With $3 million saved and two high incomes, is chasing an extra $150K/year worth giving up flexibility and job security?
One of the most complicated decisions anyone can make is whether or not to leave one job for another. Unfortunately, sometimes this decision is made for us, but when it’s not, trying to understand if the grass is greener in a new role is a painstaking decision-making process. For one Redditor, this is precisely what […] The post With $3 million saved and two high incomes, is chasing an extra $150K/year worth giving up flexibility and job security? appeared first on 24/7 Wall St..
One of the most complicated decisions anyone can make is whether or not to leave one job for another. Unfortunately, sometimes this decision is made for us, but when it’s not, trying to understand if the grass is greener in a new role is a painstaking decision-making process.
This Redditor is posting about a new job opportunity to help them significantly increase their income now and set aside more for retirement later.
The downside is that this new role requires being in the office five days a week and comes with less overall responsibility.
The reality is that this individual should present this new offer to their current job and see if they are willing to match or increase current their current salary.
Are you ahead, or behind on retirement? SmartAsset’s free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don’t waste another minute; get started by clicking here. (Sponsor)
Key Points
For one Redditor, this is precisely what they are trying to decide now, according to a post in r/fatFIRE. The poster has an opportunity to double their salary, but with some added burdens, like eventually going into the office and a long commute. These are the exact reasons that can make deciding on a new job so challenging.
The Job Situation
Today, the original poster works in IT and leads a large team that includes security, compliance, and IT. In this role, they make around $300,000 annually and have been fortunate enough to work from home since the pandemic began. There is also the consideration that they believe they have “excellent job security”.
The other role would involve moving from a larger company to a smaller one, with a smaller team, a 75-minute daily commute, likely five days a week in the office, and unknown job security. The caveat is that they would also be able to double their salary to almost $600,000 annually with this new opportunity.
Aside from the salary, they know that private equity job security can be unknown, with the additional caveat that they would also drop their responsibility level to just leading an IT department.
In addition to his situation, the Redditor’s wife makes around $500,000 annually with good job security. Between these two salaries, they can live in a very high-cost-of-living area with their small children, and he notes they can live on the wife’s salary alone, but it would be tight.
With their home, they have an estimated net worth of around $3 million, with their home value accounting for around 50% of this number. The couple is saving around $150,000 annually, mostly his salary after taxes. Lastly, they also have the potential for a large inheritance, but are not counting on it.
All of these details lead to one question and one question only: do they stay or go?
Some Immediate Concerns
As one commenter puts it, some immediate concerns must be addressed to make the best decision. First and foremost, this new job would involve working with a smaller team for twice the pay, which could also mean twice the work. If the Redditor can clarify the likelihood that the team could grow in the future, this might help influence a decision.
Another question revolves around job security, which the original poster believes is solid at their current role. Is there a career path at the company they are at now that would allow them to grow their income? If they came to the current employer saying they had a job offer, would there be any attempt to match or up their current salary?
It should go without saying that, on paper, taking double the salary seems like a no-brainer. However, there is also the question of whether they may hate this new role. The real question is whether they can leverage the increased salary elsewhere, where they might be happier?
The Best Decision
Looking ahead, you have the hope that they are on track to be able to retire in around 20 years, which would put the couple at around 60 years of age. The hope is that in this timeframe, averaging a 7% annual return, they will have around $12 million in total net worth.
This begs the question of whether the additional $150,000 is worth the downsides of the new job. As they could save as much as $300,000 annually with this new role, this would put them at around $18 million in net worth (same 7% return) in 20 years.
The bottom line is that the first thing I would do in this situation is have an honest conversation with your current employer. If you are someone running multiple teams and are really that valuable, they can offer you a salary increase to stay.
Even if any increase they provided wasn’t a direct match to the new role, it’s still worth considering, as it would save you the commute and help you maintain job security. There are far too many instances in which money isn’t everything, and aside from the salary increase, I’m not seeing any other advantages to taking the new role.
The post With $3 million saved and two high incomes, is chasing an extra $150K/year worth giving up flexibility and job security? appeared first on 24/7 Wall St..
