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New Army policy has just changed deployment lengths for medical/dental personnel to 9 months. The deployments will not be split in half anymore as has previously been done.
New Army policy has just changed deployment lengths for medical/dental personnel to 9 months. The deployments will not be split in half anymore as has previously been done.
$$$ hahaha.. am I the only one excited about that??
unless things are different for Officers or Health Professionals for some reason, deployment pay is tax free - up to a certain amount
New Army policy has just changed deployment lengths for medical/dental personnel to 9 months. The deployments will not be split in half anymore as has previously been done.
New Army policy has just changed deployment lengths for medical/dental personnel to 9 months. The deployments will not be split in half anymore as has previously been done.
Thank you for this information, sir!
Since deployments are not going to be split in half anymore, I suspect that fewer dentists will be deploying at all, but that those who are gone will be gone for longer? So instead of 2 going for 4.5 months each, 1 will go for 9 months?
If so, besides volunteering, what can one do to maximize their chances of being deployed? I know an AEGD is a great way to get a brigade dentist position and deploy, but what else can one do?
unless things are different for Officers or Health Professionals for some reason, deployment pay is tax free - up to a certain amount
Ah yes- that I've heard of. Also, you can contribute $50K to your TSP for tax-free growth if you serve in a combat zone.
No, not up to a certain amount. All of your pay is tax free. This includes bonuses and special pays, incentive pays, etc. You are also entitled to hostile fire/imminent danger pay, family separation allowance (if you have dependents), and depending on your deployment or unit you may even get some per diem. But most of all, unless you are buying crap on Amazon then you aren't spending any money on food, gas, entertainment, etc...
You can contribute up to an additional $53K on top of the annual $18K limit. If I was in a position to do that I would totally take advantage. Especially early in the career.
WAIT REALLY? That's amazing! $71K/year if you are deployed?
Let me ask you something- say that a hypothetical deployment stretches over a part of two calendar years. so you deploy in Sept. 2015 till May 2016. Can you contribute $142K over those two years to your TSP since you are in two calendar years?
I don't see any reason why not. The tax year resets so you have a clean slate to start contributions again. If you can swing that at a young enough age, there's no reason one can't have at least $2.5M-$3M by retirement.
$3M....in retirement....at a 4% safe withdrawal rate, that is enough to guarantee you $120K in passive income per year, for life. Wow.
Btw, you can accumulate that $3M even earlier than standard retirement age (which I am assuming you believe to be 60). You can actually accumulate it within 13 years, if you live frugally. I've got a detailed spreadsheet sitting on my desktop where I plotted this whole thing out. Took me only an hour, but it brought an immense sense of happiness that I can retire earlier than 60 if I want.
If you live on just your BAH and BAS (which is very possible), and invest 100% of everything else (basic pay, bonuses, special pay, etc.) into TSP and taxable accounts, then assuming a 6% average annual rate of return, you can get $2.1M at the end of year 13. My calculations assume you start as an O-3 with 0 years of service, get promotions every six years, and that you do a residency that is paid off along with your HPSP obligation by the end of year six in the military (so you start collecting MYRB year 7 onwards...an example of such a residency is the 2-year AEGD).
My current index fund is returning me 9% a year. So let's bump up the rate of return to 8%- you get $2.5M at the end of year 13.
$2.5M in assets at age 40 is enough to give you $100K/year for life in passive income. Obviously this will adjust for inflation- it will be $100K year one, more than that year 2, so that you don't lose purchasing power. This is more than twice what the military pension (after upcoming cuts) offers, and without you having to serve a full 20 years.
It's also assuming the liquidity of your assets. If it's TSP, you can't do anything with it until you're 59.5 y/o unless you're willing to take the penalties, which i am not.
After reading this thread, I'm starting to wonder if I'm in the minority when preferring shorter deployments.
WAIT REALLY? That's amazing! $71K/year if you are deployed?
Let me ask you something- say that a hypothetical deployment stretches over a part of two calendar years. so you deploy in Sept. 2015 till May 2016. Can you contribute $142K over those two years to your TSP since you are in two calendar years?
OK I looked it up and I was mistaken about combat zone inclusions. It's up to $53,000 total per year, for everything. So say you maxed out your 18K before you left for deployment, you can add an additional 35K. If your deployment rolls over into the next year, I couldn't tell you the logistics of contributions from that point. I'm not sure if the first 18K is counted as elective deferrals or additions.
I am (and intend to remain for the foreseeable future) a single guy
You're missing out on the good life 🙂
Yes in theatre, down range etc. You're bonus will be tax free. An if you look closely yu will see I have been "verified Army" by SDN. I have almost 8 years TIS. I've got a deployment to Iraq (no re-enlist down range unfortunately lol)
When you take the multi-year for $200k - the first $50k is sent to you (usually takes a couple of months from the day it is effective since it is a new payment and has to work its way through DFAS), and then it is paid on your anniversary date each subsequent year going forward without any hiccups (usually).I didn't catch that, I'm on my phone. Sorry about that.
That's what I'm confused about though. I received a bonus my first reenlistment tax free because I was deployed, but that was a set dollar amount dispersed over a period of time. But as far as dentists go, they are receiving that $50K retention bonus annually. So for 4 years, are they just signing up for a $200,000 bonus, with 50K paid immediately and the remainder dispersed on anniversary dates?
I know it sounds like silly semantics but we've been in long enough to know that those little details can make a huge difference.
So I Reread this post and I think you have a good plan. The only thing to keep in mind is BAH is based on location. If you would like to see the amounts, here is a link to a calculator:$3M....in retirement....at a 4% safe withdrawal rate, that is enough to guarantee you $120K in passive income per year, for life. Wow.
