Should I walk away from nice pension? Is it worth it?

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Invictus002
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Should I walk away from nice pension? Is it worth it?

Post by Invictus002 »

I had greats inputs in my previous thread.
viewtopic.php?f=2&t=333570
As suggested, shopped around. Got many 6 offers, but one is very tempting and would like some opinions on switching.


Company:
Federal Contractor.
Been around with different names for about 40 years.
Size: 3k employees, decent size for my locale.
Operate an entire Federal facility from janitors to Chiefs.
No security Clearance necessary (anyways, I can get one)

Pros:
Pay: $15k more, but private, no pension.
Role: senior/lead role (slightly better than now), possibility to hire 2 people under me.
Work: Will be implementing things from scratch, so, I have some say to lay the foundation.
Will be working on sort of older technology (which I know), No Cloud or new tecnologies.
Culture: no idea on reality, but looks like sort of laid back, boss seems to be ok. management heavy.

Cons:
Pension: None, If I take this job, I will lose the ability to retire at 52. I possibly can retire at 62, with some pension from my 16 years of service.
401k: 3% match, nothing else, will pay into Social Security.
Other Benefits: PTOs are very low (80h/yr), compared to what I have now (300h/yr).
Private at-will employment (unlike now, civil service)
Will be working on sort of older technology (which I know well), nothing cloud or new.
WFH: No options, at desk after COVID
Stability/WL balance: Looks ok from outside, don't know reality, some say lot of work, some say its ok etc.,

Questions:
It's hard to think of walking away from a nice pension and benefits, solid job, possibility to retire at 52.
Don't want to make hasty decision just because of some bosses that insults or is a roadblock / micromanage.
Been in same job, change is hard to think through, sort of wary of risking at 38, in the private industry.
Afraid to break away from the routine I have been having well over a decade.

making the move - Is it worth it in the grand scheme of life? (priorities are in my other thread)

I feel like I am/will give up lots of opportunities, all for a pension at 52 (for next 13 yrs) - is it worth it?
Last edited by Invictus002 on Thu Jan 14, 2021 5:57 pm, edited 1 time in total.
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anon_investor
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Re: Should I walk away from nice pension? Is it worth it?

Post by anon_investor »

Invictus002 wrote: Thu Jan 14, 2021 1:16 pm I had greats inputs in my previous thread.
viewtopic.php?f=2&t=333570
As suggested, shopped around. Got many 6 offers, but one is very tempting and would like some opinions on switching.


Company:
Federal Contractor.
Been around with different names for about 40 years.
Size: 3k employees, decent size for my locale.
Operate an entire Federal facility from janitors to Chiefs.
No security Clearance necessary (anyways, I can get one)

Pros:
Pay: $15k more, but private, no pension.
Role: senior/lead role (slightly better than now), possibility to hire 2 people under me.
Work: Will be implementing things from scratch, so, I have some say to lay the foundation.
Will be working on sort of older technology (which I know), No Cloud or new tecnologies.
Culture: no idea on reality, but looks like sort of laid back, boss seems to be ok. management heavy.

Cons:
Pension: None, I will lose the ability to retire at 52. I possibly can retire at 62, with some pension from my 16 years of service.
401k: 3% match, nothing else, will pay into Social Security.
Other Benefits: PTOs are very low (80h/yr), compared to what I have now (300h/yr).
Private at-will employment (unlike now, civil service)
Will be working on sort of older technology (which I know well), nothing cloud or new.
WFH: No options, at desk after COVID
Stability/WL balance: Looks ok from outside, don't know reality, some say lot of work, some say its ok etc.,

Questions:
It's hard to think of walking away from a nice pension and benefits, solid job, possibility to retire at 52.
Don't want to make hasty decision just because of some bosses that insults or is a roadblock / micromanage.
Been in same job, change is hard to think through, sort of wary of risking at 38, in the private industry.
Afraid to break away from the routine I have been having well over a decade.

making the move - Is it worth it in the grand scheme of life? (priorities are in my other thread)

I feel like I am/will give up lots of opportunities, all for a pension at 52 (for next 13 yrs) - is it worth it?
For only $15k a year? Leaving your current position sounds like a TERRIBLE idea based on what you are listing.
Jack FFR1846
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Re: Should I walk away from nice pension? Is it worth it?

