Author Topic: Case Study: Analyzing New Job Opportunity  (Read 1294 times)

Overflow

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Case Study: Analyzing New Job Opportunity
« on: June 23, 2017, 07:14:59 AM »
Hello,

First time writing a case study, and this one might be a bit unconventional.

Earlier this week I interviewed for a new job and I was told that i can expect a formal job offer in the next couple days.

The easy way to look at this is "does this job pay more than my old job". But the MMM community has made me aware that there are many more factors.

For the purpose of this case study, lets assume both jobs are equally fulfilling and present equal opportunity for career growth (not necessarily true, but hard to quantify).

Life Situation
27, Married, 2 Kids under 5 years, Wife stays at home = one income family.

   Annual
Salary   $51,000
401k   $2,040.00 (match 4% of employee 5%)
Health Insurance   ($6,534.48)
PTO   $0.00
Holidays   $0.00
Commuting Cost   $0
401K Fees (on about 17K)   ($79.50)
Home Office Expenses   ($360.00)
Total   $46,066
   
   
   Annual
Salary   $55,000
401k   $1,650.00 (match 3% of employee 6%)
Health Insurance   ($3,762.48)
H.S.A Contribution   $1,500
PTO   $0.00
Holidays   $0.00
Commuting Cost   ($500)
401K Fees (on about 17K)   ($9)
Home Office Expenses   $0
Property Taxes   ($1,000)
Total   $52,879

Total Difference: $6,813 (in favor of new job)

Explanatory Notes:
401K - I would roll it over from my current provider into a Vanguard fund and go from .45% fees to .05%.
Property Taxes: We are looking to move in the near future. If we took this job we would move to next city over to be close to work, but property taxes are about 1k higher. Housing prices in general are the same, and I didn't factor in moving expenses because we are looking to move either way.
Commuting Costs: I would most likely bike (if we live under 5 miles away), in which case $500 might be a bit high. If I commute over 5 miles, I would likely buy a scooter for $500-$1000.
Health Insurance: I am primarily looking at premiums because calculating actual medical expenses throughout a year is tough. New job would contribute $1500 annual into my HSA.
PTO: Essentially a wash between the two jobs. One has 22 days of PTO and 7 Holidays. The other has 18 days of PTO and 11 Holidays.



 Am I forgetting any important financial factors in deciding between these two jobs?
Anything else i need to include?


YoungGranny

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Re: Case Study: Analyzing New Job Opportunity
« Reply #1 on: June 23, 2017, 07:56:26 AM »
Do either companies offer an annual bonus? I know the bonus structure at my new company was quite a bit better than my old company which has actually made a 10% difference in total income in some years. Do either of them do profit sharing on the 401k? Some companies will add a bonus in the form of additional funds contributed to your 401k. It can be hard to get information on bonus and profit sharing structure for a new company but I think it can be worth it to know.

I think another key area is hours required? Would the new job require additional hours on top of the 40 hour workweek? My old job was closer to 60 where my new job is around 45 - especially since you have kids kids sacrificing time for a marginal increase may be a factor.

Also, would you be able to bike or take the scooter every day? What if bad weather hits? Commuting costs can easily rack up so it's something to be realistic about.

Good luck with your decision!


Overflow

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Re: Case Study: Analyzing New Job Opportunity
« Reply #2 on: June 26, 2017, 06:59:28 AM »
Thanks YoungGranny.

- My current job has a bonus structure, but its new, untested and I don't have a ton of control over whether i get it or not. Kinda based on company profit, which I play only a small part in. I don't know of any bonus structure at new job, but I will be inquiring.

- Hours appear to be pretty similar. If anything this new job will probably have more flexible hours - which is a big plus for me.

- It looks like we would live less than a mile away, so biking or walking almost all the time. Short drive if necessary.

YoungGranny

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Re: Case Study: Analyzing New Job Opportunity
« Reply #3 on: June 26, 2017, 02:46:57 PM »
Honestly seems like you have a good handle on all of this then. Let us know what you decide!

ChpBstrd

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Re: Case Study: Analyzing New Job Opportunity
« Reply #4 on: July 05, 2017, 01:04:59 PM »
I'd say take the new job.

DarkandStormy

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Re: Case Study: Analyzing New Job Opportunity
« Reply #5 on: July 06, 2017, 08:55:37 AM »
On paper, looks like the 2nd job is a bit more favorable (without knowing the details of like what kind of healthcare insurance coverage you get, etc.).  Like you mentioned, the "fulfilling" portion only you can answer and only you can place a value on that vs. HSA contributions, commuting costs, etc.
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