cash out my vacation time, or roll forward?

[kenmoremmm]

at the end of the year, i will have the option of rolling forward 40 hours of accrued vacation time. alternatively, i can cash it out.

for the past 5 years, i've rolled it forward. in generally, i've been receiving 5% raises each year, and expect similar, or more, next year.

tax situation in 2019 should be roughly the same as 2020.

i don't anticipate needing vacation time early in 2020.

what says the community? cash out or roll forward?

[RWD]

I would roll it forward. It's good to have some buffer in case something unexpected happens. I think most companies will pay out your vacation time when you quit so usually there isn't any problem with not using it all up.

[Dicey]

Are there any other benefits to accruing vacation? Is 40 the max you can roll over? How much total vacation do you get a year? Does your pay increase steadily? Inquiring minds...

[kenmoremmm]

no benefits that i see to accruing the vacation. our trips now are more limited now that we have 1 and 3-yr old kids.

40 is max rollover.

current vacation is 6.67 hours/pay period (bi-monthly). so, 20 days paid. 2020 will be 21 days. and so forth.

pay has increased 50% since 2012. 5.25% annualized.

[skp]

I don't think there is a "right" answer.  I cash mine out, at the max allowed- 80 hours.    I get PTO time equivalent to 6 weeks a year (includes sick time but a) I'm never sick and b) you get in trouble if you use it :).  I work a flexible schedule 3 days a week, 12 hour shifts and can adjust my work schedule to get blocks of time off.  There is also a max accumulation at which time you will start losing it.  For me 4 weeks vacation a year is plenty. The cash I get covers my insurance.  I think I am the only one I work with that does this.  Other people value their vacation time more than I do I suppose.  Something to consider even if you aren't planning on going on vacation with the little ones, you might need a day here and there.  Zoo time etc.  Just make sure there is no max- you don't want to give away your vacation time.

[Dicey]

no benefits that i see to accruing the vacation. our trips now are more limited now that we have 1 and 3-yr old kids.

40 is max rollover.

current vacation is 6.67 hours/pay period (bi-monthly). so, 20 days paid. 2020 will be 21 days. and so forth.

pay has increased 50% since 2012. 5.25% annualized.

Hmmm, if you push as much forward as possible, you're effectively paying it out at the next pay rate, which is a nice bump.

Random weirdness I learned as a result of this thread. DH can accrue 400 vacation hours. Upon retirement, his company will roll these hours, at his current pay rate, into his 401k. The MPP in this is the value of that would be approximately $20k.To get the full value, he will have to carefully time his contributions and date of retirement to avoid exceeding the annual contribution limits. His 401k has no match, so it wouldn't be a big deal to shut it off.

BTW he earns a ton of vacation and is a master of combining days off, comp time, and holidays.  He's taken nearly 180 hours off so far this year and still has nearly 400 hours banked.

[Proud Foot]

Do you just get vacation or do you get vacation and sick time? What is your SO's vacation/sick/PTO situation at their work, or do they stay at home full time?

Honestly I would most likely roll it forward to the next year. The increase in value due to raises is a bonus, plus having it available at the beginning of the year in case of emergency/sickness, especially with having young kids. And then you can always plan for random long weekends so you have your balance worked down to the 40 by the end of the year so you don't lose any extra.

[sparkytheop]

I'm sitting on some vacation time that I earned when I made 1/3 of what I do now.  We can roll over 240 hours, and I earn 208/year.  I had a pretty bad year that required a lot of time off for various reasons (using up both sick and vacation time), so it was nice that I had that buffer.  We don't have the option to cash it out though (until we retire, or quit), but that option would be nice this year.

If my son were still the age of your kids, I'd definitely roll it over unless I had some kind of debt weighing on me.  They tend to throw a wrench into a lot of things.  Other times it can be nice just to take an early afternoon and go spend it at the park.

[RWTL]

Another vote for rolling into the next year.  I plan to keep a max balance.  When I retire in 2023, they will cash out 100% - so I plan to retire in Jan and use the money as taxable income for 2023.

[Roots&Wings]

Another vote for rolling into the next year.  I plan to keep a max balance.  When I retire in 2023, they will cash out 100% - so I plan to retire in Jan and use the money as taxable income for 2023.

You can also run out the time instead of cash out when you retire, which will have the full payout cash value + your benefits (e.g. 401k match, healthcare, etc) during the run out time. I was also going to cash out until reading about the run out approach in another thread.

For the OP, another vote to roll over the time.

[Zamboni]

If you cashed it out, then what would you do with the money? That's an important question.

My opinion is that as long as you are debt free (excluding primary mortgage), then roll it as long as you can keep accruing more without losing any days. Time is more valuable than money, especially when you have little kids, and you won't regret having that cushion. As others have pointed out, accrued vacation is sort of like money in that it gains the "interest" of your higher pay rate over time. Some years you might be a lower bump in salary than the market, but other years your bump will be huge if you get a promotion or successfully negotiate a big raise in your current position.

[MKinVA]

Cash it out and invest it. It isn't earning you anything just sitting there. I worked in a place where you could carry over as much as you wanted, but a few years went by and people were retiring and cashing out, so management realized they couldn't afford to pay everyone for their time. They limited carry over and gave people a couple of years to wittle down their leave banks. A number of people were unable to use all their leave and lost weeks. Cash out. You will have another month of leave to use next year.

[Bloop Bloop]

Roll forward - on the assumption that your pay will go up faster than your typical investment.

When you retire/leave the job you can cash it all out.

Don't forget to take your "mental health days" i.e. use up all your sick leave before leaving your employer. Sick leave usually can't be cashed out.

[kenmoremmm]

i only get to roll forward 40 hours/year. nothing significant.

[kenmoremmm]

looks like a 16% raise for 2020, so definitely was a good call to roll forward the hours.

[Dicey]

Score! Congratulations on getting such a big annual raise.

[kenmoremmm]

my company has been pretty good to me. 5% annual raises +/- for the last 8 years and then this year was 16% after i started asking questions about converting my employment status to contractor-based.

[Dicey]

my company has been pretty good to me. 5% annual raises +/- for the last 8 years and then this year was 16% after i started asking questions about converting my employment status to contractor-based.

Wow! Nice to know they value you and are willing to show it.