You Might Need Extra Cash When You Leave the Navy
If you are leaving the Navy, you might need extra cash on hand as your separation date approaches. There are a few reasons for this, discussed below.
You May Lose Special Pays or Allowances
My 6-year retention bonus expired at the 24 year mark, so my income dropped by $59K the last year I was active duty. Something similar may happen to you. If you are reliant on this income, you may have issues if you don’t plan for it.
I was receiving extra money for being stationed in Guam, including COLA and a housing allowance for both my dependents’ location and Guam. When I went on terminal leave, I lost my Guam allowances. These were largely eaten up by Guam expenses I no longer had and therefore were a wash, but my paycheck dropped by thousands of dollars when I left Guam and went on terminal leave. Again, if you are reliant on this extra money for some reason, when it disappears you could have issues if you don’t plan for it.
Your Last Paycheck May Be Late
DFAS holds your final paycheck so they can conduct an audit to make sure you don’t have any debts to the government.
My final paycheck hit on time, but it wasn’t clear if that was going to happen until the very last day. If you are reliant on that paycheck hitting on time, you may need to have some cash to cover your bills. I know people who had their final pay delayed for weeks.
Your Job Hunt May Not Go Quickly
It is a good thing I don’t need a job, because if I did I probably wouldn’t have one! My experience with applying for jobs is that any type of federal hiring is an absolute mess and moves at a snail’s pace. The only type of person who can put up with federal hiring is those who don’t actually need the job.
When it comes to civilian jobs, I think that if I was willing to pull shifts in an ER somewhere that I could have a job an hour from now. Since I’m not interested in primarily clinical jobs, the positions I’ve applied for as a civilian executive have not gone beyond initial interviews. To be fair, I’m not trying that hard to get a civilian position, so that could be a contributing factor.
The bottom line, though, is that if you NEED a job you may want to save up some extra cash in case your job search does not move at the pace you are expecting.
Your VA Disability Payments Don’t Start for 2 Months
I retired June 1st, but my first VA disability payment won’t start until August 1st. There is a 2 month delay, and this is assuming that you get your determination on time like I did. I got mine a day or two after I retired, but I filed 6 months before my retirement date and was able to complete everything in Guam and after I returned CONUS.
If you are delayed in filing, your disability payments (if you warrant any) will be at least 2 months late, and perhaps more.
Conclusion
For all the reasons above (and perhaps others I missed), you may need to plan for extra cash when you retire or otherwise separate from the Navy.
July 13, 2026 at 07:47
Joel, what are your thoughts for selling back some leave to offset concerns for unforeseen expenses?
July 13, 2026 at 07:49
I’d call it a backup plan at best. My goal was to sell no leave back, but I think I sold a few days in the end. If you need cash that badly, though, you’ll probably take anything you can get.
July 13, 2026 at 14:55
How long does it take to start receiving retirement pay?
July 14, 2026 at 05:49
Assuming you submit the forms properly, it takes 1 month. I retired June 1st and received my retirement pay on time on July 1st.
July 19, 2026 at 16:04
Another one unique to later in the year retirement dates: I retired 1 Dec but the Navy paid my FITW to the Federal Government in December despite not paying me anything. Since it was caught in January, the Navy docked my retirement check and I only got (some) money back by filing an amended tax return (which I had to pay my accountant for as well). $5000 hit in my first year as a citizen because of admin delays.