up the 401(k) before touching the TSP

Plenty of people assume leaving the military means rolling the TSP out right away. The decision at this step is smaller: keep the TSP where it is until the new 401(k) is enrolled and its match and vesting are confirmed. Moving the TSP is a separate decision, covered under TSP withdrawal planning. Before Savant Wealth Management proposes any move, it adds up what that move costs in tax.

Ask HR these before you pick a contribution percentage:

A worrying answer is a match that vests only after 1 year of service, or a 3-year cliff you won't reach. Ask whether you can roll the 401(k) into the TSP later; the TSP accepts eligible rollovers in.

The separation year piles income into 1 calendar year: final military pay, a lump-sum leave payment (taxed as wages, capped at 60 days over a career) and the new salary. Withholding on retired pay with a second job is covered under tax planning for veterans.

Quick test on the deferral limit: TSP and 401(k) deferrals share 1 employee limit. The IRS limit for 2026 is $24,500, plus $8,000 catch-up at 50 and over. Count the TSP deferrals already made that year first. Say you've put $9,000 into the TSP by July; that leaves $15,500 of room before catch-up.

• Match formula and vesting schedule
• Enrollment window and start date
• Rolling the 401(k) into the TSP later

What happens if you're a reservist at 58?

A reservist at 58 has no single separation day, so the checklist splits into 3 dates: the end of the civilian job, the retired pay application and age 60. Retired pay starts at 60 only after the member applies through his branch's personnel command, so the application is his own due date.

Check your branch's processing time and apply several months ahead. For Lamar, that office is Navy Personnel Command.

A hypothetical person, Lamar, 58, is a divorced Navy Reserve chief with 24 good years and a job as an IT manager at a hospital system. He holds $300,000 in the TSP and $240,000 in his hospital 401(k), $540,000 in all, and needs about $72,000 a year before tax. A court order divides his future retired pay.

Year 1, at 58: he keeps his $130,000 salary and defers $32,500 ($24,500 plus the $8,000 catch-up), so his taxable pay is $97,500. Year 2, at 59: he leaves at mid-year after $65,000 of pay, then takes $6,000 each month for 6 months from the 401(k), $36,000 in all. That's penalty-free because he left that employer after 55. Year 3, at 60: reserve retired pay of $2,400 each month starts. The court order sends $600 to his former spouse, so his share is $1,800 each month, or $21,600 a year. The other $50,400 ($72,000 minus $21,600) comes from his accounts.

His accounts supply more each year as salary fades and the pension share stays small, as the table shows.

TRICARE Retired Reserve (paid coverage) ends at 60, when TRICARE Prime and Select eligibility starts. DFAS pays the court-ordered $600 straight to the former spouse, so Lamar is taxed only on his own $1,800. Ignoring growth, the $540,000 becomes about $486,100 by the end of year 3 ($540,000 + $32,500 − $36,000 − $50,400). All investing carries risk, and you can lose money, including what you put in, so real balances will differ.

When does rolling everything into an IRA backfire?

Rolling a 401(k) into an IRA right after leaving a job backfires when you may need money before 59½. If you left that employer at 55 or later, withdrawals from its 401(k) avoid the IRS 10% early-withdrawal penalty. The same money in an IRA doesn't. Keep the old plan open and draw from it first.

Following 'consolidate your accounts when you leave a job' too literally costs Lamar that age-55 exception. Say he rolls his 401(k) into an IRA at 59, then withdraws $36,000 before 59½. The penalty is $3,600 (10%), on top of income tax on the full $36,000.

Quick test: if you leave a civilian employer at 55 or later and may need withdrawals before 59½, keep that employer's 401(k) open and draw from it first. Roll it to an IRA only after 59½. A plan with high fees or no partial withdrawals can change that, so ask for its withdrawal rules in writing.

This list follows a regular retirement or separation. Medical retirements and people with a divided pension follow different dates, and the SBP and VGLI cost comparisons aren't worked out on this page.

When to bring Savant Wealth Management into the list

You can do Steps 1, 2 and 4 alone with milConnect, myPay and the employer's benefits packet. The SBP election, the order in which accounts pay for a gap year and the tax cost of the separation year are worth an intro call with Savant Wealth Management, where those numbers sit on 1 page in order of due date. The fee schedule arrives in writing before that call.