Post by Jack FFR1846 »

From your other thread, one reply had a particularly telling line:
Also remember there's ageism in the tech sector.
Absolutely! I worked for one of the big tech companies and they absolutely had a program to push out anyone over 50. In my case, I went from reviews year after year of "exceeds" and even won a top 5% of the company award to literally over Christmas/New Year break to various made up excuses why I "does not meet expectations". I assure you, this had nothing to do with me, besides becoming older. A number of employees contacted a lawyer to go after the company, but after initial filings, that attorney gave up because the big tech company has more lawyers than he could possibly win against.

I hear that gov jobs have protections. Private absolutely does not and if you think they do, you're being naive. My take was that the company literally had their personnel listing spit out a list of old people to push out at the start of the year. It was like a light switch.
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Aged Maduro
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Re: Should I walk away from nice pension? Is it worth it?

Post by Aged Maduro »

The short answer is no. My experience is that the public sector beats private sector by every objective measure. Work/life balance, lower stress, friendlier atmosphere, no outsourcing or relocation, job security and outstanding health and retirement benefits. The ONLY thing typically better in private sector positions is the higher salary, but that is offset by working more hours in a more stressful environment.

Be proud of your government job. Years ago when i was growing up working for the government was seen as the booby prize. Not anymore. Civil service careers are a prize. It's like winning the lottery. Working in the private sector has become a nightmare. Young people understand this and they are now clamoring to get in and work in state or federal government. Think about it...you will be able to retire at 52 years of age. How many lawyers or doctors do you know that can do that? I would stay put. You've got it made.
Last edited by Aged Maduro on Thu Jan 14, 2021 1:39 pm, edited 1 time in total.
surfstar
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Re: Should I walk away from nice pension? Is it worth it?

Post by surfstar »

Oh, HECK NO!
Lose all that PTO and pension?

Work-life BALANCE -- as in work shouldn't exceed 50% ;)

Additionally - health insurance costs? Possible retiree healthcare?
123
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Re: Should I walk away from nice pension? Is it worth it?

Post by 123 »

Aged Maduro wrote: Thu Jan 14, 2021 1:34 pm The short answer is no. My experience is that the public sector beats private sector by every objective measure...Think about it...you will be able to retire at 52 years of age. How many lawyers or doctors do you know that can do that? I would stay put. You've got it made.
+1 Yeah your life is a lot better than you appreciate.
The closest helping hand is at the end of your own arm.
huskerfan1414
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Re: Should I walk away from nice pension? Is it worth it?

Post by huskerfan1414 »

Glad you asked for some perspective before making a decision, OP.


Since you did, I'll offer an opinion:
You'd be crazy to leave your current job and pension/ability to retire at 52.


Pray and think about your decision and once made, live with and enjoy it.
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THY4373
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Re: Should I walk away from nice pension? Is it worth it?

Post by THY4373 »

Aged Maduro wrote: Thu Jan 14, 2021 1:34 pm The short answer is no. My experience is that the public sector beats private sector by every objective measure. Work/life balance, lower stress, friendlier atmosphere, no outsourcing or relocation, job security and outstanding health and retirement benefits. The ONLY thing typically better in private sector positions is the higher salary, but that is offset by working more hours in a more stressful environment.
The public (even just Federal) and private sectors are far too diverse to make generalizations like this. I left the Federal Civil Service years ago and don't regret it one bit. YMMV of course. That said in this case given what OP has posted I'd stick with the government position.
daheld
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Re: Should I walk away from nice pension? Is it worth it?

Post by daheld »

Losing hundreds of hours of paid time off, a pension and a decade of retirement time is not worth $15k/year.

I am a fed, and it would take a TON of money for me to willingly give up my benefits, especially the pension.
Aged Maduro
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Re: Should I walk away from nice pension? Is it worth it?

