Transitioning or retiring from full-time service

This guide is designed to help you transition out of full-time service and prepare you financially for the next stage of your life. We encourage you to use these resources to understand the key financial decisions you’ll have to make and the steps to take to set yourself up for the next phase. It also lists reliable sources of information and advice to help you make informed choices with your money.


A quick checklist of actions to help you prepare financially for the next stage of your life.



Watch our short videos on topics relevant to transitioning from full-time service.



MoneySmart’s Budget Planner will help you plan and prepare where your money is going.


Why does this matter?

Transitioning out of the service is a time of change and some of the changes you will experience have financial implications. We want you to have a successful transition that is as stress-free as possible, but we also want to make sure you and your family are protected.

Being on top of your finances is an important part of reaching your financial goals. It can also help reduce stress and anxiety, improve relationships and allow you to focus on other areas of your life.

Setting yourself up financially doesn’t have to be hard or complicated. This site and the MoneySmart website provide a source of reliable, impartial information, useful tools and other resources to guide you along your path.


Understand your superannuation

Understand your superannuation

Whether you are leaving the ADF for retirement, discharging on medical grounds, being retrenched or resigning, it’s important to find out the options you have for your super.

Generally you cannot access super unless you are retiring and have met a condition of release. If you are resigning, the employer component of your super will be preserved but member and ancillary benefits may be rolled over to another complying super fund.

If you are a member of DFRDB or MSBS, you may be entitled to a lump sum, a pension, or a combination of both. If you are under the new arrangement, you may be entitled to a benefit through ADF Cover if you are being discharged on medical grounds.

To find out more about your benefit entitlements, go to the CSC website.

Military compensation

Military compensation

The Department of Veterans’ Affairs (DVA) provides support for ADF members who are transitioning out of the service. To find out more about benefits and entitlements visit the DVA’s on base advisory service (OBAS) or go to the DVA website.

Personal insurance (death and invalidity)

Personal insurance (death and invalidity)

As an ADF member, you have automatic death and invalidity cover through ADF Cover, MSBS or DFRDB (depending on your membership). This cover will cease when you leave the ADF.

For information on your current death and invalidity cover read the Your Money Guide on this website or visit the CSC website.

If you want more cover than what you currently have, be aware that most external personal and accident policies contain war zone, war-like activity and notice of deployment exclusions.

To maintain your cover after you leave the service, you will need to source personal insurance privately. It’s a good idea to have your private cover in place before your termination date.



When you leave the service you’ll need to sign up for Medicare.  You will start paying the Medicare levy, along with your income tax. For most people, this is 2% of your income, although this can be more for higher income earners without adequate private health insurance.

Medicare will cover 100% of the costs if you are admitted to hospital as a public patient, some of the fees charged by GP’s and other medical professionals and it subsidises the cost of prescription medicines listed on the Pharmaceutical Benefits Scheme (PBS).

You can register with Medicare before you leave the service but you won’t be able to use it until after you leave the service. If you’re single, register with Medicare to get your own card. If you have a family you can simply be added to the family Medicare card.

For more information, visit the Department of Human Services.

Private health insurance

Private health insurance

Private health insurance covers a range of services not covered by Medicare, for example, a private hospital and the doctor of your choice, as well as ancillary services such as dental, optical and physio.

If you are single and earn over $90,000 or a family earning more than $180,000 and you do not have private health insurance you may have to pay an additional Medicare levy surcharge of up to 1.5%. This is in addition to the standard 2% Medicare levy.

When considering private health insurance, think about your cover needs, now and in the future. Generally, the more you are covered for, the higher the premium.

If you wait too long to take out private health insurance you’ll pay the Lifetime Health Cover Loading (LHC). This is a surcharge that increases your premiums by an extra 2% for every year after age 30 that you haven’t had private hospital cover. There are special conditions that apply to full-time ADF members who discharge after age 30. For more information, visit the Government’s Private Health website.



If you are currently in Defence housing, you will need to find alternate accommodation.

If you have a property, or are thinking about buying a home before you leave the service that you intend to live in, consider whether the Defence home ownership assistance scheme (DHOAS) could benefit you.

DHOAS is a scheme that helps ADF members own their own home by giving you a subsidy, paid directly into your qualifying home loan. If you have a period of full-time service greater than 4 years, you may be eligible for assistance through the scheme.

Service credit accumulated through eligible service can still be used after you leave the ADF.

