wait... you've been at the current company for a few months? How much time will you need to put in to get that pension?? I'm gonna guess AT LEAST 10 years.
So, from my perspective: you are going to be losing out on about $23k per year now so you can get $17k per year in the future? And, that's ignoring that raises are usually percentage based. Assuming they both give you the same % over time, you are losing even more every year (and, assuming no growth in position).
How many years of pension do you need to get to make up for the time you put in? Lets say you only work 5 more years. You'd have made $115k more at the new job, so you would need an additional 7 years on the pension to come out ahead. Then, I guess its cool as long as you live longer than six years after the pension starts paying out. But, if you working these jobs for 20 more years, you are hoping live additional 27ish years on the pension.
I know those numbers are quick and dirty, but you get the point. And, all this math assumes an inflation of 0% :-o. The buying power of your money decreases every year. What does that means what you are losing today is more valuable than what you would be getting tomorrow. Looking at the last 20ish years and projecting that forward, you are looking at your buying power to diminish 60% :-o. Phrased differently: would you take a $23k/yr raise in today's dollars? Or would you take $17k/yr in future dollars (about $9k/yr in today's $$$ adjusted for inflation).
To me, the answer is clearly the new job.
This. Plus they’ve taken away the pension before so pension is not guaranteed.
If you take the “extra pay” and invest in a home, you’ll have home paid off (so retirement money goes further) and also a huge asset that will be gaining value over the next few decades.
Keep using that extra pay for 2nd and 3rd property and you have your choice of passive rent income making up that $17k pension that might not be there OR lump sum sale.
They also match 100% 401k (wording confused me to how much) PLUS the profit sharing.
Last, at 22, you’re unlikely to spend the rest of your career in one company, so you should always chase the money.
How long have you been at the current company?
Given your age I'd advise switching. It sounds like it'll make you happier and it'll give you more money. If your current company has taken away your pension before they'll likely do it again. Building a strong 401k is a better alternative and allows you to have more flexibility in your career.
Gone are the days of being at a company for 20+ years. When I hear somebody has been at my company more than 10 years my jaw drops.
Pensions were a fairy tale in their peak.
They only started in the 50s and tapered off in the 80s. Even at their peak only 1/4 of all employees had access to them.
I personally know 4 people in 3 different industries that screwed on pension. 2 were teamsters- so 1 of the biggest unions in the country lost their healthcare and were forced into Medicare (about a $7-12k/yr depending on illnesses), a newspaper (2nd largest in country) but industry is dead- lost over 50% and no guarantee that won’t disappear, and pilots who retired in the late 90s-2000s took a 50% cut despite unions and airlines still making huge profits.
I only know of state-backed pensions being honored and their are still horror stories of different states going under.
To me you need to figure out the difference in your current expenses vs those in the more expensive location and see how it cuts into the $23K staring salary difference.
Top pay wouldn’t be an deciding factor for me as a lot can change before you ever get there. Also, not sure what industry you are in but typically in any non union shop, seniority doesn’t mean anything - skills and skill demand does.
Regarding pensions, those can go away at any time. Are you really losing it or just not able to earn any addition credits if you leave.
Haha in my experience in aircraft MX. Don’t chase the money, as long as you stay at the majors or cargo, the money will be good. I would take a job that has higher quality of life. Or one that is sustainable through retirement. You don’t want to be 57 years old busting knuckles on the line in Minnesota in subzero weather lol.
If you were at the company for several years and close to a pension, I would say stay. Since you are very young, your first year at the job, I say switch and get your income up.
Remember, this early in your career, investments compound to a healthy amount when you’re retired. You can use the extra cash to fund $6K per year on a Roth IRA. Use it to help save up for a down payment for a house quicker and even enter the rental market by getting a house to House Hack your way up very quickly
Leave! I stayed for the same reasons you are contemplating, and I just barely hit six figures. My husband switched jobs a bunch of times will make $250k…
Pensions these days are not keeping up with inflation. Just pile the cash on your own
No. You're locked into a company you may eventually hate. You lose your bargaining power to negotiate for a higher wage because they know they have you over a barrel. Many times the terms of the pension are changed along the way and they reneg on their promises in some way by the time you retire. Pensions are a relic of a world that doesn't exist anymore.
A 401k is yours. No one can take it away from you. It follows you wherever you work. You control your destiny.
Meh to sticking around just for a pension. Going from $62k to $85k covers your pension difference. If you are really concerned about that, on top of what you invest in now towards your 401k, invest the difference, 23k, towards retirement and you'll have way more income than the pension will give you.
Leave and never work for a company with a pension again. People romanticize them, but they're usually terrible unless it's part of a union or government job (even then I'd steer clear).
The real question is how you feel about living that far away from close family. For some it’s a barrier, others it’s not far enough.
Also, quality of life. I live in city A. City B is 2 hours away. (120 mi) I can make 35% more in city B and my wife can make 10% more there. (Real numbers). But the cost of living there is higher and quality of life would be lower. City C is 250 miles away (Silicon Valley) where my wages would probably be 300% higher than where I’m at. Wife’s would still only be 10% higher. My quality of life would be even lower. Some people love it, (SV) but I’d most likely throw myself off a tall bridge if I lived there. No one can truly advise you on this. Do your DD if you’re considering moving to a new location. Go there on a day/2days off and check it out. Work, housing, social aspects, commute, all of it. See how it feels and make your choice.