Post by Aged Maduro »

THY4373 wrote: Thu Jan 14, 2021 2:23 pm
Aged Maduro wrote: Thu Jan 14, 2021 1:34 pm The short answer is no. My experience is that the public sector beats private sector by every objective measure. Work/life balance, lower stress, friendlier atmosphere, no outsourcing or relocation, job security and outstanding health and retirement benefits. The ONLY thing typically better in private sector positions is the higher salary, but that is offset by working more hours in a more stressful environment.
The public (even just Federal) and private sectors are far too diverse to make generalizations like this. I left the Federal Civil Service years ago and don't regret it one bit. YMMV of course. That said in this case given what OP has posted I'd stick with the government position.
Of course there are exceptions and no two agencies are alike. All i know is that if i had to choose between two different jobs sight unseen, and one was a government job at 60k and the other was a megacorp job at 100k, i would take the government job hands down.
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jeffyscott
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Re: Should I walk away from nice pension? Is it worth it?

Post by jeffyscott »

Invictus002 wrote: Tue Dec 22, 2020 9:39 pmAnother 13 years to retire with 75% of pay as pension - payout starts immediately ~@age 52, when staying course.
I don't know what your contributions are toward this pension are or what the pay level is, but the pension benefit (assuming it can not be changed) seems likely to be worth more than the $15K.

In addition, the private employment will most likely come with less time off from both less vacation time and an expectation that you will work more than 40 hours per week. I would not be surprised if the private job ends up with a lower hourly rate.

I briefly flirted with leaving my government job, probably at about the same age/experience as you. At one interview, the guy said something like: "you won't be walking out at 4:30 with the secretaries" and I was thinking "so, would it be 4, then :?: ". I think that maybe came up when he asked what I liked about my current job and I mentioned something about "flex-time" (under which my hours were 6:30-3 and I was home before our kids got home from school). I never even got to the point of salary for either of 2 jobs I interviewed for. I chickened out in before getting any offers, decided to keep the pension and deal with having a boring/tedious job for another 15-20 years, in order to retire at 57 at about 1/2 pay and with about 7-8 years of health insurance coverage. And now I'm free as of a few years ago.
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THY4373
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Re: Should I walk away from nice pension? Is it worth it?

Post by THY4373 »

Aged Maduro wrote: Fri Jan 15, 2021 9:54 am Of course there are exceptions and no two agencies are alike. All i know is that if i had to choose between two different jobs sight unseen, and one was a government job at 60k and the other was a megacorp job at 100k, i would take the government job hands down.
And I'd make the exact opposite decision and in fact I have (I have had a Federal agency I work with reach out to me about moving over but the $$ just don't add up). $15k is not enough in and of itself to get me to move a job without other variables but $40k easily is. I work in the private sector get six weeks of leave a year, a pension all paid by employer, 7% match on 401k, my 401k also offers the mega-backdoor Roth option, retiree health insurance though only to 65 unlike the federal service (I have to go on Medicare as primary then), live in a medium cost city and make into SES territory on salary while being just a manager (not an executive). I work 40 hours a week, full-time from home and my job is relatively location agnostic so I am free to move to other areas. Talking about averages doesn't tell folks much about a particular decision because it can be so variable. YMMV
adamthesmythe
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Re: Should I walk away from nice pension? Is it worth it?

Post by adamthesmythe »

If you saved enough of the raise to make up for not getting the pension would you be ahead?

> Will be working on sort of older technology (which I know well), nothing cloud or new.

This does not sound like a recipe for remaining up to date and employable in the future.
jerrysmith
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Re: Should I walk away from nice pension? Is it worth it?

Post by jerrysmith »

It would take a massive raise for me to leave my pension gig. Salaries/401ks are great but guaranteed money is hard to beat.
humblecoder
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Re: Should I walk away from nice pension? Is it worth it?

Post by humblecoder »

If it were me, I would stay with your current job. I don't see anything about this new position which is superior other than the $15K salary bump and some additional responsibility (managing two people).

You are giving up your pension
You are giving up a lot of vacation time
You are working in older technology, so you aren't advancing your skills/career

I don't know you, but based upon this thread and your previous thread (which I also responded to), you seem to be suffering from the "grass is greener" syndrome. You somehow have it in your head that there is something better out there for you and you have this fear of missing out on that "something better" because you just don't know. Consider that there is a reason why people are overwhelming you telling you to stay. It's because you have it good and just don't realize it. I'm sure most people would kill for a great pension, working with cloud tech, 7.5 weeks/year of time off, great work life balance, so they are wondering why you want to give up on that for $15K.

