Poll

Which job should I take?

Local gov't
28 (90.3%)
Private (job I have now or some version of it)
3 (9.7%)

Total Members Voted: 29

Voting closed: November 16, 2014, 07:48:05 AM

Author Topic: Which job  (Read 3753 times)

Retireme32

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Which job
« on: November 06, 2014, 07:48:05 AM »
So, I'm currently working in a private company but my client is the local gov't.  The past year has been very frustrating, the program is new, the boss is a micro manager, etc.  BUT - the job got me to a location where I wanted to move, where I could afford to buy a house, and reduce my commute - and by reduce I mean - null and void - I live five minutes from the office.  The program is such that we were always "temporary" but we took that to mean about 5 years.  Now it looks like the gov't division we work for will staff up sooner than later and not need us anymore which effectively puts me out of a job BUT - in my industry I will find another job no problem. The problem is that most of the jobs will be 30-60 minutes away with awful traffic. This includes hte possibility of just staying with my company but going back to headquarters which is 45 minutes away. Plus  parking is $5-10/day out of my pocket.   The gov't is now offering me a position - it would be the same position that I have now except I'd work directly for them instead of via the private firm I now work for.    The only kicker with them is they are offering me $4k less than I make now.  But in exchange I get - 1) to keep my commute; 2) to keep doing the work I do like (when you get rid of the micromanaging) 3) the health insurance is cheaper for me $40 less/pay period but more importantly - it will be $200/mo vs. $600/ month if I stayed with my current company when I add a family . And that's the other issue - I am married but do not have a kid and I'm getting to that age where it's time to make a plan and insurance with the local gov't would be $400 less per month for a family package than with my company or my husband's company.  So that alone probably makes up for the $4k difference.  Govt will also give me more vacation, they give you sick leave (I have to use vacation for sick time right now) and they give a pension plan in addition to me contributing to my 401k and you're vested for that after 5 years.

The big debate - working for gov't vs. private - the issue is always better benefits vs. more pay.   BUT - when we talk about early retirement - is it better to go after more pay always? You are trying to save over 50% of your salary and so maybe you say that's definitely easier with more pay?  My thought is that it is not bc you have to factor in the cost of living if you have that long commute - I'd have less time at home, less time to cook so I might eat out more, I'd spend more on gas and car insurance and I'd most definitely speed up the life of my already old car and have to a new one much sooner than I was planning.  And again - we're talking about $4k difference. I would balk more if it was like $10k but one of my coworkers now - his wife does the commute I'm thinking of and they said it easily would be $10k savings if she got a job in town.   

So The POLL QUESTION- all things considered, and specifically looking at that I've made the choice to chase the "early retirement dream" rather than the "rise to the top" dream.  Which job supports that dream choice more?  Thanks for helping me with this!

p.s. I have worked local gov't before so I definitely have experienced both sides.  Also consider that my realization to retire early came recently so I will definitely not be able to pull off the "have a baby after you retire" deal like MMM so I have to consider quality of life working and raising a child at least in the beginning b/c it will overlap. 

juuustin

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Re: Which job
« Reply #1 on: November 06, 2014, 07:59:37 AM »
Local gov't and its not even close, in my opinion.

Let's assume you are in the 25% tax bracket.  Obviously there are credits, deductions, and state taxes to consider, but let's just use Federal for this illustration.  $4,000 more per year is $3,000 after-tax, in your pocket.  A 45 minute commute compared to a 5 minute commute is most likely 30 more miles each way.  Conservatively, let's say each mile costs you about $0.30 (most likely more).  In a calendar year, with two weeks vacation, you will drive to work 250 days for a total of 15,000 more miles than the current commute.  Those 15,000 miles will cost you $4,500 after-tax at the assumed rates.  The health insurance reduction is just the icing on the cake, in my opinion.

Grid

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Re: Which job
« Reply #2 on: November 06, 2014, 08:04:45 AM »
Oops.  Clicked without reading, and voted for a private job, simply from my experience in the two types of environments.  But juuustin has it right, and I agree after reading that the local government job is better for your situation.  Subtract 1 from private job votes, and add 1 to local-government job votes. 

Future Lazy

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Re: Which job
« Reply #3 on: November 06, 2014, 08:22:00 AM »
Lol nine votes and the one vote for private was like OOPS SORRY that's awesome.

Take the pay cut, and then take the benefits to make up for it. I bet your take home won't end up taking as big of a hit as you think, and according to MMM's classic The True Cost of Commuting, you're saving yourself .5mil to 1mil dollars by not commuting 1.5 hours a day.

http://www.mrmoneymustache.com/2011/10/06/the-true-cost-of-commuting/

Seems like an obvious choice to me.

begood

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Re: Which job
« Reply #4 on: November 06, 2014, 09:23:29 AM »
Local gov't pensions have been a little iffy, but if you consider that to be a nice bonus if you get it rather than "I need my pension or I'll be eating cat food at 65", then I say go for the gov't job with the no commute and the better benefits. :)

Numbers Man

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Re: Which job
« Reply #5 on: November 06, 2014, 10:13:40 AM »
Local Government. The better non-taxable health benefits equalizes the equation. In addition, your commute would be the same as it is now. Plus I bet working for the local government isn't like working in a sweat shop that most private industry jobs have become. Do you have to worry about mergers or your company being sold or even your job being in jeopardy working for the local government like you do in private industry?

stash4cash

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Re: Which job
« Reply #6 on: November 06, 2014, 12:03:24 PM »
I'm in a private job but have recently thought about switching.

Local government jobs will almost always win the long-term financial equation because of outsized pension benefits compared to self-investing the salary differential.

The advantage of private jobs is that you generally feel able to jump around more - the pension is called "golden handcuffs" for a reason. For me, I think private = more interesting work (which for me is happiness). But I'm making that decision with a realization that I'm likely to have less in retirement than if I just gutted it out in a government job. :)



stash4cash

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Re: Which job
« Reply #7 on: November 06, 2014, 12:04:53 PM »
Oh and I should clarify that the difference in salary for me would be significant (20+K) but even then the pension wins (if I put in 20 years).

Retireme32

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Re: Which job
« Reply #8 on: November 06, 2014, 12:38:37 PM »
I'm in a private job but have recently thought about switching.

Local government jobs will almost always win the long-term financial equation because of outsized pension benefits compared to self-investing the salary differential.

The advantage of private jobs is that you generally feel able to jump around more - the pension is called "golden handcuffs" for a reason. For me, I think private = more interesting work (which for me is happiness). But I'm making that decision with a realization that I'm likely to have less in retirement than if I just gutted it out in a government job. :)


stash  4 cash - I hear you on the private with more "jump" but on the case of interesting projects - in this particular situation - I'm entering a sector of the local gov't that has many interesting projects and I'm already doing that work for them now - so I'm already satisfying the "interesting work" factor but just making sure I keep it that way rather than gambling for interesting work if I were relocated back to the private job's home base which is 45 minutes. 

Retireme32

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Re: Which job
« Reply #9 on: November 06, 2014, 12:39:54 PM »
And Yes! I do consider the pension just an added bonus to my healthy stash I"m working on - not a major player in the game as tall.  Just trying to set up 2015 and beyond to make it as healthy a stash as possible as fast as possible and retiring from this "game" altogether. 

stash4cash

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Re: Which job
« Reply #10 on: November 06, 2014, 02:16:26 PM »
Seems like you have a clear winner then. :) Best of luck!