Stipend

This forum made possible through the generous support of SDN members, donors, and sponsors. Thank you.
orbitsurgMD said:
So what are we to assume other than that the pension alone is not enough for a retirement. Adding to that retirement by having to establish a second career is what is necessary. Nothing is stopping the military doctor from investing his savings except that he has less income from which to accrue those savings. Also, despite available TSP, the private doctor still has available more options to save money in a tax-deferred status, and of course more money with which to make those investments in the first place.

O-5 pay might make an adequate retirement income, but that isn't what you get. The maximum you can receive is 75% of the base pay for that rank, and that comes after 30 years service. In the post-DOPMA career world, you are fairly late-career to draw that. There wouldn't be much time for second careers with accrual of invested savings to speak of.

A military career will not equal the income or retirement savings potential of a private career in medicine.
Click to expand...


Do you invest your money? A person who makes $40 K a year have a million dollar or more 401 K easy by retirement depending on when they start investing.

The military doctor has more than enough income to invest in a 401 K and live very, very comfortably. I'm not sure how much money you think is needed, but from your arguments it seems that it's never enough.

You can live on a military pension. You get all that money for doing absolutely nothing and investing nothing out of your own pocket. Besides that, if you do invest money out of your own pocket, you're going to have a large income in your retirement. And yes a military career will since you have a baseline that is higher than the private sector with the pension.

The average private sector doctor is going to invest $100 K or more a year towards their 401 K.
Members don't see this ad.
 
Maldini said:
The average private sector doctor is going to invest $100 K or more a year towards their 401 K.
Click to expand...

Where do get this information from? Very few primary care docs will make enough money to even think about setting aside $100,000 each year. Some of the specialists can, in theory, invest that amount, but the overall feeling is that physicians are horrible with money. I would challenge any statement that claims that the majority of doctors are saving large sums of money toward retirement.
 
deuist said:
Where do get this information from? Very few primary care docs will make enough money to even think about setting aside $100,000 each year. Some of the specialists can, in theory, invest that amount, but the overall feeling is that physicians are horrible with money. I would challenge any statement that claims that the majority of doctors are saving large sums of money toward retirement.
Click to expand...

That's precisely the point that I'm trying to make. For a primary care doc, milmed as a career may make sense, as compensation levels tend to be more in line with what one could make in the civilian sector. Additionally, the military pension plus whatever can be saved into an IRA or comparable savings device could make for a nice retirement package that's certainly comparable to a civilian career.

On the other hand, if as a specialist physician I can make 300K plus per year (after practice associated expenses such as malpractice insurance, etc.), I will certainly have a tremendous potential pool of retirement savings that will far outstrip anything I could possibly save as a military doc making a little over 100K. It wouldn't take me long, if saving appropriately, to invest enough to overwhelm the retirement pay of a senior officer. So where's the incentive to stay in?

Now I realize the original poster's point was that physicians as a group don't save for retirement. That's fine, but it's not a reason for me as an individual to have a twenty year military career. Add in all of the difficulties that have been expressed over and over again on this board that are a part of military medicine and it's difficult to see an incentive.
 
Members don't see this ad :)
Maldini said:
Do you invest your money? A person who makes $40 K a year have a million dollar or more 401 K easy by retirement depending on when they start investing.

The military doctor has more than enough income to invest in a 401 K and live very, very comfortably. I'm not sure how much money you think is needed, but from your arguments it seems that it's never enough.

You can live on a military pension. You get all that money for doing absolutely nothing and investing nothing out of your own pocket. Besides that, if you do invest money out of your own pocket, you're going to have a large income in your retirement. And yes a military career will since you have a baseline that is higher than the private sector with the pension.

The average private sector doctor is going to invest $100 K or more a year towards their 401 K.
Click to expand...

I don't really understand your point. You seem to be saying that after a certain level of income you've got "enough" and shouldn't want any more. I'm certainly able to live on a much smaller amount of money than we're discussing here. I don't need 100K per year to take care of basic necessities of life. Still, I'm certainly not a bad person for wanting to make as much as I possibly can for my efforts. If military medicine offered more, or even equivalent, advantages when compared to a civilian career, it would be attractive to me, but I can't see how having no control over my area of practice, the staff with whom I work, or those who tell me what to do is possibly an incentive, particularly as I become an older physician.
 
Maldini said:
A person who makes $40 K a year have a million dollar or more 401 K easy by retirement depending on when they start investing.
Click to expand...

Working how long? Investing how much? A person investing the maximum allowable for a 401K deferral on an income of $40K would have to have an extraordinary employer matching scheme and a supra-normal long-term rate of return to get $1M at 65 years of age.