If you said that you would make an additional $150K, then maybe opinions would be different, but there is no way that I personally would give up those great job benefits for such a small amount of money.

Also, I think you said that you are married. Have you talked to your spouse about this to get his/her opinion? Whatever you decide is going to greatly impact your spouse. Your spouse might not be thrilled with having you have less vacation time, having to work more hours and for more years, etc.

Good luck with whatever you choose!
Beehave
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Re: Should I walk away from nice pension? Is it worth it?

Post by Beehave »

The job you discuss leaving for is not the job you take mid-career. It is the job you take after you've maxed out your retirement benefits (and pension) and you feel like collecting pension plus some additional earnings for a couple of years to absolutely solidify your retirement.

DO NOT leave your job for a consulting gig that is not using advanced technologies. Your job skills will be rotting on the vine as you age. And this is in the tech field. And this is with an employer supplying commodity-type services to the government.

Based on the info provided I recommend (most strongly!!!) not leaving for the position described for the reasons stated in other replies and the considerations above. Taking the new job described sounds like blindfolding yourself and walking the plank to me.
delamer
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Re: Should I walk away from nice pension? Is it worth it?

Post by delamer »

I can’t imagine giving up 300 hours of annual leave to go to 80 hours.

I retired from the federal government and worked at 3 different jobs by moving between agencies. The work changed enough to keep things interesting, and I got to keep my seniority and benefits. To me, the ability to make those kind of moves is an underrated aspect of employment with a large government.

Consider looking around within your current government employer.
GrowthSeeker
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Re: Should I walk away from nice pension? Is it worth it?

Post by GrowthSeeker »

Ways of thinking about it.

Retiring at 52 (or being able to) is a lot better than retiring at 62.

An exercise you might do is to calculate the present value of your future pension if you stay at your current public sector job - just a different perspective. Similarly, what size portfolio in your chosen AA (at whatever age the pension would begin) would spin off a cash flow equal to the pension. How about if that AA is "safer" than your regular AA since a government pension, once started, is essentially zero risk.

One might expect that if future U.S. econommic stresses increase, public sector will be more secure than private sector.
OTOH, while the current offer is just a $15K increase, if in the private sector there might be the possibility of leapfrogging to other companies every 5 years to bigger and better deals.

Weigh the hatred of current job vs the fear of the less certain private sector.
Just because you're paranoid doesn't mean they're NOT out to get you.
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Invictus002
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Re: Should I walk away from nice pension? Is it worth it?

Post by Invictus002 »

humblecoder wrote: Fri Jan 15, 2021 11:41 am If it were me, I would stay with your current job. I don't see anything about this new position which is superior other than the $15K salary bump and some additional responsibility (managing two people).

You are giving up your pension
You are giving up a lot of vacation time
You are working in older technology, so you aren't advancing your skills/career

I don't know you, but based upon this thread and your previous thread (which I also responded to), you seem to be suffering from the "grass is greener" syndrome. You somehow have it in your head that there is something better out there for you and you have this fear of missing out on that "something better" because you just don't know. Consider that there is a reason why people are overwhelming you telling you to stay. It's because you have it good and just don't realize it. I'm sure most people would kill for a great pension, working with cloud tech, 7.5 weeks/year of time off, great work life balance, so they are wondering why you want to give up on that for $15K.

If you said that you would make an additional $150K, then maybe opinions would be different, but there is no way that I personally would give up those great job benefits for such a small amount of money.

Also, I think you said that you are married. Have you talked to your spouse about this to get his/her opinion? Whatever you decide is going to greatly impact your spouse. Your spouse might not be thrilled with having you have less vacation time, having to work more hours and for more years, etc.

Good luck with whatever you choose!
@humblecoder

Wow! You, put it exactly. The grass is greener syndrome - I bet I am suffering from it. I need a cure.

I feel, the people around me and oooos! and aaahs! from other cloud people (private sector), are making me feel like I am missing out on something.

