Career advice

[GhostSaver]

Hi everyone -

I'm new to the forum, though I've enjoyed reading the blog. I'm facing a job decision, and I think I know the right decision. But it's scary. Maybe I'm just looking for some affirmation.

About my family's finances:
Me: 33 years old. BA and MA in economics from schools with top-tier repute. Married with one child.
Wife: 30 years old. BA in art and anthro from a flagship state U, MA in teaching from top college of ed.
Child: 10 months old. Little in the way of human capital. No positive contribution to our family's financial situation. Cute.
Assets: House: 500k fmv (conservatively). Circa 250k remaining on mortgage at 4.25%.
             Retirement accounts: circa 100k in tax-deferred retirement accounts. I'm dumping about 10k per year into mine and the Mrs. is doing just enough to get the employer match.
Liabilities: The aforementioned circa 250k mortgage. We owe 16k on a Subaru @ 1.9%. We have 17 months remaining on a leased Mazda. 6k on a credit card from an unexpected but urgent home repair a few months ago.
Current jobs: me: GS-12 civil servant. 75k per year. wife: teacher 35k-ish at a charter school with limited benefits. Both of us have a side hustle as ski instructors. We can pick up extra hours at the local major resort at circa 20 bucks an hour plus tips on weekends.

Our decision for the coming year:

I just got offered a job in the private sector at circa $130k per year. Health premiums are a push with my current job. The 401(k) match is a bit worse than the federal TSP. I'm vested in the pension portion of my federal retirement, but it isn't much.

My wife would like to take a year off from her day job. Child care runs about $850-1100 per month for a kid our daughter's age in this part of the country: my mother-in-law has been helping out this year while my wife has been back at work, but we are on the hook for child care as of this coming summer. My wife makes peanuts and wants to transition to the regular schools (or potentially something more lucrative?) anyways.

Our goals: increase savings rate. Continue to enjoy free time. T

The feedback I'm looking for:
I know that getting caught with our pants down and putting a home repair on the credit card was dumb. We will fix that and save up a new emergency fund. We're also trying to ditch the leased car. You don't need to tell me this.
Tell me whether or not I should walk from the GS-12 grade federal job security for the more-lucrative private sector.
Make some suggestions for things my wife could do for some side money if she takes a year with the baby.

Thanks.

[Midcenturymater]

Could your wife tutor when you are home so no childcare costs?
She could do online e teaching around the baby so no child care. She could go babysit one day at weekends when you are home or a Saturday night bar job?

[mozar]

Depends. Would the new option provide more career growth than the federal govt, or vice versa? Is the job for 130k a lot more hours? What is the difference between commutes? When do you want to FIRE? Do you want more kids?

[DebtFreeBy25]

That's a huge pay difference. I'm tempted to say to go with the private sector job. Can you tell us more about the industry? Is your field unstable or is there another security reason to stick with the government job?

In terms of your wife, work out a plan for when you or someone else can care for your child. It seems like her best bet for side income is to stick with the ski instructor gig. Another option would be tutoring students in a student that she's qualified to teach.

[ETBen]

I have a lot of opinions about women quitting work completely with kids bc childcare is too expensive. But in her case and wanting to switch from charter to public or even a good private school, I wouldn't think a gap in work would help her chances. I think an online school position, even part time, would be better.

[doggyfizzle]

If your FERS annuity is vested already (5 years of service), go ahead and bail for a couple years and work in the private sector.  The experience won't hurt you, and you're likely to end up in a much better (GS-14 or GS-15) level position should you choose to return to Federal service later on in life.

I work for a federal energy regulator, and my private sector experience definitely fast-tracked me to GS-14 level as an early 30s professional.

One thing I'd suggest you consider carefully is keeping your money in the TSP.  It is a benchmark incredible 401k-type account, with fees of about $.29 per $1000 invested in the account.  Unless your new company has as good a fee/fund offering, just keep your TSP account active rather than roll it into an IRA or 401k.

[Widget]

If your FERS annuity is vested already (5 years of service), go ahead and bail for a couple years and work in the private sector.  The experience won't hurt you, and you're likely to end up in a much better (GS-14 or GS-15) level position should you choose to return to Federal service later on in life.

I work for a federal energy regulator, and my private sector experience definitely fast-tracked me to GS-14 level as an early 30s professional.

One thing I'd suggest you consider carefully is keeping your money in the TSP.  It is a benchmark incredible 401k-type account, with fees of about $.29 per $1000 invested in the account.  Unless your new company has as good a fee/fund offering, just keep your TSP account active rather than roll it into an IRA or 401k.

Agree completely!  I would bail on the GS position.  Unless it's the only position of its kind (I know 12s are kind of odd-ball), you should not have trouble getting back into the GS system if you want to later, and the private sector job may give you a leg up as doggyfizzle says.  Furthermore, you'll be covering your wife's salary plus some, allowing her the year off and saving even more money by ditching childcare (and presumably car #2), which should more than make up for the slightly worse 401k.  So it'll definitely help you hit goal #1 AND help your wife achieve what she wants.  Need more info to determine if it'll help you hit goal #2.  If it's the same 40 hours per week, might as well be making more for it.  I can't see any downsides.

[GhostSaver]

Thanks!

The new job would be full-time work from home. The old one involves an hour-long interstate commute 3 days per week. So I will definitely try to ditch a car.

I'm actually working with those economics degrees and would be moving from an analytics role with an obscure arm of us treasury to an analytics role with an obscure arm of Fortune 500 treasury. So it's a chance to broaden my skill set to include some technical corporate finance from something that I'm afraid was going to pigeon hole me as just a low level wonky policy guy. I would prefer to stay out here in the Rocky Mountains for cost/ quality of life reasons, so I have been reluctant to chase promotions that would put me back in dc, even on the rare occasions that they've opened up.

Thank you for the suggestion for the Mrs. to look into an online school role. We were kicking around that idea or teaching at the local college's school of Ed.

It's nice to hear some encouragement from a federal energy regulator. I assume we used to see each other bike commuting around the met branch trail!

[redcedar]

A few things to consider:

1. Are you thinking of retiring early? If so, a little or alot early. I ask because alot early can reduce the benefit of a pension.

2. If answer to #1 is anything other than alot early, make sure that you are including the value of your future pension in your analysis of current vs other job. A pension can add alot more value that you may expect.

3. I encourage your wife to take a year off but to have a realistic plan for reentering the workforce. Family time is worth its weight in gold and living on one salary can really create some teamwork on cutting costs. Lastly, definitely push towards public education when she returns, a job that includes a pension. One partner with a pension greatly increases your safety net later in life.

4. Determine how you would spend the salary increase before deciding to take the job. $55k is alot of money but with it comes higher taxes. Tax advantages savings can really help you keep most of the extra pay instead of it going to taxes.

5. Do all that you can to understand the culture differences between public and private sector work. They can both be stressful but in different ways. That may be glaring difference or subtle differences but whatever they are, if they make you unhappy, no amount of money would make the move worth it. A few hours spent talking to current employees can be a very worthwhile investment of your time.