Btw, you can accumulate that $3M even earlier than standard retirement age (which I am assuming you believe to be 60). I'm a personal finance fanatic, so please indulge me while I share:
You can actually accumulate it within 13 years, if you live frugally. I've got a detailed spreadsheet sitting on my desktop where I plotted this whole thing out. Took me only an hour, but it brought an immense sense of happiness that I can retire earlier than 60 if I want.
If you live on just your BAH and BAS (which is very possible), and invest 100% of everything else (basic pay, bonuses, special pay, etc.) into TSP and taxable accounts, then assuming a 6% average annual rate of return, you can get $2.1M at the end of year 13. My calculations assume you start as an O-3 with 0 years of service, get promotions every six years, and that you do a residency that is paid off along with your HPSP obligation by the end of year six in the military (so you start collecting MYRB year 7 onwards...an example of such a residency is the 2-year AEGD).
My current index fund is returning me 9% a year. So let's bump up the rate of return to 8%- you get $2.5M at the end of year 13.
$2.5M in assets at age 40 is enough to give you $100K/year for life in passive income. Obviously this will adjust for inflation- it will be $100K year one, more than that year 2, so that you don't lose purchasing power. This is more than twice what the military pension (after upcoming cuts) offers, and without you having to serve a full 20 years.
At this point, you may be thinking: "Ok, well sure. If you can save that much, that's good. But remember, you must be 59.5 to withdraw from tax-advantaged accounts without penalty, which is what your TSP will become if you leave the military early."
To which I respond, yes, you're right. Except that I would refer you to the Roth IRA Conversion Ladder: http://rootofgood.com/roth-ira-conversion-ladder-early-retirement/
Of course, the expectation, which I mentioned earlier, through all this is living on just your BAH and BAS. Many will balk at this idea. I assume BAH + BAS is around $2.5K/month? Considering that as a college student, I live on less than $1K/month right now, you could double my spending (to take into account car insurance, etc.) and I'd still be comfortably within that BAH+BAS monthly spending range.
So I Reread this post and I think you have a good plan. The only thing to keep in mind is BAH is based on location. If you would like to see the amounts, here is a link to a calculator:
http://www.defensetravel.dod.mil/site/bahCalc.cfm
Since it is based on location, and you will most likely be in a military town; places know how much the military makes in BAH. The only way I can see living with that sort of usable income is by living in the really shady parts of town, which usually (but not always) includes RIGHT outside the gates. Also having a roommate or two, or being a habitual deployer. A lot of single folks pocket all of their BAH while deployed so they spend even less while making more.
But when you're stateside, unless you are doing any of those things I mentioned, it would be very difficult to live on that sort amount.
Oh and you mentioned the exchange and commissary. Yes they can be cheaper, but not always. In some of the big military towns, the local stores and supermarkets know that the military is a significant portion of their potential customer base, so they make their prices competitive enough to beat a lot of the prices on post (even with the tax-free).
These are just things to keep in mind. Overall, it sounds like you are really thinking things through and planning for the future, so you'll do well regardless 🙂
$3M....in retirement....at a 4% safe withdrawal rate, that is enough to guarantee you $120K in passive income per year, for life. Wow.
Btw, you can accumulate that $3M even earlier than standard retirement age (which I am assuming you believe to be 60). I'm a personal finance fanatic, so please indulge me while I share:
You can actually accumulate it within 13 years, if you live frugally. I've got a detailed spreadsheet sitting on my desktop where I plotted this whole thing out. Took me only an hour, but it brought an immense sense of happiness that I can retire earlier than 60 if I want.
If you live on just your BAH and BAS (which is very possible), and invest 100% of everything else (basic pay, bonuses, special pay, etc.) into TSP and taxable accounts, then assuming a 6% average annual rate of return, you can get $2.1M at the end of year 13. My calculations assume you start as an O-3 with 0 years of service, get promotions every six years, and that you do a residency that is paid off along with your HPSP obligation by the end of year six in the military (so you start collecting MYRB year 7 onwards...an example of such a residency is the 2-year AEGD).
My current index fund is returning me 9% a year. So let's bump up the rate of return to 8%- you get $2.5M at the end of year 13.
$2.5M in assets at age 40 is enough to give you $100K/year for life in passive income. Obviously this will adjust for inflation- it will be $100K year one, more than that year 2, so that you don't lose purchasing power. This is more than twice what the military pension (after upcoming cuts) offers, and without you having to serve a full 20 years.
At this point, you may be thinking: "Ok, well sure. If you can save that much, that's good. But remember, you must be 59.5 to withdraw from tax-advantaged accounts without penalty, which is what your TSP will become if you leave the military early."
To which I respond, yes, you're right. Except that I would refer you to the Roth IRA Conversion Ladder: http://rootofgood.com/roth-ira-conversion-ladder-early-retirement/
Of course, the expectation, which I mentioned earlier, through all this is living on just your BAH and BAS. Many will balk at this idea. I assume BAH + BAS is around $2.5K/month? Considering that as a college student, I live on less than $1K/month right now, you could double my spending (to take into account car insurance, etc.) and I'd still be comfortably within that BAH+BAS monthly spending range.
The biggest take home pearl of wisdom: save and live relatively frugally. Then you won't have to adjust your lifestyle much when in early retirement. One source of worry: co-pays for health insurance are going up very quickly.
What is the current deployment length for dental specialists? What is the usual need for each specialty? Do most people still volunteer to deploy?