Maldini said:
The military doctor has more than enough income to invest in a 401 K and live very, very comfortably. I'm not sure how much money you think is needed, but from your arguments it seems that it's never enough. . . . You can live on a military pension.
Click to expand...

Live where? Do what in retirement? I think most physicians would not find the retirement pay of a medical officer to be satisfactory or sufficient in retirement.


Maldini said:
You get all that money for doing absolutely nothing and investing nothing out of your own pocket.
Click to expand...

You think working for twenty or more years is "doing absolutely nothing" then? The military retirement in that way is no different from any other defined-benefit pension plan. You could get the same or better from the VA.


Maldini said:
Besides that, if you do invest money out of your own pocket, you're going to have a large income in your retirement. And yes a military career will since you have a baseline that is higher than the private sector with the pension.
Click to expand...

Since there is less net personal income, explain how this is true. Explain how the military beats a Keogh or other self-employed plan in a diversified investment plan. I don't believe you.

Maldini said:
The average private sector doctor is going to invest $100 K or more a year towards their 401 K.
Click to expand...

How do you know that? There is a legal ceiling to 401K contributions, well below $100K I might add. But you can make other tax-advantaged investments.

For the post-DOPMA physician in a better-paying specialty, staying in the military is not in your best interests.

So exactly what do you do Maldini? Are you a recruiter? Because you don't seem to know much about military medicine.
 
Maldini said:
You can live on a military pension.
:laugh:

I'm guessing you're young and single. I do retirement physicals 2-5 times a week on E-6 through O-6; I always ask and I never hear "I'm going to kick back and live on my pension" You can support yourself, but no one else on a 20 year military pension. The health care is not free, Tricare for retirees has an annual premium and it will likely increase ( they tried this year and failed) as military medicine becomes even more cash-strapped.

I have no real complaints about my pay. I do have a problem with the Navy marketing the pay as comparable to civilian counterparts.
Click to expand...
Click to expand...
 
FYI:
This was sent to all MED Recruiters by the Director, Officer Indoctrination School Programs, Commander Navy Recruiting Command (Code N34)

A $20K bonus is funded for 2 year HPSP, FY09 graduate, MC and DC HPSP accessions. The current breakout for the number of available bonuses is as follows:

(20 bonuses available) MC 2yr HPSP FY09 graduates only
(5 bonuses available) DC 2yr HPSP FY09 graduates only

Acceptance of the $20,000 bonus will require a 4yr minimum service obligation. This obligation is pursuant to total active duty time and is irrespective of training status (internship year counts towards obligation).

Obligations incurred from other sources are not affected by this bonus and this obligation may be served concurrently with other obligations.

$20K funding for 3 and 4 year HPSP is still being worked by CNP.
 
Roshario said:
FYI:
This was sent to all MED Recruiters by the Director, Officer Indoctrination School Programs, Commander Navy Recruiting Command (Code N34)

A $20K bonus is funded for 2 year HPSP, FY09 graduate, MC and DC HPSP accessions. The current breakout for the number of available bonuses is as follows:

(20 bonuses available) MC 2yr HPSP FY09 graduates only
(5 bonuses available) DC 2yr HPSP FY09 graduates only

Acceptance of the $20,000 bonus will require a 4yr minimum service obligation. This obligation is pursuant to total active duty time and is irrespective of training status (internship year counts towards obligation).

Obligations incurred from other sources are not affected by this bonus and this obligation may be served concurrently with other obligations.

$20K funding for 3 and 4 year HPSP is still being worked by CNP.
Click to expand...


Not a very generous deal for an additional year of obligated active duty service, especially when there is a very high probability you will spend that year out as a GMO and not in training. Remember also that these recipients are already bearing half the tuition and expense costs of a 4-year medical school degree, many on loans (which having been taken in the first two years of medical school capitalize accrued interest during the last two years of medical school). All-in-all, the Navy is getting those years at less than ten cents on the dollar, especially when you consider loan interest repayment and the loss in income trading a pre-training year as a GMO for a post-training year as a BC/BE specialist, even one in a relatively lower-paying field.

Good deal for them.
 
Roshario said:
FYI:
A $20K bonus is funded for 2 year HPSP, FY09 graduate, MC and DC HPSP accessions. The current breakout for the number of available bonuses is as follows:
Acceptance of the $20,000 bonus will require a 4yr minimum service obligation. This obligation is pursuant to total active duty time and is irrespective of training status (internship year counts towards obligation).

Obligations incurred from other sources are not affected by this bonus and this obligation may be served concurrently with other obligations.

