Author Topic: Need advice - pros and cons of job with major pay cut!  (Read 2115 times)

hoodedfalcon

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Need advice - pros and cons of job with major pay cut!
« on: September 22, 2017, 12:58:02 PM »
Hello brilliant minds - I find myself in a bit of a situation that I am having a hard time wrapping my head around. In a nutshell: Do I take a remote job that will be a 30K/year pay cut but will allow me to spend more time with my SO who lives 4 hours away?

Current job: I am currently a lawyer working at a non-profit making 80K/year with pretty great benefits (100% employer paid health insurance premiums, 5 weeks paid vacation, 37.5 hour workweek, 5% 401K match) though the workplace itself is mired in dysfunction. There are general bad-attitudes, poor management, and lots of passive aggressive attitude (sometimes full on aggression). My recent promotion has me supervising folks, which it turns out I don't really like. However, just last month I paid off my private student loans (wooo!) but I still have 90K in federal loans, which are set to be forgiven under PSLF in 3.5 years. I am currently contributing 18K to my 401K and as of this month have an additional $1500/month I can throw at savings, because my living expenses are pretty low (under 2K/month).

New job: The new job pays in the low 50Ks, is also with a non-profit (so I would qualify for PSLF in 3.5 years), 3% employer match on 401K, and my share of health care premiums would be about $150-200/month. Opportunity for advancement is relatively limited. Probably wouldn't ever make more than 65K with the organization. I have a friend who has worked with this organization for over 5 years and has been content, though does admit that they pay poorly for what they expect you to do. HOWEVER, it is a remote position, with twice monthly travel (which I like), and would allow me to transition to living with my SO of 3 years who currently lives 4 hours away. SO cannot leave the area they are in due to child custody issues, so one way or another I would be eventually moving. This job would allow me to transition to living with SO while working on getting my house in rentable shape.

My thoughts: I will eventually be moving to where my SO lives, but the question is when. We have been doing long distance for nearly 3 years and it works fairly well for us. I have been looking for jobs in SO's area but nothing has really jumped out at me. I will not be taking another bar exam, so if/when I moved I would likely take a pay cut regardless. I have about 130K in retirement accounts. 39 yo. Was looking forward to making a higher salary and not having private loan payments for awhile so I could take care of some delayed maintenance on my 120 year old house. Was hoping if I found a new job it would pay at least 60K. Low 50's makes me sad. Should I get over the pay and take the job? Keep looking? Take the job and still keep looking? Stay where I am for another year and make serious progress towards future retirement?

I know part of this is a financial decision but also there is an emotional component. I suck at emotional decisions. So, what say you, hive mind?

formerlydivorcedmom

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Re: Need advice - pros and cons of job with major pay cut!
« Reply #1 on: September 27, 2017, 09:50:43 AM »
I've taken pay cuts before when I was really clear (with myself) on the reasons why I did it and how that decision would impact my future goals.

One time I did it to learn a different skill and to decrease my commute.  I understood that this would impact my retirement by X amount of time.  That job surprised me, and I got enough raises to be a net increase over my previous job within 2 years.

The job was soul-sucking, so I accepted another pay cut to move to a job that would a) expand my skill set in a different direction and b) provide more flexibility so I could overcome my burnout.  I took this (contract) job knowing that after a year, I might be looking again.

Although both of these were pay cuts, in each move I turned down other job offers that paid even less, because I knew that I was worth more than that, and if they wouldn't negotiate, it meant they didn't appreciate the skillsets that I provided.  I didn't want to work somewhere I wasn't appreciated.

It's up to you to determine whether this new job would put you in a better position for finding a job in SO's area or not, and whether the hit to your financial goals is within your tolerance limits.   This is a great opportunity for you to figure out what your tolerance limits are, if you don't already have that written down.

Dee18

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Re: Need advice - pros and cons of job with major pay cut!
« Reply #2 on: September 27, 2017, 11:14:40 AM »
When I was deciding about a job transition (many years ago) I hired an accountant to calculate the actual difference over my anticipated work life. ( I now, of course, would figure that out myself instead of paying an accountant.)  Go ahead and make yourself an excel sheet and calculate the different outcomes over 10, 15, and 20 years so you can figure out the true financial consequences.  You'll still have to do the hard emotional decision, but right now it doesn't seem like you have fully determined the monetary impact.

ZiziPB

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Re: Need advice - pros and cons of job with major pay cut!
« Reply #3 on: September 27, 2017, 11:56:40 AM »
I took a job with a significant pay cut a few years ago ($90K lower base salary!).  I knew that a portion of the cut would be offset by bonus $$, much better benefits (including a sizeable 401k match) and certain lower costs (free parking, free gym, etc.).  In the end the financial impacts turned out to be a lot less than I expected.  On the other hand, the improvement in my quality of life has been tremendous.  No regrets whatsoever.  Obviously, this is coming from a perspective of a high earner (in other words, I had plenty of room to accept a lower salary and still make excellent money).  I may have thought differently about it if the numbers were different.

nobody123

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Re: Need advice - pros and cons of job with major pay cut!
« Reply #4 on: September 27, 2017, 01:01:31 PM »
How long will the custody issues be in play?  What does the SO think about you moving closer?  Were you always long distance, or did you used to reside near each other and you moved for your current job?  Does moving automatically mean marriage so you can leverage benefits / housing costs?

What was your salary prior to the last bump that added the supervisory component?  If that's the role you really want, I would use that lower salary as the basis of comparison.

