How Determination and Training Prepared Veteran for Retirement

Last month, I interviewed a longtime friend of mine, Carlos Padilla, who after 20 years of military service, retired from the Coast Guard and is now a veteran living in Hawaii.

Carlos explains during this interview how his decision to join the Coast Guard helped him redirect his life to a better path and become successful at saving money. Here’s my interview with Carlos.

Carlos Padilla (middle) during his retirement ceremony

Hello Carlos! Thank you for talking to me today!

Hey Rose, Thanks for having me!

Carlos, we know each other for a long time but I still don't when you joined the Coast Guard?

I joined in July of 1998, just before my 28th birthday. I was on vacation in Puerto Rico and decided I didn’t want to return to New Jersey… so, off I went!

Whoa! Sounds similar to my story! How old were you when you joined?

I was 27.

Ah, so you already had some experience in the workforce.

Yes, I worked with my father. He was the Vice President of a hospital union in New York, but then he retired and so did most of the upper management that I knew. Things became complicated in the hospital and I left the job. After that, I worked a few dead-end jobs. My last job was in a supermarket and I felt that I wasn’t going anywhere. I had no direction in life and it didn't help that my friends were content with just getting high and going nowhere. At some point, I went on a vacation to Puerto Rico and while I was there, I had a lot of time to reflect on my life. That’s when I decided to join the Coast Guard.

You joined because you were at a dead-end?

Yes, and I needed a change. I felt like I had no future back home in New York. I knew school (college) wasn’t for me. My friends, who were in the same boat weren’t ever encouraging or thinking ahead. As much as I loved my friends, I knew that I needed to leave in order to succeed.

Do you still talk to them?

No.

That happened to me too in Puerto Rico, but I spoke to my friends a few times after I joined. The military separates you from everyone and changes your mindset. It’s like a change of lifestyle. When did you think, “This is my career?”

Before I even joined the Coast Guard, I knew it was what I was going to do for 20 years. So I called my job back home while I was still on vacation in Puerto Rico and resigned over the phone. I just didn't even care anymore about going back home. I didn’t even sign any military papers yet or talk to a recruiter. I just knew this was going to be my career.

Wow! You joined with the mindset of making the Coast Guard a career! That’s not often heard of. Most of the responses I get are students trying to pay off debt or using the military as a source of free education (GI Bill).

I think my age had something to do with it. I was in my late 20s, and I felt like I had to commit to something. If I was someone graduating high school and then going right into the military I would've probably gotten out in about 4 or 5 years, but by age 27, I had a different mindset and it was an adult decision I had to make.

So, you’re saying that the Coast Guard made you an adult?

Yes! I was a little wild when I was young. I didn’t have discipline and I constantly rebelled against authority. I had the opportunity to join the military when I was 18 but I come from a military family and I heard all the stories about how boot camp was so horrible. I didn’t like the idea of someone getting in my face and yelling at me. I thought I was Superman back then. I really needed to mature. When I was 27 though, I was ready to change. I matured a little bit and the military was what I needed.

Yeah, I understand that. I was 21 when I joined but before that, I was partying and being reckless. It wasn’t until I joined the Coast Guard that I learned how to be a responsible adult with my money and lifestyle. Speaking of money, when did you start preparing for retirement?

I started to invest in my retirement within the first 3 years of my Coast Guard career. I didn’t join the military with the mindset of learning how to invest my money. I didn't even know they offered opportunities like that. I learned more about money after I enlisted in the Coast Guard from people with experience and finance degrees than I would've ever learned back at home around broke people. I found all these opportunities about free financial classes that the Coast Guard offered, and I took them all. I never received any financial advice from my parents or friends. I was very naive about money early on. As time went on and I started understanding how money works, saving and Investing became the focal point for me.

Did you go out of your way to learn how to invest your money or were there military personnel that encouraged you to take classes?

It was a little bit of both. The classes were changing my mindset about money and were showing me new things I can do things with my income. Then, I applied the discipline I learned from my military service to my financial decisions. That was the key to everything. Once I started to see results from my investment I was hooked from then on. These classes showed me how to stretch a dollar. They also taught me to stop blaming everyone else for my bad financial decisions and start changing my own habits. In a nutshell, the military ended up being my “college”.

Did you find out about these classes at the beginning of your career or was it later throughout your career?

I first found out about the Thrift Savings Plan - a retirement plan for people in the military - around my third year in the Coast Guard. At first, I just opened up an account with the Thrift Savings Plan and just threw the bare minimum in there, not knowing what I was really doing. I wasn’t committed though because I thought it was a scam. I think this is because I was raised poor. I didn’t understand the concept of investing money and watching it grow. I thought money was only safe in my hands and I just didn’t understand getting free money for putting money somewhere. I just didn’t. When I started to see the returns, it encouraged me to invest more and put in as much as I could. Since then, I just start going for it. Now, I try to encourage people, especially younger people to invest, but I try not to preach to them.

I wish I had someone preach to me! I lived in Hawaii, one of the highest paid basic housing allowances for the military and I was blowing my money away! I look back and think, man! I should have saved some of my money!

Well, consider that your education because you’ll never do it again!