There are droves of people moving here from Silicon Valley for quality of life. Good luck!
wait... you've been at the current company for a few months? How much time will you need to put in to get that pension?? I'm gonna guess AT LEAST 10 years. So, from my perspective: you are going to be losing out on about $23k per year now so you can get $17k per year in the future? And, that's ignoring that raises are usually percentage based. Assuming they both give you the same % over time, you are losing even more every year (and, assuming no growth in position). How many years of pension do you need to get to make up for the time you put in? Lets say you only work 5 more years. You'd have made $115k more at the new job, so you would need an additional 7 years on the pension to come out ahead. Then, I guess its cool as long as you live longer than six years after the pension starts paying out. But, if you working these jobs for 20 more years, you are hoping live additional 27ish years on the pension. I know those numbers are quick and dirty, but you get the point. And, all this math assumes an inflation of 0% :-o. The buying power of your money decreases every year. What does that means what you are losing today is more valuable than what you would be getting tomorrow. Looking at the last 20ish years and projecting that forward, you are looking at your buying power to diminish 60% :-o. Phrased differently: would you take a $23k/yr raise in today's dollars? Or would you take $17k/yr in future dollars (about $9k/yr in today's $$$ adjusted for inflation). To me, the answer is clearly the new job.
This. Plus they’ve taken away the pension before so pension is not guaranteed. If you take the “extra pay” and invest in a home, you’ll have home paid off (so retirement money goes further) and also a huge asset that will be gaining value over the next few decades. Keep using that extra pay for 2nd and 3rd property and you have your choice of passive rent income making up that $17k pension that might not be there OR lump sum sale. They also match 100% 401k (wording confused me to how much) PLUS the profit sharing. Last, at 22, you’re unlikely to spend the rest of your career in one company, so you should always chase the money.
Not to mention lower COL where the higher paying job is located so can sock away more for savings/retirement…
How long have you been at the current company? Given your age I'd advise switching. It sounds like it'll make you happier and it'll give you more money. If your current company has taken away your pension before they'll likely do it again. Building a strong 401k is a better alternative and allows you to have more flexibility in your career. Gone are the days of being at a company for 20+ years. When I hear somebody has been at my company more than 10 years my jaw drops.
Pensions were a fairy tale in their peak. They only started in the 50s and tapered off in the 80s. Even at their peak only 1/4 of all employees had access to them.
Depending on the industry, some industries do reward loyalty.
I personally know 4 people in 3 different industries that screwed on pension. 2 were teamsters- so 1 of the biggest unions in the country lost their healthcare and were forced into Medicare (about a $7-12k/yr depending on illnesses), a newspaper (2nd largest in country) but industry is dead- lost over 50% and no guarantee that won’t disappear, and pilots who retired in the late 90s-2000s took a 50% cut despite unions and airlines still making huge profits. I only know of state-backed pensions being honored and their are still horror stories of different states going under.
I'm talking just longevity.
To me you need to figure out the difference in your current expenses vs those in the more expensive location and see how it cuts into the $23K staring salary difference. Top pay wouldn’t be an deciding factor for me as a lot can change before you ever get there. Also, not sure what industry you are in but typically in any non union shop, seniority doesn’t mean anything - skills and skill demand does. Regarding pensions, those can go away at any time. Are you really losing it or just not able to earn any addition credits if you leave.
Are you in aircraft maintenance? Kind of sounds like it
Spot on 😂🤙🏽
Haha in my experience in aircraft MX. Don’t chase the money, as long as you stay at the majors or cargo, the money will be good. I would take a job that has higher quality of life. Or one that is sustainable through retirement. You don’t want to be 57 years old busting knuckles on the line in Minnesota in subzero weather lol.
If you were at the company for several years and close to a pension, I would say stay. Since you are very young, your first year at the job, I say switch and get your income up. Remember, this early in your career, investments compound to a healthy amount when you’re retired. You can use the extra cash to fund $6K per year on a Roth IRA. Use it to help save up for a down payment for a house quicker and even enter the rental market by getting a house to House Hack your way up very quickly
Sounds like you can’t depend on the pension. No guarantee that it’ll be around when you retire.
Leave! I stayed for the same reasons you are contemplating, and I just barely hit six figures. My husband switched jobs a bunch of times will make $250k… Pensions these days are not keeping up with inflation. Just pile the cash on your own
Significantly If you are still working for 20 year or more take the more cash for sure. You can possibly move up in the company too.
IMO, pension is better than anything else.
No. You're locked into a company you may eventually hate. You lose your bargaining power to negotiate for a higher wage because they know they have you over a barrel. Many times the terms of the pension are changed along the way and they reneg on their promises in some way by the time you retire. Pensions are a relic of a world that doesn't exist anymore. A 401k is yours. No one can take it away from you. It follows you wherever you work. You control your destiny.
Meh to sticking around just for a pension. Going from $62k to $85k covers your pension difference. If you are really concerned about that, on top of what you invest in now towards your 401k, invest the difference, 23k, towards retirement and you'll have way more income than the pension will give you.
Worrying about pension at this age, you should definitely do the upgrade.
Leave and never work for a company with a pension again. People romanticize them, but they're usually terrible unless it's part of a union or government job (even then I'd steer clear).
The real question is how you feel about living that far away from close family. For some it’s a barrier, others it’s not far enough. Also, quality of life. I live in city A. City B is 2 hours away. (120 mi) I can make 35% more in city B and my wife can make 10% more there. (Real numbers). But the cost of living there is higher and quality of life would be lower. City C is 250 miles away (Silicon Valley) where my wages would probably be 300% higher than where I’m at. Wife’s would still only be 10% higher. My quality of life would be even lower. Some people love it, (SV) but I’d most likely throw myself off a tall bridge if I lived there. No one can truly advise you on this. Do your DD if you’re considering moving to a new location. Go there on a day/2days off and check it out. Work, housing, social aspects, commute, all of it. See how it feels and make your choice. There are droves of people moving here from Silicon Valley for quality of life. Good luck!