$20K funding for 3 and 4 year HPSP is still being worked by CNP.
Click to expand...

I can't understand why in the world anyone would accept this offer. If you were on a four year scholarship it would be fine, since according to the document you can serve this commitment concurrently with your standard four year hitch, but if you're a three or two year HPSP student, you'd basically be giving yourself another year of active duty for twenty grand. What's the point of that? I can't see anyone being likely to accept the HPSP because of this. On the other hand, if they funded the stipend increase to 30K a year, which would cover living expenses for most of us quite handily, it would make a big difference. Right now when people ask me about the HPSP, I have to be honest and tell them that financially while in med school it doesn't work out well at all.
 
basicscikills said:
I can't understand why in the world anyone would accept this offer. If you were on a four year scholarship it would be fine, since according to the document you can serve this commitment concurrently with your standard four year hitch, but if you're a three or two year HPSP student, you'd basically be giving yourself another year of active duty for twenty grand. What's the point of that? I can't see anyone being likely to accept the HPSP because of this. On the other hand, if they funded the stipend increase to 30K a year, which would cover living expenses for most of us quite handily, it would make a big difference. Right now when people ask me about the HPSP, I have to be honest and tell them that financially while in med school it doesn't work out well at all.
Click to expand...

Not completely true. With a mimimum service obligation(MSO) if you do go straight through say FP/IM/PEDs on active duty you would be paying off the MSO while in residency and only have a 2 year training obligation once residency is done.

As far as the stipend increase, that will require Congress or DoD to fork over a ton more money. (4,000 HPSP students(all services and corps) x $15K raise = $60 milion)
 
NavyFP said:
As far as the stipend increase, that will require Congress or DoD to fork over a ton more money. (4,000 HPSP students(all services and corps) x $15K raise = $60 milion)
Click to expand...

C'mon, you're just baiting me into it. Argh...ok, I'll play ball:

Based on the total cost divided by the time we've been there, that's about 6 hours of our time in Iraq. I assume you all would have accepted delaying our attack for that long. :D
 
All good information...and great dreams. But look back at the ast postings of where the stipend and bonus went. None of us are getting a bonus for a very long time. But I guess we can all keep hoping and trying to pay the rent that cost more than our stipends.

http://www.military.com/opinion/0,15202,119115,00.html
 
jmspilka said:
All good information...and great dreams. But look back at the ast postings of where the stipend and bonus went. None of us are getting a bonus for a very long time. But I guess we can all keep hoping and trying to pay the rent that cost more than our stipends.

http://www.military.com/opinion/0,15202,119115,00.html
Click to expand...

The bonus is available for some people specific people who are signing up for a 2 year HPSP as I posted earlier. It's been FUNDED not just authorized. That article you're referring to is basically saying that stipend increase is authorized but not funded but this bonus is not addressed in the article and the information was sent out after that article. For most of us, the bonus is not or will not be available since people are already enrolled in the HPSP program or the 3/ 4 yr HPSP bonus will funded after we're in the program.
 
Members don't see this ad :)
Roshario said:
The bonus is available for some people specific people who are signing up for a 2 year HPSP as I posted earlier. It's been FUNDED not just authorized. That article you're referring to is basically saying that stipend increase is authorized but not funded but this bonus is not addressed in the article and the information was sent out after that article. For most of us, the bonus is not or will not be available since people are already enrolled in the HPSP program or the 3/ 4 yr HPSP bonus will funded after we're in the program.
Click to expand...

That is correct, and it is Navy only at this time. Army and AF have not funded a signing bonus for anyone.
 
The Navy having the money for signing bonuses isn't surprising. After all, it seems nobody is taking their 4-year scholarships so they should have plenty of money leftover to fund bonuses. :D

I always was torn between Army and Navy. Still not sure I made the best decision, but I guess it's too late now. Maybe after my Army payback I'll do some time in the Navy.
 
Maldini said:
Do you invest your money? A person who makes $40 K a year have a million dollar or more 401 K easy by retirement depending on when they start investing.

The military doctor has more than enough income to invest in a 401 K and live very, very comfortably. I'm not sure how much money you think is needed, but from your arguments it seems that it's never enough.

You can live on a military pension. You get all that money for doing absolutely nothing and investing nothing out of your own pocket. Besides that, if you do invest money out of your own pocket, you're going to have a large income in your retirement. And yes a military career will since you have a baseline that is higher than the private sector with the pension.

The average private sector doctor is going to invest $100 K or more a year towards their 401 K.
Click to expand...