If I closely examine my situation, I don't think, I am missing out on anything. I get to realize my priorities, progress towards retirement goals and also work on latest tech.

My spouse is also in the opinion, that is sounded in this thread by others. My spouse is also part of the same retirement system and possibly can retire at similar age and similar pension and similar pay levels.

The next 13-14 years are also the major school years for the kids and by the time we retire, they will be in college.

Realistically, we are looking out how to successfully work next 13-14 years at the same employer, get kids to college, stay healthy and retire.

I also feel the stability can help us give confidence in taking on some riskier investments to realize better gains.

If things go as planned, once we start receiving full pension, we might not have the need to tap into any of our savings (estimated ~ $3.2M), which sounds too good.
systemr
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Re: Should I walk away from nice pension? Is it worth it?

Post by systemr »

Haha you would be crazy to take it, lose pension and the PTO. 300hrs is 37.5 days! The extra 27.5 days at your current job is equivalent to a 7.5% pay decrease and I'm guessing its very possible to actually take them all in a fed job.
palaheel
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Re: Should I walk away from nice pension? Is it worth it?

Post by palaheel »

I tend to agree with the others about staying being the more appealing choice. But I have to ask: How safe is the pension?
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LittleMaggieMae
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Re: Should I walk away from nice pension? Is it worth it?

Post by LittleMaggieMae »

I'm in the just tough it out for 13 more years.

Some questions - do you know what your pension will be worth (per year) if you quit tomorrow?

When you jump to a "no pension" job - how much of your income will you need to be putting into the 401K? I'm assuming you will need to max it. What other tax advantaged stuff will you need to fund? How much will health insurance cost (out of your paycheck) at your new employer?
If you aren't contributing to SS - how much will that be? Will your new net pay be the same (hopefully) as your current net pay (after all your "deductions/savings"?

I'm guessing your don't "loose" your pension if you quit today - it will just be smaller (and you may have to wait until you are some specific age to take it. Have you figured out how much you will need to invest every year (401K/Roth/HSA/after tax)in order to retire?

I'm assuming that if at 52 you start collecting your pension - you could still go take another job? Or could you take another job and delay taking your pension (maybe wait to take the pension at 55 or 60)?

Just because you are drawing a pension - doesn't mean you are "retired". I know plenty of fire/police who transitioned into their "second job" job or some other job after "retiring" from the force. I know teachers (who started when 23-25yo ) and who 'retired' at 55 (with awesome pensions/healthcare) who took up other occupations/jobs that made them happy.
LittleMaggieMae
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Re: Should I walk away from nice pension? Is it worth it?

Post by LittleMaggieMae »

I'm in the just tough it out for 13 more years.

Some questions - do you know what your pension will be worth (per year) if you quit tomorrow?

When you jump to a "no pension" job - how much of your income will you need to be putting into the 401K? I'm assuming you will need to max it. What other tax advantaged stuff will you need to fund? How much will health insurance cost (out of your paycheck) at your new employer?
If you aren't contributing to SS - how much will that be? Will your new net pay be the same (hopefully) as your current net pay (after all your "deductions/savings"?

I'm guessing your don't "loose" your pension if you quit today - it will just be smaller (and you may have to wait until you are some specific age to take it. Have you figured out how much you will need to invest every year (401K/Roth/HSA/after tax)in order to retire?

I'm assuming that if at 52 you start collecting your pension - you could still go take another job? Or could you take another job and delay taking your pension (maybe wait to take the pension at 55 or 60)?

Just because you are drawing a pension - doesn't mean you are "retired". I know plenty of fire/police who transitioned into their "second job" job or some other job after "retiring" from the force. I know teachers (who started when 23-25yo ) and who 'retired' at 55 (with awesome pensions/healthcare) who took up other occupations/jobs that made them happy. I suspect I know a few retired military types too. They are in their 50's and have day jobs/side gigs that do not appear to be able to pay for their lifestyle - so I suspect they are collecting a pension. All of these people seem to be rather content with their lives and look forward to the future.
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anon_investor
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Re: Should I walk away from nice pension? Is it worth it?

