Wednesday, 26 March 2025 Issue#024
Welcome to this week's newsletter, where we navigate the minefield of civilian life with more precision than an accidental Signal chat!
While we can't offer advice on operational security (clearly some folks need it), we can help you avoid your own personal "intelligence breach" when it comes to taxes and career transitions.
In this edition, we're bringing you two must-read articles that will have you more prepared for civilian life than a Pentagon briefing:
"Understanding How Retirement Pay and a Civilian Job Could Affect Your Taxes: Brace for Impact!" - Because the only shock and awe you want in your post-military life should be how smoothly you handle tax season.
"The Best AI Tools to Help Military Members Transition to Civilian Life" - Spoiler alert: None of these tools involve posting classified documents on gaming platforms.
So grab your coffee (or your favorite MRE beverage), settle in, and let's decode the mysteries of civilian life together. After all, transitioning should be easier than explaining to your boss why top-secret plans ended up next to Fortnite chats!
Understanding How Retirement Pay and a Civilian Job Could Affect Your Taxes: Brace for Impact!
Whether you’re diving into a new career, pursuing a passion project, or simply enjoying the flexibility of civilian life, one thing that often catches veterans off guard is how their income changes—and how those changes impact their taxes.
If you’re receiving military retirement pay and starting a new civilian job, congratulations! You’ve earned every bit of that retirement check, and stepping into a second career is a testament to your drive and skills. However, combining these two income streams could push you into a higher tax bracket, which might mean a larger-than-expected tax bill come April. Let’s break this down and explore some ways to avoid tax surprises while also taking advantage of potential tax breaks available to veterans.
When you receive military retirement pay, it’s treated as taxable income by the IRS. If you add a civilian salary to the mix, your total income for the year increases, which could bump you into a higher federal tax bracket. For example, if your retirement pay is $40,000 annually and your new civilian job pays $60,000, your combined income of $100,000 may place you in a higher bracket than when you were solely relying on your military pension. This doesn’t mean all of your income will be taxed at the higher rate—only the portion that falls into the higher bracket—but it could still mean paying more in taxes overall.
The good news is there are steps you can take to manage this situation and avoid being blindsided by a hefty tax bill. First, consider adjusting your withholding on both your retirement pay and your civilian paycheck. By increasing the amount withheld for taxes throughout the year, you can avoid underpayment penalties and reduce the risk of owing money when you file your return. It’s worth sitting down with a tax professional or using an online withholding calculator to figure out how much extra should be withheld based on your combined income.
Another smart move is to take advantage of tax-deferred savings plans offered by your new employer. Contributing to a 401(k) or similar retirement plan not only helps secure your financial future but also reduces your taxable income for the year. If your employer offers matching contributions, this is essentially free money that can help offset any additional taxes owed.
Veterans also have access to several tax breaks that can help ease the burden. For instance, if you have a service-connected disability rating from the VA, some or all of your disability compensation is tax-free. Additionally, many states offer property tax exemptions or reductions for disabled veterans—this can be especially helpful if you’ve recently purchased a home as part of your transition to civilian life. Be sure to check with your state’s Department of Veterans Affairs or local tax office to see what benefits are available in your area.
If you’re pursuing higher education or training for a new career, don’t forget about education-related tax credits like the Lifetime Learning Credit or American Opportunity Tax Credit. These credits can help offset tuition costs and other qualifying expenses, making it easier to invest in yourself without breaking the bank.
Finally, keep meticulous records of any job-related expenses that might be deductible on your federal return. While changes in tax laws have limited some deductions for employees, self-employed veterans or those working as independent contractors may still be able to deduct certain costs related to their work.
Navigating taxes as a veteran with multiple income streams can feel overwhelming at first, but with some planning and awareness of available benefits, it’s manageable—and even empowering. After all, understanding how taxes work is just another way of taking control of your financial future as you transition into this next phase of life.
If you’re unsure where to start or have specific questions about how taxes apply to your situation, don’t hesitate to reach out to a CPA who specializes in working with veterans or military families. They’ll be able to guide you through the process and ensure that you’re making the most of every opportunity available to you.
Remember: You’ve already handled challenges far greater than filing taxes! With some preparation and knowledge about how retirement pay and civilian job income interact, you’ll be well-equipped to avoid surprises and make informed decisions about managing your finances in this new chapter of life.
The Best AI Tools to Help Military Members Transition to Civilian Life
You’re stepping into a world that plays by different rules—one where “sir” and “ma’am” might get you some weird looks in the office, and acronyms like TDY and PCS don’t mean anything to your new coworkers.
At Honor & Purpose, we know firsthand how challenging this shift can be. That’s why we’re committed to helping service members navigate their transition with confidence, using the best resources available. Increasingly, in today’s world, artificial intelligence (AI) is one of the most powerful tools at your disposal.
