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Would you give up a state funded job with really good benefits to make a salary that is considered great for your area? Maybe with this salary comes little or no benefits to you. No vacation time, no sick leave, no retirement or health insurance, but a great salary nonetheless?
Would you give up a state funded job with really good benefits to make a salary that is considered great for your area? Maybe with this salary comes little or no benefits to you. No vacation time, no sick leave, no retirement or health insurance, but a great salary nonetheless?
I don't care what the salary is... if I get zero vacation time to enjoy it!
You have to consider the value of said benefits. Does the added compensation equate to the loss in benefits?
If you would otherwise receive 20 days of PTO, does the extra compensation account for 160 hours (20 * 8 hours/day)? Don't forget the intangible value of having paid time off to relax, run errands, take vacations, etc.
Health insurance can be expensive for an individual, and you need to have health insurance. So does the extra compensation account for the value of an individual health insurance plan?
How about 401k or other retirement benefits that companies offer? Does the added compensation allow you to adequately put away ~10% of your income into retirement savings? A lot of companies do 401k matches up to a certain amount that you contribute. Mine is 100% up to 4% of my gross income. So that equates to a total of 8% of my income going into my 401k.
"Extra" compensation in lieu of benefits can be deceiving because it seems like you're making more money, when in fact, you're not because of the opportunity cost of the benefits you're foregoing. This is why contract positions are not ideal when you think about it. Sure, you might be making $25/hr for a job that would typically pay $20/hr. However, you're also not getting any of the benefits, which likely cost much more than the $5/hr extra you're making. Benefits alone can probably account for $15k+ of your total compensation package. That's not chump change for the average American worker.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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If you don't get paid vacation or medical, and the pay is good, you won't get any time off, and will have to pay a fortune for private pay medical. No thanks, I prefer both a good salary and good benefits, even for another $30-40k I'd stay where I am, to make up for the loss, including maximum contributions to 401k and IRA accounts, would take another $100k or so.
The direct cost to my employer for my benefits is about $30,000. If you factor in a wage for my vacation/holiday/sick leave, that would be another $30,000, give or take.
No way would I take a no benefits job for a mere $60k raise. Absolutely not worth it.
I work for the Federal Gov as an R.N. An R.N. in the same type of position at the private sector hospital across the street probably makes $6.00-$8.00 an hour more than I do which is about $13,000/year. What I have that the R.N. with the higher salary doesn't is 5 weeks annual paid vacation which is an R.N. benefit that starts at day 1 of employment, decent sick time, a pension, a 401K, and great health insurance I can keep for life. So, for me the benefits are of more value than the $$.
So basically a 1099 type of position? I agree with Mr.Analyst that you need to first determine how much "more" money you are really getting after factoring YOUR cost for all the benefits that you will now need to pay for.
For me, even if all the above works out, it would still depend on other factors as well. For starters, it would depend on the environment/culture. I would take Pitt Chick's comment and expand on that. I don't care how much you're paying me, I need to enjoy the work, people, environment etc. However, sacrifices can be made for other gains - If I were early in my career, and this was a great opportunity to gain some valuable experience, sure.
But the key is determining how much those benefits will cost you. Because while they are "benefits", not all are optional (insurance, sick leave, etc.).
what I don't get is why didn't they make an effort to pay down the mortgage/increase savings while he was making higher wages on commission... the article said it depends on if they had savings/etc... all of which they could have obtained while they were living "richer" but they didn't...
I'm at a stable job with a good salary... I'm happy where I am, sure I could make more... so what? I would just put it into investments like I do my excess money now. Sure I could "retire" 5 years earlier... but I may not "last" 5 years longer if I went that route either. At current job, I can see myself in it longer because I enjoy it where I can see myself staying until retirement. If I have a change of heart later on, I would do commissions only once my investment money is to a point where if I made $0, I would still be fine, then I could try out sales because if I sell 0 items, I still won't be "hurting"
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