comparing jobs, one with no 401k

[One Wet Bandit]

Hi,

I'm considering switching jobs, but the new one offers no 401k option, while keeping me as a W2 employee.  How much more money is worth it salary wise if there's no retirement option?  Married, wife has 401k in her job, I have 401k in current job (only a 4000/ year match by company) and we backdoor roth.

Current job- salary 270-300,000/ yr , W2, no call M-F, 4 weeks vaca/PTO, no CME, no CME allowance, I pay for all licenses, etc. avg 40-45 hrs per week, lots of driving but some days home by 3 pm, others home at 6pm , 401k with 4000 match, HSA allowed.

New Job- Corporate, 320-350,000/yr, W2, no call, M-F 730-530 (but really 7- 430/5 most days), one hospital (no excess driving), 6 weeks pto, 3000 dollar CME allowance for licenses/cme/etc.  No 401k option, just a supplemental retirement plan to allow to defer up to 50,000 per year, but that is subject to corporate creditors before me so I don't trust it at all, and you have to cash it out at once when leaving service.

So new job would be potentially more salary and vacation, with a set schedule and less driving (once I move). But no retirement option.  is it worth it all other things being equal?

[jfoxcpacfp]

Whether you trust it or not, the supplemental plan allowing you to defer up to $50k per year is a very good value with the chances minuscule that you would lose your money. The CME almost offsets the 401k match and the extra 2 wks PTO puts you way over the top.

Given the fact pattern, if you were my client, I would (all other things being equal) recommend the new job. Of course, the ranges are $20k increase at the low end to $80k at the high end. The probability of one or the other could affect the recommendation.

Are you sure you would have to do a 100% cash-out immediately upon leaving service? It's odd that there are zero other options. That's the big negative in my mind.

[VagabondMD]

The new job sounds better than the current one in almost every way. Don't let the tail (401k) wag the dog (everything else).

[justlearning]

sounds like new job is the better one for sure.

[jhwkr542]

The total compensation package of the new job is better.

[hightower]

New job sounds better for sure but I wouldn't use their retirement plan.  Knowing that your hard earned cash could disappear to creditors if the corporation performs poorly seems too risky for me.  My job offers both a 401k (which I max yearly of course) and a corporate plan like yours and I choose not to contribute to it for the same reason.

I guess it would mean you would be padding your taxable account all year long instead of a 401k.  Not a bad option really.  Sure you're paying slightly more in taxes, but you're making better money and you get more vacation time, cme allowance, and less driving.  Win, Win, Win, Win.

[djohnflatfeecfp]

I agree with everyone else - new job definitely sounds better.  You may end up working more hours, but with less drive time the length of time away from the house would probably be a wash.  And the extra two weeks of PTO annually ends up being another $12,000 benefit, at the low end.  I echo Johanna's comments about the Supplemental Retirement Plan.  It might be worth asking them for some more details on the cash-out requirement and what that means.

 

Unless there is some other reason to keep you at the current job, like they have the best coffee in the world, it sounds like the new offer is definitely better.

[One Wet Bandit]

thanks for  your responses.  It will initially be a longer drive until I move (currently 30 miles but can be an hour in rush hour), but I plan on moving in june and I don't think this new job will stay open until then. Since i wont have a 401k will a traditional IRA be worth it now or can I not deduct it since my wife has a 401k thru her job?

[jfoxcpacfp]

One Wet Bandit wrote:

Since i wont have a 401k will a traditional IRA be worth it now or can I not deduct it since my wife has a 401k thru her job?

Click to expand...

Sorry, but n/a for you. No deductionl unless your AGI < $196k, then not fully deductible unless your AGI < $186k.

[One Wet Bandit]

thanks.  had another job look enticing with better pay and a 401k,  only 3 calls a month (with option for more pay for more calls) but due to spouse's health issues i think no call is more of a priority than pay for me right now.  weird to write that on a financial blog, but I'm reminded of the post of someone last month who had a colleague die at an early age just after achieving FI.