I learned my lesson! I can’t regret the fun I had thought, but you’re right, that was definitely a learning experience. Did you do any type of investing other than the Thrift Savings Plan?

Yes. before the military, I tried the stock market. Back then there was no technology. I only had the bank to provide me whatever information I'd need. There was no information out there, like the information you find now on the internet. Once I joined and saw the returns with the TSP, I closed the brokerage account and continued with the Thrift Savings Plan.

I heard this saying as a kid: Don’t work for your money, let your money work for you. I couldn’t understand this but once I saw the returns in the Thrift Savings Plan, I finally knew what it meant.

Besides Transitioning Assistance Program session (TAPS), what training or advice did the military give you, if any?

Aside from the TAPS program, they really leave you to your own devices. Luckily, I had a great command that knew that I was going to retire. They excused me from all the major projects, so I could focus on my retirement. I had enough time to do all the paperwork and doctor appointments necessary before leaving. I was really lucky. This is not always the case. I was just lucky I had a great command.

That’s really nice that your command allowed you to do the things you needed to complete before leaving. That’s not always the case. Both you and I have seen horrible situations where people were left out to dry.

Yes. For many commands, the mission comes first, and they don’t factor in that someone in the mission is retiring and they have other stuff to do. Luckily, I’m not married, and I don’t have kids, so I was able to work on my retirement when I wasn’t at work. Those who do have a family have to split their time between the mission, retiring, spouse, kids, and that leaves the person who is retiring with not much personal time. That’s not even factoring in if the person is in school, too. I’ll be honest, I was expecting to be screwed over, but I was extremely lucky.

The truth is, retirement after a 20-year career is another job in itself. There are so many decisions you must make and so many tasks you must complete, documents that you must fill out medical, schooling, finances. It’s overwhelming.

Speaking of retiring, how does it feel to be retired? How does it feel not to be in the military after 20 years?

It feels great! I was done. I needed to retire. I could have gotten promoted and continued on in the military, but I felt like I squeezed every last drop out of them. Now, I’m ready to find another 20-year job.

Has the military or the VA helped you in finding a job?

Yes, we’re in the beginning stages. When I retired, I just did what I wanted to do for a little bit. I took up hiking, starting to workout, eating better, but now I have to get back to work!

Yes! I had a sabbatical of my own, when I got out, I didn’t do anything for two whole months. I wasn’t too worried because I had enough saved in the bank. Lounging around gets tiring though. I can’t remain still for too long. Are you receiving any benefits now as a veteran?

Yes. When you apply for jobs, you’re part of a point system. Military vets get first priority in jobs if they are competing with civilians. The higher your disability rating is, the more points you have. You can only max out at 10 points though. I think it’s important that you document in your medical record every injury you have before you get out of the military, so the VA can help you get a proper disability rating and help you find a job.

What about medical? I heard that veterans receive 5 years of free medical under the VA.

Yes, I didn’t know about that until I was getting out and learning about retirement. That’s huge! It’s extremely beneficial and I would say it’s even more beneficial for those who have a family to take care of. I’m always hiking and doing physical things, so I need that medical coverage because anything can happen!

Carlos, as we come to a close, what are things you recommend to people who are getting out?

Start taking care of your finances, now. Increase your percentage to your Thrift Savings Plan, if you can afford it. Make sure you have an emergency fund and enough money to keep you afloat until you find a job.  Remember, If you leave the military and don’t have much money, you will take the first job that's offered to you. You’ll probably end up in a high stress low/paying job, but if you saved enough money to pay all your bills for several months, you’ll have time to search for the job that you want, and you'll have the luxury of rejecting those jobs you don’t want.

Also, start learning about retirement sooner than later. The process really feels like another job. You don’t want to rush through this. It’s a good opportunity to network with other veterans that have retired or those in the process of retiring. They may actually help you find a job or find information that you didn’t know about. These people can also be your support when you’re going through retirement as it can be a stressful situation.

Did you find anyone like this?

As a matter of fact, I did! Most of the people retiring in Hawaii, go back to the mainland, but one of the guys I met, stayed here on the island. He’s now a good buddy of mine.

These are really important details that everyone should know when they are getting out. I wrote about the importance of saving money while getting out in an article. It’s a jungle out there! Thousands of veterans are unemployed and many who are employed are working low-wage jobs. As you said, when you don’t have any money, you usually take the first one they offer you. As great as it is that the government tries to help veterans, they usually offer us low paying jobs. So, save money while you have it, right?

I’m glad that you mention that because throughout my military career, I worked in search and rescue and though I can work in that field as a civilian, I don’t want to! I did the job for 20 years and I’m ready to experience something different. Now, I’m competing with young people with college degrees and experience in the fields I’m interested. So, it may be more challenging than I thought.

Yeah, a career change is a lot harder than just finding a job. You’re going into a field you know nothing about. I also believe it’s a lot harder for military personnel too because they’re starting to pursue a career a lot older than their civilian counterparts. But I think it’s doable and it’s also rewarding. When you’re in the military you did what everyone else wanted but now that you are out, you have the opportunity to do what you want to do - If you have the savings and time. Carlos, thank you for talking to me today, and good luck with your endeavor in the civilian world!

Thanks, I hope it works out, and I hope it works out for you, too.

Thank you!