The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: SCIGEM on June 08, 2018, 10:10:48 PM
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Hi,
My spouse works at a non-profit doing work that is slow moving but high impact. This position comes with a vested pension plan (20 more years- retirement income will be 70% of highest salary) and the salary is okay for the bay area standards. However, it is less than a year and budget for his project just got funded. These pension jobs are rarely open. He was just approached by one of the top silicon valley companies where he will get to work with a team doing cutting edge work. However, there is question of the stability of this company. The salary is exactly same but the stock options are substantial for our standards. The stamp of having this company in the resume will make for a good future in the silicon valley. One additional positive for the company is that the commute will be almost nothing compared to the current job. My thought is that we could always come back to pension job later in life. Having tangible money now will be useful for kids education/buying home. But we are torn that if he leaves, he wont get to work on the project that he got the budget approved for at current job. Would you stay safe with the promise of a pension or do you take the risk and hope for the best?
Thanks.
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I'd leave in a heartbeat, unless the intangible value of working for a non-profit was higher than the benefits offered by the company.
If these positions are so rare, the non profit should be able to find someone else easily.
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Thank you for the feedback, YoungInvestor.
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A bird in the hand is worth two in the bush.
Who knows what will be going on with a pension plan in 20 years....will it be solvent? Will you really want to hang around for 20 years, or will something else come up?
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This. Plenty of people have lost pensions or had them reduced over the years. As such, I give the promise of a pension from anything other than fed/state government a highly skeptical future when evaluating against concrete compensation now.
A bird in the hand is worth two in the bush.
Who knows what will be going on with a pension plan in 20 years....will it be solvent? Will you really want to hang around for 20 years, or will something else come up?
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There is a fair amount of risk inherent in any pension plan. Essentially its a bet that the company (or nonprofit) will still be around and have the assets to make good on the pension (and the desire by the leadership to do so) in 20 years. That seems pretty risky. Worse, you don't just need the plan to be there in 20 years, but also throughout your retirement, so probably closer to 50 years. That's asking a lot.
I would take the stock.
-Ray
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Hi All,
It is almost like a govt pension as it is from the state university. Will that change the balance? Currently, we are leaning towards the suggestions here ie take the job with stocks for now and worry about long term later in life.
Thanks.