The lack of financial literacy exhibited in this post is frightening. I'm going to give him the benefit of the doubt and assume he's had his nose buried in a chemistry book, and never really took the time to run the numbers.

First of all, the maximum allowable limit for a 401K is lower than $100K. A LOT LOWER. Try $15K on for size. I will say, it doesn't take a huge annual contribution to finish up with a seven digit account balance, approximately $6K a year.

All that being said, however, a mill might sound like a lot when you're living on ramen and Mountain Dew at State U, but it doesn't buy you a whole hell of a lot on the outside. Figure with prevailing rates of return, you could resonably expect around 5% of cashflow without eating into your principal. Are you really excited to have $110K a year (military pension plus 401K proceeds) to live on in your retirement? Before taxes? Unadjusted for inflation, at that? If so, you must REALLY like that ramen and Dew!

You guys should try not to lend credence to the conventional wisdom that doctors make the worst business people! :D
 
On my Sept 16th payment I got paid $750. That is $100 more than I get usually biweekly. Any ideas?
 
-Bump-

How much take-home pay can I expect with the recent increase to 1905 per month for HPSP?

I don't begin receiving the stipend until class starts next months (prob 1 September for a August 18 start, right?).

I had budgeted that I would have 1500 take-home... is that an under-estimation?
 
MaximusD said:
-Bump-

How much take-home pay can I expect with the recent increase to 1905 per month for HPSP?

I don't begin receiving the stipend until class starts next months (prob 1 September for a August 18 start, right?).

I had budgeted that I would have 1500 take-home... is that an under-estimation?
Click to expand...

Yes, I think you are estimating too low, there. I have a friend who is getting close to the full amount minus a few dollars of taxes taken out from each bimonthly payment; it was something like $947, per paycheck, or thereabouts.
 
Last edited:
Quick question. I was commissioned in the Army in April and am still not verified on the MODS site. I was wondering if any of you guys had this problem before beginning school. I know stipends are not paid out until I am verified, but I was wondering how to handle rent etc when the time comes in a couple of weeks.
 
No, I understand I do not get any entitlements/tuition until I start school. However, I start in a couple weeks and am still not verified through MODS which is required in order to start receiving the entitlements (at least what I was told on the phone). What I was wondering was if anyone was not verified until after school started and for how long. When I called, I was told my paperwork is still waiting to arrive at their office and I may not get verified until after school starts. I ask this question because I have a feeling it may be a while before I get verified (I have no clue why) and I am trying to figure out if I should take out a loan to cover rent and other living expenses, especially if it is a couple of months before anything happens.
 
MaximusD said:
could anyone currently getting the new pay (based on 1907/mo pretax) let me know what each direct deposit amount is after taxes are withheld?

Thanks.
Click to expand...

As I mentioned above, the person I know is getting $947 per paycheck, of which there are two a month. This is after taxes. You get paid on the 1st and the 15th of each month and your first stipend paycheck is on whichever date is later relative to your official school start date. For example, classes start on the 4th of Aug for me, so I'll see my first paycheck on the 15th.
 
Just got my first paycheck with the new stipend amount and my take home after taxes was $899. Hefty state taxes where I live so you should get more than that. Hope this helps.
 
MaximusD said:
could anyone currently getting the new pay (based on 1907/mo pretax) let me know what each direct deposit amount is after taxes are withheld?

Thanks.
Click to expand...


It's going to depend on where you live. It is easy to calculate state and local income taxes (usually flat rates). Then figure out your tax obligations to the IRS based on [(taxable income)=(total income)-(deductions)]...as a student you are probably taking the standard deduction and maybe an exemption depending on whether someone can declare you as a dependent or not. (This computes your effective tax rate, not how much they actually withhold which is a function of how you filled out your W4). If they are taking out FICA, then subtract out another 7.65%.

What someone else is getting paid after deductions could be significantly different than what you are paid due to differences in how they filled out their W4 and what the state and local tax rates are, so simply asking others "how much did you get?" may give you an inaccurate picture of what you will get.
 
flynnt said:
It's going to depend on where you live. It is easy to calculate state and local income taxes (usually flat rates). Then figure out your tax obligations to the IRS based on [(taxable income)=(total income)-(deductions)]...as a student you are probably taking the standard deduction and maybe an exemption depending on whether someone can declare you as a dependent or not. (This computes your effective tax rate, not how much they actually withhold which is a function of how you filled out your W4). If they are taking out FICA, then subtract out another 7.65%.

What someone else is getting paid after deductions could be significantly different than what you are paid due to differences in how they filled out their W4 and what the state and local tax rates are, so simply asking others "how much did you get?" may give you an inaccurate picture of what you will get.
Click to expand...