AI can help you land a great job, find a place to live, manage your finances, and even nail your first civilian interview. If you’re preparing for life after the military, here are some of the best AI-powered tools to set you up for success.
Building the Perfect Resume and Cover Letter
One of the first (and often most frustrating) parts of the transition is translating your military experience into a civilian-friendly resume. You know you’ve got skills, but how do you make a hiring manager see it? AI is a great assistant here, it can suggest ways to showcase your skills that you likely wouldn't have come up with on your own right away.
At Honor & Purpose, we often see veterans struggle with this step because military roles don’t always have direct civilian equivalents. That’s where tools like Jobscan come in handy. It helps tailor your resume to specific job descriptions by identifying the right keywords to pass through an applicant tracking system (ATS). If you want a fast, AI-generated resume that looks professional, Rezi is another great choice. And if cover letters make you want to pull your hair out, Kickresume will draft one for you in seconds.
Finding the Right Job (Without Losing Your Mind)
Let’s be honest—job searching can feel like a full-time job in itself. That’s why we encourage service members to take advantage of AI tools that make the process easier.
LinkedIn’s AI job search recommends positions based on your background and skills, while Teal helps track applications, tailor resumes, and stay on top of follow-ups. If you’re not sure where to start, Handshake connects job seekers with companies that actively recruit veterans and transitioning service members. At Honor & Purpose, we also offer career guidance to help you narrow down what’s next, whether it’s project management, cybersecurity, logistics, or something entirely new.
Sorting Out Housing and Relocation
If you’ve been living in base housing for years, navigating the civilian housing market might feel overwhelming. AI can help you find a great place to live without endless scrolling through listings.
Dwellsy is a rental search platform that matches you with properties based on your needs, while Zillow’s AI-powered search recommends homes that fit your budget and location preferences. If you’re looking for shared housing to keep costs down, Bungalow finds compatible roommates and affordable rentals. Honor & Purpose can also connect you with trusted real estate professionals who understand the unique needs of transitioning service members.
Taking Control of Your Finances and Investments
Managing money in the military is different—there’s BAH, tax-free allowances, and a steady paycheck every two weeks. Once you transition out, things get a little trickier. That’s why financial planning is a huge focus for us at Honor & Purpose.
AI-powered financial tools like Wealthfront and Betterment make investing easy by automatically managing your money based on your financial goals. If budgeting is more of a priority, Tiller Money uses AI to track your spending and help you stay on top of bills. Whether you’re looking to buy a home, start investing, or just get a handle on civilian finances, we can help you build a plan that works for you.
Mastering Time Management and Productivity
Between job hunting, networking, and figuring out your next steps, staying organized is crucial. We always tell transitioning service members to treat their job search like a mission—because it is.
AI tools like Notion AI can help you track job applications, create a transition checklist, and keep everything in one place. If you’re taking part in virtual interviews or networking calls, Otter.ai is a lifesaver—it transcribes conversations in real-time so you can focus on the discussion instead of scrambling to take notes. Motion is another smart AI tool that helps optimize your schedule, making sure you stay productive without burning out.
Acing the Interview (and Avoiding Awkward Silences)
Interviews in the civilian world are a whole different beast. While military promotions are based on performance and time in service, civilian job interviews often feel more like sales pitches—you have to sell yourself.
At Honor & Purpose, we offer interview prep because we know it’s one of the biggest hurdles veterans face. But if you need extra help, AI-powered tools like Yoodli act as a personal speech coach, helping you refine your answers and eliminate filler words. Google’s Interview Warmup provides real-time feedback, while Big Interview offers AI-driven coaching designed specifically for veterans.
Building a Strong Professional Network
Networking can be one of the biggest challenges for military members entering the civilian workforce. You might not have a built-in professional network like someone who has been in corporate America for years, but AI can help you make connections.
LinkedIn’s AI profile builder will optimize your profile to get noticed by recruiters. If you struggle with small talk or want to make a great first impression, Crystal Knows analyzes personalities and gives insights on how to communicate effectively with different people. And when you need help crafting networking messages or outreach emails, ChatGPT can generate polished, professional messages in seconds.
At Honor & Purpose, we’re also working to build a strong community of veterans and transitioning service members who support each other. Networking isn’t just about getting a job—it’s about building relationships that can help you throughout your entire civilian career.
Your Transition, Simplified
Transitioning out of the military doesn’t have to feel like an uphill battle. With AI-powered tools constantly evolving, you can build a resume that stands out, find the right job, manage your finances, and even practice for interviews—all with a little help from technology.
So if you’re getting ready to trade in your uniform for a business suit (or maybe just a nice polo and jeans), utilize some of these AI tools to make the process smoother.
