JobChange #HigherPay #PensionDilemma
Considerations for Taking a Slightly Higher Paying Job Over a Better Pension
When faced with the decision of whether to take a slightly higher paying job and leave behind a better pension, there are several factors to consider. Let’s break down the pros and cons to help you make an informed choice.
Understanding Your Current Pension Plan
Before making any decisions, it’s crucial to fully understand your current pension plan. In this case, you have a pension that offers 2.7% per year and allows you to start collecting at age 55. Having been in this pension for 18 years, you likely have a significant amount saved up.
Exploring the New Job Offer
The new position offers approximately $4 more per hour, which can equate to a substantial increase in income over time. However, it’s important to carefully evaluate the new pension plan, which offers 2% at age 62. Consider how this will impact your retirement savings in the long run.
Analyzing the Pension Benefits
One advantage of the new position is the reciprocal system that allows your old pension to use the highest salary earned in the new job. This may potentially boost your overall pension benefits, but it’s essential to crunch the numbers and determine whether the increase in pay outweighs the difference in pension benefits.
Weighing the Financial Impact
When deciding between a higher paying job and a better pension, it’s crucial to consider your financial goals and how each option aligns with your long-term plans. Evaluate how each scenario will affect your retirement savings, benefits, and overall financial well-being.
Seek Professional Advice
If you’re unsure about which option to choose, consider seeking advice from a financial advisor or pension specialist. They can help you evaluate the potential impact of each decision and provide personalized recommendations based on your individual circumstances.
Conclusion
Ultimately, the decision to take a slightly higher paying job and leave a better pension is a personal one that should be carefully considered. Evaluate the potential benefits and drawbacks of each option, and choose the path that aligns with your financial goals and priorities. Remember to seek professional advice if needed to make an informed decision about your future.
I think there are several other questions you need to ask yourself aside from the pay/pension. Which job has better benefits, health insurance, perks, etc.? Where will you have the better work-life balance? Growth opportunities? Which job will you enjoy more? How does the team & management at the new job compare to current job? You’ve been a loyal employee at your current company for 18 years – is there an opportunity to ask for a raise?
At retirement age in your current job you’ll be eligible for a 94.5% pension, I assume based on your salary at retirement or last few years.
If you switch, you’ll have a 48.6% of the old job, and 48% at the new job, but you’ll have worked for another 7 years.
If the current job’s salary is decent enough, I would be hard pressed to pass up on a guaranteed nearly 100% pension at 57. You really don’t need to be doing a ton of other retirement savings in that case. Is an extra $8,320/year worth working 7 more years?
Edit: missed the reciprocity on pension, but the rest still applies
Honestly, **not** worth the move. If you like your current job, the management, the people then stay. The grass is always greener on the other side, but in reality you could be making a huge mistake.
The perks are not that significant to leave a current job that you enjoy, has a good pension and you can retire by 55. Most companies do not do pensions now (only 401k).
But if you dislike your current job then making the switch is the right path.
Brother you’re 38 and been at the same company for 18 years? You’d benefit from moving to a new company that offers better than 3% raises.
$4 more an hour is equivalent to approximately $8,000 a year, is making the move worth it?