Right. I live in a state with no state income tax and now get ~$850 per pay period after taxes. Thats a bump from ~$720. So obviously, it varies quite a bit based on your state and deductions. I suspect the people getting $900-$950 per month "after taxes" are going to be in for quite a shock when the IRS comes a callin' in April.
 
are tax deductions based on where you live (are going to school) or your home of record?
 
spicedmanna said:
As I mentioned above, the person I know is getting $947 per paycheck, of which there are two a month. This is after taxes. You get paid on the 1st and the 15th of each month and your first stipend paycheck is on whichever date is later relative to your official school start date. For example, classes start on the 4th of Aug for me, so I'll see my first paycheck on the 15th.
Click to expand...

Life sucks, 18 August for us... which mean sI won't get my first stipend check until 1 September.... blah.

I calculated based on 10% federal income and 3.07% PA state tax and PCOMers take home no more than 850 per 2 weeks.
 
LauraDO said:
are tax deductions based on where you live (are going to school) or your home of record?
Click to expand...

Home of record. If you are a resident of say, Texas (no state income tax) and go to school in say New York (major state income tax) you would not pay state income tax.

that being said, if you find out what the stipulations are for the state you are going to school in (or stationed in), it is often possible to change your permanent residence / home of record to that state (e.g., Florida with no income tax). Check with any local Jag office from any service and they will know the rules.
 
Tired said:
Home of record and State of Residency are two different things.

State of Residency (military version, you fill out the form at PSD) is the only one that impacts your taxes. Home of Record is just where they ship you stuff when you get out of the military, or where they send your body if you die on active duty.

For most people, esp early after going active duty, they are the same. But not always (I changed my state of residency as fast as possible after starting internship).

Remember:
Home of Record = can never be changed
State of Residency = can be changed
Click to expand...
How do we change State of residency for HPSP Army? Is that done on the MOD's Web site? Also would I be charged less taxes if my state of residency is PA rather than NY?
 
Tired said:
More info on the procedure can be found here: http://usmilitary.about.com/cs/militarylaw1/a/homeofrecord.htm

I do not know if there is any difference between doing it on HPSP or active duty, although I doubt it.

I don't know what state taxes look like in PA, but I know several physicians who kept their NY residency, since you do not pay state taxes on your active duty income if you are stationed in another state as long as you are a NY state resident. Look carefully at things like this before you change your residency.
Click to expand...
I won't be on active duty, I'll be in School. So I would like to lower my tax burden
 
NavyFP said:
Not to burst your bubblehead, but I think it is $1907. :D I know, what's a buck?
Click to expand...

You are correct, sir! Fortunately for me, that was just a typo - that would have been devastating if I had actually thought I was getting $1908, only to learn that I would have one less dollar to put food on my son's plate! :p
 
Bubblehead-to-MD said:
You are correct, sir! Fortunately for me, that was just a typo - that would have been devastating if I had actually thought I was getting $1908, only to learn that I would have one less dollar to put food on my son's plate! :p
Click to expand...

What, it is only 1907!!! I was really counting on that extra dollar! I guess I'll have to cut out the vacation to Tahiti now, damn:scared:
 
LauraDO said:
What, it is only 1907!!! I was really counting on that extra dollar! I guess I'll have to cut out the vacation to Tahiti now, damn:scared:
Click to expand...

Or go with the monokini vice bikini.
 
I was going to apologize for my slip-up causing a loss of a Tahiti vacation...but since it has resulted in the use of a monokini in place of a bikini instead...:thumbup:
 
^^ i heard a rumor that the Navy was phasing out the Tropical White Uniform in favor of a digital-print banana hammock :+D
 
TheGoose said:
^^ i heard a rumor that the Navy was phasing out the Tropical White Uniform in favor of a digital-print banana hammock :+D
Click to expand...

I can see the picture displayed in the new Uniform Regulations...

Classic Chief Petty Officer with cheesy moustache sporting a digital-print urban style banana hammock.
 
You must log in or register to reply here.
Next unread thread

Similar threads

D
2020 HPSP Stipend
Replies
0
Views
2K
darknessicegoat
D
D
Army Stipend pay after commissioning
Replies
1
Views
1K
DMBandFan86
DMBandFan86
Future15D.O.
MDSSP stipend pay
Replies
2
Views
767
Future15D.O.
Future15D.O.
M
Active Duty Pay vs Monthly Stipend
Replies
19
Views
2K
Iux
Iux
Iux
Air Force HPSP Monthly Stipend After Taxes
Replies
0
Views
861
Iux
Iux
Top