No reason to take salary over retirement match, right?

[cjl1978]

My nonprofit employer covers health insurance premium costs, but because I previously purchased family coverage through my wife's employer, they agreed to provide me with a monthly stipend (equivalent to the cost of a premium for individual coverage, about $450) to fund an HSA (our insurance was a HDHP).

Now my wife has switched jobs, and her new employer provides HRA coverage for the entire family at no cost to us. I did some research and it seems I can't keep funding the HSA, so my employer has agreed to either give me a $450/mo raise or increase the employer 403(b) retirement account match (currently at 6% of salary) by $450/mo.

I don't absolutely need the $450 right now to make monthly ends meet (fortunate and grateful for that), so I presume there is no reason not to take the retirement match?

[chasesfish]

Are you already on target to contribute the maximum to your 403b?

The additional employer match would be helpful if you're already maxing out your retirement account, since the rules are (Employee Limit + Employer Match) up to $53,000.   The other benefit is the match is never subject to social security or medicare taxes, which will take 8%+ immediately out.

Otherwise, it just depends on if you need the money right now or not.  Its the same cash outlay from the employer then it

[Raenia]

As long as you are planning to contribute enough to your 403b to get the whole match, definitely take it as the retirement match.  The tax savings are definitely worth it, since you don't need the money now.

[Gin1984]

I pretty sure it is not legal to only increase the match for one person in a company.

[chasesfish]

I pretty sure it is not legal to only increase the match for one person in a company.

I needed more coffee - I think Gin is right.

The only plan I know of is a non-qualified deferred compensation plan with discretionary employer deposits.   They're rare in the non profit world

[Villanelle]

I don't think I'm following.  They are telling you that the standard match is 6%, and you will get 6% plus $500?  That seems... unlikely.

Assuming that's not actually what's on the table, for me it would be a question of taxes.  If they are giving you that money in some tax-advantaged way, take that.  Otherwise, take the salary and automatically invest is, since you can almost certainly do better as far as options and expense ratios. 

[Mustache ride]

Company match is probably better, but I wouldn’t discount the compounding of yearly % raises to your base salary.

[MM_MG]

I'd take the raise.  If you aren't already maximizing your 401K contribution you can simply raise you contribution by $450/mo.  You get more flexibility this way. 

[soccerluvof4]

Based on what your saying take the raise and start maybe an IRA because what there proposing with your company match i have never found to be legal

[cchrissyy]

one reason to pick salary is because future raises are usually given as a % of current salary, so any small amount added to your monthly pay will compound over time and is more valuable than it looks right now.

[cjl1978]

I pretty sure it is not legal to only increase the match for one person in a company.

Thank you for flagging!  Nonprofit leadership is mostly non-Americans so I think they don't know the ins and outs of us employee compensation rules.  Is there no way they could offer an additional employer contribution to my 403(b) account beyond what other employees receive?

[Gin1984]

I pretty sure it is not legal to only increase the match for one person in a company.

Thank you for flagging!  Nonprofit leadership is mostly non-Americans so I think they don't know the ins and outs of us employee compensation rules.  Is there no way they could offer an additional employer contribution to my 403(b) account beyond what other employees receive?

None that I know of, but that does not mean there might be something I don't know.  I do personal finance, you need to talk to a CPA.