Think leaving the military is a good financial decision? Think again... (you could be wrong)

[gatorfan99]

Check out this outstanding White Coat Investor article:

http://whitecoatinvestor.com/should...inancial-implications-of-military-separation/

This article is geared towards physicians, but I think it's very relevant for us dentists as well..

Bottom line: we have a great gig, amazing healthcare and incredible retirement in the service.. (we'll see what happens when they change the retirement system)

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[BobbyBeavis]

Check out this outstanding White Coat Investor article:

http://whitecoatinvestor.com/should...inancial-implications-of-military-separation/

This article is geared towards physicians, but I think it's very relevant for us dentists as well..

Bottom line: we have a great gig, amazing healthcare and incredible retirement in the service.. (we'll see what happens when they change the retirement system)

When will the new retirement system become active? I know I was grandfather'd in, but just curious for newcomers.

 

[Incis0r]

Check out this outstanding White Coat Investor article:

http://whitecoatinvestor.com/should...inancial-implications-of-military-separation/

This article is geared towards physicians, but I think it's very relevant for us dentists as well..

Bottom line: we have a great gig, amazing healthcare and incredible retirement in the service.. (we'll see what happens when they change the retirement system)

110% agreed. Also, how many other civilian dentist jobs afford you the opportunity to treat our troops, or to live overseas, or to practice without worrying about selling treatment, or to attend residencies which (as many current military dentists tell me) are world-class.

When will the new retirement system become active? I know I was grandfather'd in, but just curious for newcomers.

It's mandatory for anyone joining on/after Jan. 1, 2018, but current service-members are eligible to switch to it.

The new retirement system is still a great deal.
Pension with 40% of base pay (instead of 50%) effective immediately upon completion of 20 yrs Active Duty. You still get the healthcare and other retirement discounts like Space A travel, etc.

It also includes automatic matching into the TSP.

 

[BobbyBeavis]

110% agreed. Also, how many other civilian dentist jobs afford you the opportunity to treat our troops, or to live overseas, or to practice without worrying about selling treatment, or to attend residencies which (as many current military dentists tell me) are world-class.



It's mandatory for anyone joining on/after Jan. 1, 2018, but current service-members are eligible to switch to it.

The new retirement system is still a great deal.
Pension with 40% of base pay (instead of 50%) effective immediately upon completion of 20 yrs Active Duty. You still get the healthcare and other retirement discounts like Space A travel, etc.

It also includes automatic matching into the TSP.

Thanks for the info. I have read that each "good" year of Active Duty is 2.5% towards the retirement pay, which is why at 20 years it is 50%. I assume we would be offered some sort of incentive pay to stay past that 20 year mark. I think as of now I'd want to take it, but we'll see how I feel after 20 years serving

 

[tbiv21]

Thanks for the info. I have read that each "good" year of Active Duty is 2.5% towards the retirement pay, which is why at 20 years it is 50%. I assume we would be offered some sort of incentive pay to stay past that 20 year mark. I think as of now I'd want to take it, but we'll see how I feel after 20 years serving

Yeah, the 2.5% is going to 2% per year. I got notified that I will get to choose even though I don't go active duty until 2019. The new system pays 1.5% of your pay for the first two years in service then will match up to 5% after your first two years. You can contribute more the first two years, but it isn't matched. It's nice for those who expect to get out when their obligation is up because at least they get something towards retirement.

Sent from my FRD-L04 using SDN mobile

 

[distressstudent]

In estimating projections for military dentists, I find this to be quite useful too



Certainly a lot of uncertainty. With changes to retirement plan and discussion about increasing tax burden of service members.

 

[agent2362]

My own 2 cents. It might be worth it to stay in (meaning a comparable lifestyle and income), but ONLY if you do the bravo residency which is relatively short (2 yrs) and then qualify for retention bonuses thereafter. If you remain a 63A or become a high paying specialist like ortho, OMS or endo, then I have a hard time seeing how staying in the military is the smart move from a financial standpoint, unless you started residency later such as major and only had 4-5 years before hitting 20 years. Ultimately you stay in because of your desire to serve country and ability to tolerate the army lifestyle/ have some decent PCS options.

The new retirement system is less desirable IMO because you have contribute out of your own pocket for the first time to get back to the same baseline of 50% retirement. I actually think the Roth IRA increased level of 17.5K annual contribution is one of the greatest benefits that most do not take advantage of. Staying in the military makes sense to me if you are the type of person who spends their entire paycheck and would never save for retirement regardless of whether you make 1-200K in the military or 350K+ as a civilian specialist, then yes you should stay in the military.

 

[Incis0r]

I actually think the Roth IRA increased level of 17.5K annual contribution is one of the greatest benefits that most do not take advantage of.

Where do you see this? I was under the impression that the limit was $5,500/yr (more if you are over the age of 50).

 

[Helpful Troll]

Where do you see this? I was under the impression that the limit was $5,500/yr (more if you are over the age of 50).

https://www.tsp.gov/PlanParticipation/EligibilityAndContributions/contributionLimits.html

 

[Incis0r]

https://www.tsp.gov/PlanParticipation/EligibilityAndContributions/contributionLimits.html

That's for Traditional and Roth TSP though. Poster above me was referring to Roth IRAs. If the Roth IRA limit has also been raised to $17.5K/yr, then that's a HUGE benefit and one that I intend to pounce upon the moment I get a chance to do so.

 

[Crusty Navy Guy]

That's for Traditional and Roth TSP though. Poster above me was referring to Roth IRAs. If the Roth IRA limit has also been raised to $17.5K/yr, then that's a HUGE benefit and one that I intend to pounce upon the moment I get a chance to do so.

Roth TSP and Roth IRA - two totally different beasts.

 

[gatorfan99]

Roth TSP and Roth IRA - two totally different beasts.

Yes, they are. Definitely would be awesome if you can pull off taking advantage of both..