Weighing Direct Commission vs civilian possibilities -- concerns about high COL areas, etc

[nhan]

I recently graduated with my PhD and have the opportunity to directly commission in the Navy Medical Service Corps. The career looks good -- I've talked to several active duty officers in my field, and each seemed happy with their jobs. The biggest concerns for me are related to how this will affect my life with my wife and our ability to start a family. Moving regularly and travel/deployment for extended periods will offer cool career opportunities for me but will obviously be very disruptive compared to a civilian job.

When I look at the O3 pay and benefits package, it seems really tough to beat. I would commission as an O3 with zero years of service and 1 dependent (wife who works, no kids yet but want them). This looks like a base pay of $58,188, plus the non-taxable perks and what looks like a sweet healthcare and retirement plan. What I am seeing is a non-taxable housing allowance that would hopefully offset just about all living costs, complete healthcare coverage, good retirement programs, and consistent raises based on time served that would be hard to beat elsewhere. Realistically, coming straight out with my PhD in the civilian world, I can probably earn between $60k-$85k depending on the cost of living in the area. When I factor everything that the military offers, including healthcare for both myself and my wife, it seems like nothing else I'm looking at comes even close.

One of the things I am worried about though is that there are limited duty stations for my career track in the Navy, and some are in high CoL areas -- e.g., San Diego, Honolulu. I've never lived anywhere very expensive, and my wife and I are used to being really low income, so we are kind of averse to big spending. When I consider the possibility of getting stationed somewhere like Hawaii, I'm wondering if that military pay actually holds up enough to make it reasonably livable for us. Our standards aren't super high, but we're hoping to move up a little from "shitty 1br apartment that we could afford on a grad student stipend". So I guess I am looking for some reassurance that the O3 package seems like a good option even if I end up living in high CoL areas.

For whatever it's worth, we are frugal people. We aren't going to be doing anything stupid like buying an expensive car, and we don't have very expensive hobbies or habits -- though it'd be nice to afford some indulgences one of these days. I really just want to make the decision that gives us the best shot of supporting a family as comfortably and responsibly as we can.

 

[smw60135]

@nhan You can search BAH rates by zip code. So I would search the BAH you’d potentially get and then go apartment shopping with that number in mind.

For me, I was stationed in San Diego and had a large family. I had to live about 40 minutes away to find a place with enough bedrooms that was under BAH. I still came out of pocket for utilities.

Other than San Diego, BAH has been mostly the right amount to pay rent and most of the utilities, at least the places I’ve been (never been stationed in Hawaii or San Francisco)

 

[nhan]

@smw60135 Thanks for your input. I meant San Diego in my post, not sure what caused me to write San Francisco. That's one of the more likely duty stations for me so the CoL there is a concern. I've looked at places in the area and it seems possible to get something decent for beneath the BAH, but of course, everything else in San Diego is also insanely expensive so I think it must all eat away at it

 

[haqarshall]

@nhan If you’re interested in serving and want to go a different route than Navy, shoot me a message. You can do the same job in the Army.

 

[p5group]

@nhan I'm an O-3 with 4 years in that lives in San Diego. My wife works, but only part time and we're paying out of pocket to put her through school. We have two dogs and no kids.

Housing- BAH is pretty damn good for those areas, in San Diego as an O-3 with a dependent you'll be looking at around 4500 per month, this will cover rent on a pretty nice apartment. My wife and I are in a 2 bedroom with about 950 square feet and it's 2750 per month. The nice thing is you keep whatever you don't spend with BAH, so that can be used to cover some of the COL expenses. The downside is it won't cover owning a home in a nice area. Single family homes in good San Diego neighborhoods are over a million for like 750 square feet. As long as you're good with renting, I wouldn't worry about housing

Food/purchases - In areas like San Diego and Honolulu, there are good Navy Exchanges and Commissaries that help cut down on the higher grocery expenses. The exchange is Tax free and the one here in San Diego is like a full blown department store. They've got any purchases you need to make (furniture, electronics, home appliances, clothing, etc) and prices are competitive. The commissary is solid, and you'll find food is usually 25-30 percent cheaper at the commissary since it sells at cost. They don't have tax but there's a 5 percent surcharge (and bagger tips but that's another conversation)

Tricare - Tricare is a great program, but navigating it can be difficult. You'll never pay out of pocket and your wife's expenses will be lower than any other possible health care plan. It just takes a while to figure out how to work the system properly

Energy/gas - this is a real kick in the ass. If you have any significant length commute gas costs can start adding up. They've been as low as $4.40 at the NEX gas station, and as high as $6 just since I moved here in June. My wife and I have 1 car and I bike into work to save money in that way. As far as energy prices, San Diego county is the most expensive power in the entire country, and Hawaii is a close second. We live in the city itself so we almost never need AC so our bills stay low. I have coworkers who live inland and use central AC who see power bills over $700 regularly.

Retirement - not something you mentioned, but being able to contribute an extra 23k to retirement every year (with most of it being in a Roth account, is a huge benefit)

Overall point - there's no "gotcha moment" with the military benefit package. The O-3 package is a really good package and you'll see your raises stack up really fast the first few years as well. BAH and commissaries cover some of the COL issues, and in areas where it's really bad they also have Cost of Living Adjustments that can help.

Happy to expand on anything if you have any questions!

 

[nhan]

@p5group Thank you, I really appreciate you taking the time to write this out. Part of my anxiety is simply from never living somewhere like that. The energy, fuel, grocery prices all seem insane. But when I see it laid out like this, it does seem manageable, and in fact it's probably a great opportunity to live in these places I wouldn't otherwise be. I hadn't considered commissaries. And the retirement savings are definitely a huge benefit.

 

[p5group]

@nhan My wife and I don't really drink, but going out for food/drinks is really expensive here. Dinner with no alcohol at a regular restaurant is at least $55-65. Drinks are going to be above $10 for a cheap beer, but it's definitely manageable.

It also depends on any loan payments you have, but if you and your wife are frugal and maintain a budget then I wouldn't fret too much about COA.

I put 25 percent of my paycheck into TSP, we've got about $2300 in loans and school payments each month and we're doing just fine.

 

[newwife87]

@nhan Does your spouse work? If so, do you expect her to contribute to housing?

Also, are you sure you’re coming in at 0 years? I’m not as familiar with direct commissioning so I’d look to verify youre actually coming in at 0.

 

[nhan]

@newwife87 She does work and we share all finances, so she'll contribute to housing and whatever else. She is also early career but should be relatively flexible and potentially remote, We are just unsure what her earnings potential will be or how the moving around will affect her career trajectory. We have discussed it a lot and she is on board with the idea of the military -- largely due to the benefits -- but since her income is an unknown variable I am sort of pretending that we won't have it.

I have never heard anything that suggested I wouldn't come in at zero years, so I just assumed that is the case. I'll look into it but I feel like I would have heard about from someone it if you start higher

 

[newwife87]

@nhan I know you won’t be part of the year group of the year you commission, just not sure if that also counts for pay. Just something I have no idea about and would specifically ask your officer recruiter.

 

[nhan]

@newwife87 Thanks, I wouldn't have thought this. I'll ask my recruiter about it.

 

[blizzardwild]

@nhan I can't speak for San Diego but I can for Hawaii because I spent 4 years there and left there last year. It's expensive but you also get a large housing allowance and a cost of living allowance to offset that. The housing allowance in pretty much all locations will give you more than a shitty 1 br apartment. Benefit-wise, the military is hard to beat.

Keep in mind that joining isn't a life-long commitment. If you're interested and it's something you want to do, do it. But if you find it isn't for you you don't have to stay in for life.