Employer X vs Employer Y - which is better?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Topic Author
doss
Posts: 394
Joined: Tue Nov 01, 2011 9:52 am

Employer X vs Employer Y - which is better?

Post by doss »

Lets say two jobs pay a $170k salary.

Job X has a pretax medical insurance deduction from payroll each month at $339.50 (family plan)

Job Y has a pretax medical insurance deduction from payroll biweekly at $295.15 (family plan)

The Job X employee can contribute up to 16% of salary after 1 year of service. The employer matches 100% up to 4% of the contribution which is vested immediately.

For Job Y, the employer will make a matching contribution equal to 100% of employee's salary deferrals that do not exceed 6% of his/her compensation. This contribution is 100% vested at the start.

Which is the better job ?
“ The long-term 9%-10% nominal return of the stock market INCLUDES the crashes.” — calvin+hobbs
mortfree
Posts: 2515
Joined: Mon Sep 12, 2016 7:06 pm

Re: Employer X vs Employer Y - which is better?

Post by mortfree »

doss wrote: Thu Apr 26, 2018 1:32 pm Lets say two jobs pay a $170k salary.

Which is the better job ?
this is where you lost me...

however, is it Job Y?
User avatar
archbish99
Posts: 1646
Joined: Fri Jun 10, 2011 6:02 pm

Re: Employer X vs Employer Y - which is better?

Post by archbish99 »

As to the details you've given on the compensation, there's more to it.
  • If X's insurance is 12x$339.50 = $4,074/year and Y's insurance is 26x$295.15=$7674/year, that's a substantial difference. Is the coverage also substantially different? Which one better suits your medical needs?
  • For the 401k (I assume), Y contributes an extra $3400/year to the 401k versus X, plus at X you can't contribute (or get a match) for the first year. That's a substantial down-side at X.
The money you lose on the insurance at Y, you get back in a higher 401k match. If the insurance coverage is comparable, I'd say these are a wash. If you don't anticipate being there very long, I'd definitely go with Y to avoid having to take a year off from the 401k, unless you can arrange to max out your 2018 contributions at your current job before you switch.

The compensation is close enough that you've really nailed the right question at the end, but it's not a question any of us can answer for you. Which is the better job?
I'm not a financial advisor, I just play one on the Internet.
soccerrules
Posts: 1066
Joined: Mon Nov 14, 2016 4:01 pm

Re: Employer X vs Employer Y - which is better?

Post by soccerrules »

let's see
Salary : same
Health Cost: (assuming same coverage/company) Job Y is $3000 in pre-tax expense higher than Job X
401K : Job X - 50% higher match over Job Y - but 1 year delay in being eligible for plan
Job Y- 401K eligible day 1- 33% less match
Vesting is same since they are both day 1 of eligibility

This assumes all the other factors and intangibles (commute, boss, size of company, growth potential, etc etc etc) are equal. These to me are as important.

Just using your criteria I would go with Job X.
$3000+ difference in Health Cost -- that is a yearly gain (assuming both health costs increase the same)
You can still save after tax since you are not eligible for 401K for 12 months
50% Higher matching -- longer term better
Don't let your outflow exceed your income or your upkeep will be your downfall.
JStephens
Posts: 65
Joined: Sat Dec 01, 2012 3:48 pm

Re: Employer X vs Employer Y - which is better?

Post by JStephens »

Job Y's match basically cancels out the insurance difference and you can start it a year earlier.

Edit: misread OP
Post Reply