Army New change in deployment lengths

[krmower]

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.

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[ClosetNerd828]

$$$ hahaha.. am I the only one excited about that??

 

[Incis0r]

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?

$$$ hahaha.. am I the only one excited about that??

You get paid more for longer deployments? Really? I thought military dentists got a fixed salary.

 

[ClosetNerd828]

unless things are different for Officers or Health Professionals for some reason, deployment pay is tax free - up to a certain amount

 

[Incis0r]

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.

 

[Destiny11]

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.

What is the reasoning behind increasing deployment lengths from 4.5/6 months? Is it to save $?

 

[LFA20]

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.

what was the original deployment length?

 

[krmower]

I can only guess at the reason for the change in policy. My assumption is: 1) To minimize the impact to the mission that occurs with a change over of personnel i.e. when someone rotates in/out during the middle of the deployment there is a decrement in the capabilities of that unit because of the transition time and having to get the new individual up to speed on training and how things work. 2) Cost - it is expensive to train, equip, and transport multiple people for short duration deployments in small quantities. 3) Other individuals (both officers and enlisted) within the unit go for 9 months, why are medical/dental officers special?

 

[krmower]

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?

Within our region it comes down to what type of dentist is wanted for the deployment, who volunteers and how long since they joined i.e. the longer you have been in without deploying the higher you will be on the volunteer list OML.

 

[schmoob]

unless things are different for Officers or Health Professionals for some reason, deployment pay is tax free - up to a certain amount

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...

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.

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.

 

[Incis0r]

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?

 

[ClosetNerd828]

Commissioned officers do not receive a full tax exemption; their exclusion is limited to the highest monthly rate of enlisted pay, plus their $225 monthly imminent-danger pay. For 2012, this means officers must pay income taxes on any monthly pay above $7,609.50, the rate paid to the military services’ senior enlisted advisers, plus $225, a total of $7,834.50. Generally, this affects only O-5s and above.

Yes up to a certain amount.

"Commissioned officers do not receive a full tax exemption; their exclusion is limited to the highest monthly rate of enlisted pay, plus their $225 monthly imminent-danger pay. For 2012, this means officers must pay income taxes on any monthly pay above $7,609.50, the rate paid to the military services’ senior enlisted advisers, plus $225, a total of $7,834.50. Generally, this affects only O-5s and above."

 

[schmoob]

Touche! I stand corrected!
Wow, I didn't know that. Thanks for clearing it up. This is monthly base pay though, so im guessing that doesnt affect ASP, VSP, BCP, ISP (for OMFS's) since those are considered annual pays. I do know that bonuses are tax free though, up to any amount as far as i know. I've seen $100K bonuses distributed without a penny of it taxed.
So what I'd like to know is, say as a specialist I want to sign up for 4 more years, that's a $50K annual bonus. If I do this in theater, will all 4 years be tax free, or only the first year?

 

[schmoob]

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.
Dude, it gets even better. When you actually do file taxes for those two years, your AGI will be significantly lower. That means a larger tax return because you may get Earned Income Credit. Also, if you are on an Income Based Repayment plan from federal loans, it's based off of your previous years AGI. That means your payments for those years will be significantly lower in comparison to your peers, but you actually made a lot more money.
Military is not for everyone, but it's mind-boggling how full of $**t some people are on SDN. They say "it's not about the money, it's about serving others and helping people," yet they want to work in private practice in major cities. Then they complain of saturation and competition. They refuse to put on a uniform or even work in the VA because they don't think they'll get paid enough or their lifestyle will not be up to their standards. If one's a good dentist and smart with finances, they can do very well for themselves in almost any job.

 

[Incis0r]

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). 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.

 

[schmoob]

$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.
There are those who live like that, but I personally wouldnt. Life evolves and it will become increasingly difficult to live that frugally. Besides, after all those years of hard work you should live life and enjoy it. We only live once, we never know when our number's up, and we can't take it with us.
I'm not saying don't plan for the future; by any means. As you can tell I know my stuff for the most part (thank you ClosetNerd). All I'm saying is it's all about balance. Enjoy life brother.

 

[Incis0r]

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.