Post by anon_investor »

Invictus002 wrote: Fri Jan 15, 2021 12:34 pm
humblecoder wrote: Fri Jan 15, 2021 11:41 am If it were me, I would stay with your current job. I don't see anything about this new position which is superior other than the $15K salary bump and some additional responsibility (managing two people).

You are giving up your pension
You are giving up a lot of vacation time
You are working in older technology, so you aren't advancing your skills/career

I don't know you, but based upon this thread and your previous thread (which I also responded to), you seem to be suffering from the "grass is greener" syndrome. You somehow have it in your head that there is something better out there for you and you have this fear of missing out on that "something better" because you just don't know. Consider that there is a reason why people are overwhelming you telling you to stay. It's because you have it good and just don't realize it. I'm sure most people would kill for a great pension, working with cloud tech, 7.5 weeks/year of time off, great work life balance, so they are wondering why you want to give up on that for $15K.

If you said that you would make an additional $150K, then maybe opinions would be different, but there is no way that I personally would give up those great job benefits for such a small amount of money.

Also, I think you said that you are married. Have you talked to your spouse about this to get his/her opinion? Whatever you decide is going to greatly impact your spouse. Your spouse might not be thrilled with having you have less vacation time, having to work more hours and for more years, etc.

Good luck with whatever you choose!
@humblecoder

Wow! You, put it exactly. The grass is greener syndrome - I bet I am suffering from it. I need a cure.

I feel, the people around me and oooos! and aaahs! from other cloud people (private sector), are making me feel like I am missing out on something.

If I closely examine my situation, I don't think, I am missing out on anything. I get to realize my priorities, progress towards retirement goals and also work on latest tech.

My spouse is also in the opinion, that is sounded in this thread by others. My spouse is also part of the same retirement system and possibly can retire at similar age and similar pension and similar pay levels.

The next 13-14 years are also the major school years for the kids and by the time we retire, they will be in college.

Realistically, we are looking out how to successfully work next 13-14 years at the same employer, get kids to college, stay healthy and retire.

I also feel the stability can help us give confidence in taking on some riskier investments to realize better gains.

If things go as planned, once we start receiving full pension, we might not have the need to tap into any of our savings (estimated ~ $3.2M), which sounds too good.
$15k/yr is too little to give up everything you have. It is only worth changing jobs if you IMPROVE your situation.
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slow n steady
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Re: Should I walk away from nice pension? Is it worth it?

Post by slow n steady »

14 years till you're done for life compared to maybe 20 or more years with less job stability along the way? Keep your eye on the prize. If the pension is worth over 75K for the rest of your life and you live 40 more years, that is a multi-million dollar pension. Consider that as part of your wages now and you would need at least a 100K pay bump before you start looking at leaving.

Let us know what you decide.

Good Luck!
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Re: Should I walk away from nice pension? Is it worth it?

Post by Grt2bOutdoors »

Invictus002 wrote: Fri Jan 15, 2021 12:34 pm
humblecoder wrote: Fri Jan 15, 2021 11:41 am If it were me, I would stay with your current job. I don't see anything about this new position which is superior other than the $15K salary bump and some additional responsibility (managing two people).

You are giving up your pension
You are giving up a lot of vacation time
You are working in older technology, so you aren't advancing your skills/career

I don't know you, but based upon this thread and your previous thread (which I also responded to), you seem to be suffering from the "grass is greener" syndrome. You somehow have it in your head that there is something better out there for you and you have this fear of missing out on that "something better" because you just don't know. Consider that there is a reason why people are overwhelming you telling you to stay. It's because you have it good and just don't realize it. I'm sure most people would kill for a great pension, working with cloud tech, 7.5 weeks/year of time off, great work life balance, so they are wondering why you want to give up on that for $15K.

If you said that you would make an additional $150K, then maybe opinions would be different, but there is no way that I personally would give up those great job benefits for such a small amount of money.

Also, I think you said that you are married. Have you talked to your spouse about this to get his/her opinion? Whatever you decide is going to greatly impact your spouse. Your spouse might not be thrilled with having you have less vacation time, having to work more hours and for more years, etc.

Good luck with whatever you choose!
@humblecoder

Wow! You, put it exactly. The grass is greener syndrome - I bet I am suffering from it. I need a cure.

