Military to civilian doc--the transition

[ERdoc]

A thread concerning the do's and dont's for the transition from military to a civilian job as a doctor. Encompassing job search, contracts, finances (tsp, disability, life etc), moving (partial vs full dity), housing. Things you did and wished you didn't, didn't and wished you did.  Timeframe. Personal stories, coworker stories.  Whatever to enlighten individuals preparing for this major life event.

My situation:

Married, HPSP 16 months before separation, no kids, no debt, renting, moving to the western US.

Planning on renting initially after move.

[The White Coat Investor]

Super glad I did the full DITY move AND bought the boat just before doing it- the military paid $3000 for me to move my $6000 boat.

Ditched the SGLI. Was glad I rented for a few months.

Kept the TSP, but got my tax-exempt money out to a Roth IRA.

[ERdoc]

May have to look into the boat! Didn't know they paid that much to move it. Good to hear about ditching SGLI.  I was planning on doing the same. Been able to max out the Roth tsp (18k) per year as well as vanguard Roth IRA for my wife and myself. I think that's new in the past few years so you may not have had the option. They are bringing in a tsp match in the near future.

[The White Coat Investor]

ERdoc wrote:

May have to look into the boat! Didn’t know they paid that much to move it. Good to hear about ditching SGLI.  I was planning on doing the same. Been able to max out the Roth tsp (18k) per year as well as vanguard Roth IRA for my wife and myself. I think that’s new in the past few years so you may not have had the option. They are bringing in a tsp match in the near future.

Click to expand...

No, no Roth TSP for me. No match either. Too bad really. It's possible I could pull that money out at a higher marginal rate than I put it in at.

Moving allowances are based on weight and distance. Virginia to Utah is a long way and boats are heavy. Of course, if you go over your moving allowance, it's all on you. It's hard to know how much your stuff weighs until it is already in the truck, but O-4s have a decent amount of allowed weight. I think I got 15,000 lbs and I was under that even with the boat and trailer.

[ERdoc]

As there are many more individuals on the forum than when I first posted this during the first week of the forum, I thought I would see if there would be any more ideas/stories now....

Update: Active Duty, about 7 months out from separation, have a great job lined up, partial dity is the plan, will rent for awhile after moving, still married, still no kids, plan on backdoor Roth this year as well as maxing out Roth TSP before separation, going to be checking into disability insurance shortly.

Any other advice/stories/caution?

[drcolleen]

I'm no shining example and we still own houses outside 2 posts and had 3 kids during the transition so not the same.

Did a partial dity and were over weight - but with a move from MO to ID we couldnt have done it ourselves and maintained sanity, but I did get a moving allowance so it covered the overage.  I dropped SGLI at seperation and had 30yr term lined up for me and husband a few months prior to discharge.  Disability insurance that is portable is part of my contract.  I hope at this point you have a job lined up, that is a great stress relief and licensing, medicare, medicaid, insurance stuff can take a while.  I made the mistake of not really understanding my benefits package i.e. choice of health insurances, FSA, and dependent care account as these were things I didn't have as options in the military so I missed some tax savings that first year but it was a weird tax year anyway. I did as you are suggesting maxing out my TSP prior to separation, my employer didn't start to match until 1 yr, but my 401k is very much outperforming my TSP so I'm not sure if that was wise.  Agree with renting at first --- I'll be the first to admit we aren't great at renting -got pregnant with #4, had 2 dogs, got chickens, wanted our own land/house - so we bought land and built after a year which was sooner than we should have and while I love my job it is no where near family and I now think that was a mistake but we are stuck indefinitely--- you don't mention where you are moving or why, but I can see why many change jobs after 2 yrs.

You don't mention your specialty, and I'm sure there are specialty specific details to the transition that I should have known and didn't.  I'm FP full service - clinic, ER shifts, hospitalist rotations, OB (fellow Fps are my c/s back up), at a critical access hospital.

Good luck with the transition.

[DMFA]

With a name like ERdoc, I've got a wild guess at the specialty...

Why is your 401k so strongly out-performing your TSP? What funds are you holding in it?

Closely review insurance options. You'll probably want an HDHP if your family is mostly healthy in order to qualify for HSA contributions.

A dependent-care FSA gives you the best tax break on child care and stacks with the IRS credit after you use it (just exclude the FSA money when figuring the credit.

Are you going to be employed or an independent contractor...or both? Have you already done IC work while in the military?

I don't know too much about disability insurances at your level, so I'll refrain from commenting on that for fear of being misleading. Be aware that many employer-based policies have holes and lack portability.

[IDinOH]

That EAOS date was definitely one of my happiest moments.  I felt a significant sense of calm as I made the move from navy to civilian life as the anxiety about the next set of orders, etc goes away and you have so much more control over you and your family's life.

I got my employer to pay for the move. They were waaaay easier to deal with than the DoD. Keep the TSP. Fees are rock bottom and there's nothing like the G fund out there. You will find as your portfolio grows your tsp will be essentially all G fund if you utilize the best options in each type of account to reach your desire allocation. If you have roth money and traditional money in there, they won't let you get just the roth money out as withdrawals are proportional to balance in each.  Rent for awhile. Taxes are way higher than you'll estimate.  I was shocked when my much higher civilian pay resulted in not a huge take home bump compared to my navy pay after taxes, insurance, dental, vision, FSA, 403b/457 were taken out. Once you have a better sense of what your finances will be like and you know you'll stick around, then consider buying. Ditch SGLI, but get good life and disability insurance as soon as you can. The only other thing I can say is that even with a retirement account at work and doing a backdoor roth, you're likely also going to have to fund an after tax account to reach a reasonable savings % on an attending's salary. Make sure you can reach and sustain that percentage before buying a house.  We had some initial "mission creep" on the house front and ended up with more house than we should have...luckily pay increased significantly to offset and all is well. Good luck man.  Read the WCI book, check in on this forum and the bogleheads forum, ask questions as they come up.  I have found the people on these forums to be incredibly kind and generous with their knowledge and experience.

 

[ERdoc]

Thanks Drcolleen, DMFA, and IDinOH for the advice. I do indeed work in the ER.

-planning on dropping SGLI as I already have term life insurance through USAA and can get the same amount as the SGLI once I separate. Doesn't seem to be a difficult transition.

-moving back to Montana where all my family lives. It has been where my wife and I have wanted to get back to for years.

-Will be employed by the hospital. There will be options for IC but not sure how much interest I will have initially.

-I have the same issue with no match for a year and it will be a strange tax year.

-the HDHP seems to be the most challenging to nail down, but i will get an answer. Definitely want to try and do that.

-for disability insurance I will paying close attention and will be looking at various options.

-tsp is all Roth, and will be transitioning to the G fund as you mention.

-the lifestyle creep especially with house/property seems to be one of my biggest concerns of the transition. Fortunately for me my wife is cheap like me and completely on board with renting for 1-2 years or longer as need be.

We are excited for the transition and being closer to family. Thank you for the advice!

[drcolleen]

(ok, so reading and replying to posts late at night blinds me to some details, like the screen name of the poster.....  )