Regarding your first point- I was editing to include my response to that just as you posted this haha. I plan to use the Roth IRA Conversion Ladder to withdraw my tax-advantaged assets before 59.5 penalty-free: http://rootofgood.com/roth-ira-conversion-ladder-early-retirement/

 

[ClosetNerd828]

Sign on bonuses are only tax free if you re-enlist or in an officer's case... Extend you contract (not sure if there is another term) while deployed. When first commission you en paying about 30% of that bonus in taxes.

 

[w4nt2baDDS]

After reading this thread, I'm starting to wonder if I'm in the minority when preferring shorter deployments.

 

[schmoob]

Right. So if I extend my service agreement while in theater, is each year tax free?

 

[schmoob]

Theater = combat zone. Not trying to insult intelligence here, just wasn't sure if you were familiar with the term.

 

[Incis0r]

After reading this thread, I'm starting to wonder if I'm in the minority when preferring shorter deployments.

To each their own- FWIW, I'm fine with longer deployments because I am (and intend to remain for the foreseeable future) a single guy and I'd like the adventure/experience.

I mean seriously, how many dentists in the world can truly say that they have served on the sands of Afghanistan, or on a deck of an Aircraft Carrier? It's SO amazing. You are actually using your dental skills for a national mission. I find that to be a fulfilling thought.

 

[schmoob]

I think 6 months is the sweet spot. Anything less and going home is within sight but never within reach. Anything more and you're just over it. To me, 6 months is enough to come in with the mindset that you're not going home anytime soon, so the time actually goes by faster. It's weird, I know. It's like the next 10 days are just going to DRAG.

 

[ClosetNerd828]

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)

 

[schmoob]

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.

 

[Incis0r]

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.

The opportunity to put even $53K in tax-advantaged accounts is a great deal in and of itself. Thank you for sharing and for doing the extra mile of research for me. I appreciate it.

 

[w4nt2baDDS]

I am (and intend to remain for the foreseeable future) a single guy

You're missing out on the good life

 

[Incis0r]

You're missing out on the good life

Well then you have to promise to enjoy it for both of us

 

[schmoob]

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)

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.

 

[ClosetNerd828]

I'm not sure. But if that is the case no if it wouldn't be tax free because the contract was signed state-side.

 

[krmower]

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.

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 can't comment on the tax free bonuses...I know other MOSs and AOCs talk about it, but I haven't come across a dentist that I was able to validate was able to get the tax free income.

I did max out the TSP in theater, and I went over a calendar year, so I got as much as I could in before December 31, and then as much as I could after January 1.

 

[Hedgy]

So is the MYRB a lump sum bonus? I always thought they spread it out over the year. You would think that with all the docs that have deployed that word would have gotten out that the bonus was tax free if in a war zone. When I we deployed near Bosnia it was still considered a war zone, so we had tax free pay. The enlisted guys would hold off their re-enlistment until we deployed and would get their bonus' tax free. The got to drive around in BMWs and decked out MINI Coupers while I was stuck in my Hyundai.

 

[schmoob]

$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

 

[Incis0r]

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

Thank you! Check your PM. I'll stop hijacking this thread and will message you there.

 

[Agent Doppio]

$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.

Lots of fuzzy math here. 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.

 

[Incis0r]

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.

Well-said. You are making the case to avoid lifestyle inflation.

I'd expand and say that your savings will not only benefit you in early retirement, but will also provide you with the financial security/cushion needed to deal with unexpected life events.

Not sure on the rate of change in co-pays for health insurance trend, however.

 

[gatorfan99]

My take home message is you need to have the "when life give you lemons, make lemonade" personality to be a military dentist. Even deployments, although very hard because of separation can offer enormous opportunities.

I was able to completely pay off all my student loans and car loans and still have a ton left over from mine. Most of that money is still making me money through various CDs, investments, savings, but I was also able to pay for a dream honeymoon that my wife still brags about!

 

[coolslugs]

What is the current deployment length for dental specialists? What is the usual need for each specialty? Do most people still volunteer to deploy?

 

[coolslugs]

What is the current deployment length for dental specialists? What is the usual need for each specialty? Do most people still volunteer to deploy?

Anyone?