Hello,
I just wanted to add my 2 cents about the military pay. I'll admit that at first, I was very (very) skeptical about wanting to do a military residency. But now, I'm quite pleased with it. I won't go into the details of why I think my residency training is pretty strong, but I will give you an idea of how much money you're saving doing a military residency.
I'm sure that many of you, like me, didn't think much about the finance of being a future physician. I'm sure some of you out there think: I'll be making tons of money as a physician and will easily be able to pay off my loans and also have a nice house and be able to provide my children with a private education. If any of you think this naively, then you haven't done the math.
The best thing about being a military doc is that you not only save, but also make pretty good money. (oooh, some of you may be cringing at the word "money" as a bad thing... )
According to my calculations, these are the huge perks:
1)The best thing is that your debt free!! This is so important because imagine having to pay $500/month for 20 years on a $150K loan. You could be using that money to invest in your retirement. Plus, it's going to hurt your credit report preventing you from getting good mortgage loans for buying a house.
2)Another thing that's great is that being in the military with "active duty" status qualifies you to enroll in this bank called "USAA". And without at doubt, this is an awesome bank! The service is superb, you get great advice on how to invest your money (e.g., building your retirement, paying for your children's future college tuitions, getting loans for a home or car, etc...). I can't say enough about this bank. Before, I had Bank of America and was getting ripped off by them on so many service charges.
3)As a resident, you get paid $50,000 which is by far better than any other place. It makes having a family very doable.
4)If you elect to do a one year GMO, you get an upfront bonus of $15,000 plus your salary for that year goes up to $70,000. Total is $85,000 for one year. Think about what you can do with that money (i.e., reinvest it into your retirement account so that it'll help you retire several years earlier than originally planned.).
5)You can take advantage of the military's Commissary and Supermarket Stores which are super cheap and you don't have to pay any taxes.
6)HPSP scholars qualify for the Montgomery GI bill when they become active duty in the military. This means that if you give the goverment $100/month for 12 months (i.e., total $1200), you'll qualify to receive $900/month for 3 years (i.e., total $36,000) in additional fellowship training. For me, I'm planning on doing a non-military (civilian) residency and using the GI bill to give me more income. So when you do the math, that comes out $67,000 for 3 years of fellowship at a civillian program ($55K average of most civillian fellowship programs + $12K GI supplement income).
7)No Malpractice insurance fees. Being in the military, you never have to pay for malpractice. But in the civillian world, malpractice can cost you up to $200,000/year in some specialties. And believe me, there's no way you'd be able to reasonably pay that amount.
8)Health insurance is all covered for you and your family.
9)Life insurance plans are very cheap. I pay $15/month for a $250,000 life insurance.
I can go on and on about all the financial benefits. But I'll stop for now.
My take on being a doctor is this: Yes, we went into this profession to help people and not become a millionaire. But at the same time, we didn't go into this profession to end up being a slave to debt. Nowadays, it doesn't make any sense to be a physician. Medical school is ridiculously overpriced and the huge debts that people get themselves into hurts them financially in the long-run. You need to do the math yourself.
For me, these are the things that I want in my life:
1)Be well-trainined as a physician, have several more publications before finishing residency, making myself marketable by the time I leave the military for a civillian job.
2)Start early in my investments (i.e., Roth IRA and 529K Education fund) so that they're growing at the right pace to allow me to pay for most of my children's college tuitions so that they're not burdened with debt and allow me and my wife to retire by age 65 with a comfortable income.
Being in the military clearly allows me and my family to meet those two objectives stated above and I couldn't be happier.
Last of all, people might be wondering that there's probably a catch to all these great incentives. Well, when you graduate from residency, your salary probably will be a bit lower than someone graduating from civillian program. For example, a starting salary in Pediatrics is about $90,000 to 110,000 in the civillian world. But in the military, it's about $75,000 to 80,000. Some of you may be thinking that the extra money you get from a civillian program is huge. But again, not so. Being in the military, you get FREE health insurance for you and your family and you don't have to pay any Malpractice insurance which is probably $10,000 to 15,000/year for pediatricians. So again, you MAKE more in the military.