Personally, I would never take a pay cut of that magnitude voluntarily.  It is even worse when you factor in the lost company match amount and paying for the health benefit.  If you really want to move closer to your SO, keep looking for a better paying job before you pull the trigger.  Obviously your scope is limited until your loans are forgiven, but if there's no pressure from the SO to move closer ASAP, you're fine taking your time.

skeptic

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Re: Need advice - pros and cons of job with major pay cut!
« Reply #5 on: September 27, 2017, 01:51:13 PM »
Can you say a little more about the relationship, and the person's attitude toward you moving closer and/or moving in together? Does one of you travel to the other more frequently?

I know more than five situations in which a person moved to be closer to the SO and then they broke up in 6 months, despite having been together years before that. And in all of them it was the person who stayed who initiated/caused the breakup. I guess I also know lots of people who moved and stayed together. I know almost zero about your relationship so I'm not trying to assume any outcome. But it is true that some relationships work swimmingly long distance but get way to close for comfort when proximity is close.

I don't think there is anything wrong with taking a paycut in return for other non-financial benefits. In particular, if you plan on earning a lot more than 80k for years after your public service lawyering days are done, the 30k difference for a few years might not even register.

Overall it seems like you are giving up definite benefits for uncertain ones. You said nothing is wrong with the long distance and it is going fine as is, so why pay a big price to mess with what is working? It seems there is a hoped-for improvement in quality of life, but it isn't clear (so far) that moving is actually going to improve quality of life.

And regarding the less-than-ideal-but-not-abyssmal work environment, it sounds like par for the course. You could also change jobs in your same city (perhaps will no or less pay cut) to solve that.

In short: a bird in the hand is worth two in the bush.


hoodedfalcon

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Re: Need advice - pros and cons of job with major pay cut!
« Reply #6 on: September 27, 2017, 03:09:11 PM »
Thank you all for the thoughtful responses. I decided to turn down the offer for the job with the pay cut. The uncertainty of the new job coupled with the reduction in salary and benefits seemed to be too much of a risk. But you all gave me a lot of things to think about in the meantime. My SO is not putting any pressure on me to move, but is clear that they would love it if we lived closer together. Will that work? No way of knowing. I am pretty independent and so I am not in a rush to move, but also not being pressured at all.

I am going to continue looking for a job in my SO's area, or a remote position. I don't expect the custody situation to change and the youngest child is 10 yo, so there are many years to go before kiddos are not a major factor in location.

So yeah. I went with the devil I know in this situation. Because he pays better.

nobody123

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Re: Need advice - pros and cons of job with major pay cut!
« Reply #7 on: September 28, 2017, 09:19:26 AM »
Thank you all for the thoughtful responses. I decided to turn down the offer for the job with the pay cut. The uncertainty of the new job coupled with the reduction in salary and benefits seemed to be too much of a risk. But you all gave me a lot of things to think about in the meantime. My SO is not putting any pressure on me to move, but is clear that they would love it if we lived closer together. Will that work? No way of knowing. I am pretty independent and so I am not in a rush to move, but also not being pressured at all.

I am going to continue looking for a job in my SO's area, or a remote position. I don't expect the custody situation to change and the youngest child is 10 yo, so there are many years to go before kiddos are not a major factor in location.

So yeah. I went with the devil I know in this situation. Because he pays better.

Out of curiosity, did you just flat out decline it or did you try to negotiate a salary more to your liking and they said no?

hoodedfalcon

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Re: Need advice - pros and cons of job with major pay cut!
« Reply #8 on: September 28, 2017, 12:50:06 PM »
Thank you all for the thoughtful responses. I decided to turn down the offer for the job with the pay cut. The uncertainty of the new job coupled with the reduction in salary and benefits seemed to be too much of a risk. But you all gave me a lot of things to think about in the meantime. My SO is not putting any pressure on me to move, but is clear that they would love it if we lived closer together. Will that work? No way of knowing. I am pretty independent and so I am not in a rush to move, but also not being pressured at all.

I am going to continue looking for a job in my SO's area, or a remote position. I don't expect the custody situation to change and the youngest child is 10 yo, so there are many years to go before kiddos are not a major factor in location.

So yeah. I went with the devil I know in this situation. Because he pays better.

Out of curiosity, did you just flat out decline it or did you try to negotiate a salary more to your liking and they said no?

I gave them a number of 60K and mentioned negotiation of benefits. They came back with low 50s, no benefit eligibility for 60 days, and a very expensive health care premium after I had to pay Cobra for 60 days.... I let them know I wouldn't be able to take that severe of a cut. I didn't even get a response to my last email so I am considering it a bullet dodged at this point.

ZiziPB

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Re: Need advice - pros and cons of job with major pay cut!
« Reply #9 on: September 29, 2017, 07:41:23 AM »
Sounds like not taking the job was the right decision for you at this point.  Good luck with your search!

hoodedfalcon

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Re: Need advice - pros and cons of job with major pay cut!
« Reply #10 on: September 29, 2017, 08:26:32 AM »
Sounds like not taking the job was the right decision for you at this point.  Good luck with your search!

Thank you! The one positive outcome in all of this is really exploring my tolerance for my current job and realizing I need to focus on developing a strong plan to get myself in a position where fewer things are in flux. I need to buckle down and get some repairs done on my house. I need to map out 10-20-30 year finances. I had been so focused on getting these private student loans paid off I realize I haven't thought too critically about what happens next!

I am going to keep looking for jobs near my SO and jobs that will allow me to work remotely. But I also need to do some math!