There are a limited number of approved lenders who participate in the scheme so it’s recommended you compare what DHOAS may offer you with the cost of obtaining a loan outside of the scheme. You can find more information on the DHOAS website.


Goal setting

Goal setting

Whether you are retiring or moving on to the next phase of your working life, setting meaningful goals gives you a purpose, something to work towards.

Think about what you want to achieve financially in the short, medium and long term. Write a brief description of these goals and a timeframe for achieving them. Work out how much your will need to save regularly using MoneySmart’s savings goal calculator.

If you don’t already have an emergency fund, a good short-term goal might be to save 3-6 months’ worth of expenses as a safety net for any unforeseen circumstances.

If you are retiring, think about the type of lifestyle you want and how much it will cost.



When you leave the service your income source will change and it is likely your income amount will also change. To manage your money effectively you’ll need to redo your budget based on expected changes to income and expenses so that you can make sure you are still on track to reach your goals.

A budget helps you work out where your money is going, allowing you to exercise control and make decisions about what’s most important for you. You’ll find an easy to use budget planer on the MoneySmart website.

Savings and investments

Savings and investments

After you’ve set some goals and worked out how much you’ll need to save for them, you’ll be able to choose appropriate investments. Savings accounts are great for emergency funds and short-term savings, but if you are prepared to take on a little more risk, you could reach your long-term goals faster.

Cash – deposits with authorised deposit taking institutions (ADIs) are government guaranteed up to $250,000 per person, per ADI. These are low risk, low return investments.

Fixed interest – investments such as bonds, debentures and unsecured notes vary widely in risk and returns so make sure you understand what you are investing in.

Property and shares give you an income (rent/dividends) and may also increase in value over time. Short-term risks are higher but long-term average returns are typically higher. They are suitable for longer term investments.

Active share investors have higher costs and rarely beat the market consistently. Passively managed investments such as index funds are cheaper and usually deliver a return, before fees, similar to the index they are tracking.

MoneySmart has more information on saving and investing.

Managing debt

Managing debt

It’s important to keep your debts under control. Focus on paying off any high interest debt, such as credit cards or personal loans. If you have any high interest debt:

  • Choose the one with the highest interest rate and make additional repayments until it is paid off.
  • Next, allocate additional repayments to the debt with the second highest interest rate, and so on until all debts have been repaid.

If you have a mortgage, compare your interest rate with similar loans being offered by other lenders, and try to negotiate a better interest rate. Look for a loan you can pay off early without penalty.



A will is a legal document that dictates how your assets should be distributed when you die. Having a valid will is the best way to protect your loved ones. We suggest you:

  • Never use a will kit, use a qualified legal professional. ADF LEGALOs may be able to draft a simple will for free.
  • Check that your current will is up to date
  • Ask your lawyer about a testamentary trust if you are concerned about how your beneficiaries will manage their inheritance

Remember to update your will whenever there are any significant changes in your circumstances, for example if you marry, divorce or have a child.

Power of attorney (PoA)

Power of attorney (PoA)

A Power of Attorney (POA) gives someone the power to act on your behalf. That means they can make financial decisions, buy or dispose of assets, operate bank accounts, etc. as if they were you. You can limit a POA, for example, make it valid for a specific period of time, or only allow transactions up to a certain dollar amount.

  • General POA – valid while you still have mental capacity.
  • Enduring POA – continues to operate if you lose mental capacity.
  • Medical POA – allows your appointee to make decisions about your medical treatment if lose mental capacity, although this varies from State to State.

Please note: Only ever give someone a power of attorney if you completely trust them. If in doubt seek legal advice.

Where to get more information

Where to get more information

Choosing professional advisers

Choosing professional advisers

If you are thinking about getting financial advice, see our video called Financial advisers: the facts & the fiction, which will give you an idea of what to expect when you see a financial adviser.

We have a financial adviser referral program that lists financial advisers who have undertaken to operate on a genuine fee-for-service basis. We do not recommend or endorse the advisers on the list and any relationship between you and the adviser is a strictly private relationship.

For help with a simple tax return, a registered tax agent may be all you need. However if your financial affairs are more complex, you may need a qualified accountant. You can find appropriately qualified accountants via industry associations such as Chartered Accountants of Australia and New Zealand or CPA Australia.

For legal issues, start with the on-base Defence legal officers. LEGALOs can prepare simple wills free of charge.

Before choosing a professional, make sure they have the qualifications and experience to give the kind of advice you are after. Make sure you understand and agree the scope of the job and the fees before proceeding, these should be outlined in an Engagement Letter.




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