I feel, the people around me and oooos! and aaahs! from other cloud people (private sector), are making me feel like I am missing out on something.

If I closely examine my situation, I don't think, I am missing out on anything. I get to realize my priorities, progress towards retirement goals and also work on latest tech.

My spouse is also in the opinion, that is sounded in this thread by others. My spouse is also part of the same retirement system and possibly can retire at similar age and similar pension and similar pay levels.

The next 13-14 years are also the major school years for the kids and by the time we retire, they will be in college.

Realistically, we are looking out how to successfully work next 13-14 years at the same employer, get kids to college, stay healthy and retire.

I also feel the stability can help us give confidence in taking on some riskier investments to realize better gains.

If things go as planned, once we start receiving full pension, we might not have the need to tap into any of our savings (estimated ~ $3.2M), which sounds too good.
You’d be insane to give up the pension! How insane? Let’s do the math - I’ll keep it simple, most government employers are kicking in 18 to 25 percent of gross salary just for pension plan. Your healthcare benefits are another 7-10 percent. That’s anywhere from 25-35 percent of gross that you aren’t seeing but it’s there! Now, you are telling us you are seriously considering taking a 15-22 percent reduction in retirement benefits for an unstable job in return for $15K pre-tax?? STOP right there, do not pass Go!

Why would you give up the Wonka Golden ticket for a handout from Slugworth? Isn’t a lifetime pension enough reason to say no? I know it’s not chocolate but it will provide security.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
71GTO
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Re: Should I walk away from nice pension? Is it worth it?

Post by 71GTO »

Don’t leave for all the above reasons! I work for a state government for 15 years. My pension is no where as good a deal as yours. Every time I think about looking to see if there is something else I see an article about layoffs at a big company is in the news and I say to myself I’m not leaving. Since I’ve been there almost no one has left for a private sector job. Even after my state overhauled the benefits and new hires get a little less generous deal still no one leaves.
totality
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Re: Should I walk away from nice pension? Is it worth it?

Post by totality »

Invictus002 wrote: Thu Jan 14, 2021 1:16 pm Other Benefits: PTOs are very low (80h/yr), compared to what I have now (300h/yr).
Oh geez OP, think very hard about this. You have an exceptionally good PTO setup now, and you'd be going to 2 weeks/year.

Is $15k enough for you to work an extra 5.5 weeks a year?

Put another way, if you went into work tomorrow and your current employer offered you $15K to buy out 220 hours of PTO, would you take it?
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dziuniek
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Re: Should I walk away from nice pension? Is it worth it?

Post by dziuniek »

Invictus002 wrote: Thu Jan 14, 2021 1:16 pm I had greats inputs in my previous thread.
viewtopic.php?f=2&t=333570
As suggested, shopped around. Got many 6 offers, but one is very tempting and would like some opinions on switching.


Company:
Federal Contractor.
Been around with different names for about 40 years.
Size: 3k employees, decent size for my locale.
Operate an entire Federal facility from janitors to Chiefs.
No security Clearance necessary (anyways, I can get one)

Pros:
Pay: $15k more, but private, no pension.
Role: senior/lead role (slightly better than now), possibility to hire 2 people under me.
Work: Will be implementing things from scratch, so, I have some say to lay the foundation.
Will be working on sort of older technology (which I know), No Cloud or new tecnologies.
Culture: no idea on reality, but looks like sort of laid back, boss seems to be ok. management heavy.

Cons:
Pension: None, If I take this job, I will lose the ability to retire at 52. I possibly can retire at 62, with some pension from my 16 years of service.
401k: 3% match, nothing else, will pay into Social Security.
Other Benefits: PTOs are very low (80h/yr), compared to what I have now (300h/yr).
Private at-will employment (unlike now, civil service)
Will be working on sort of older technology (which I know well), nothing cloud or new.
WFH: No options, at desk after COVID
Stability/WL balance: Looks ok from outside, don't know reality, some say lot of work, some say its ok etc.,

Questions:
It's hard to think of walking away from a nice pension and benefits, solid job, possibility to retire at 52.
Don't want to make hasty decision just because of some bosses that insults or is a roadblock / micromanage.
Been in same job, change is hard to think through, sort of wary of risking at 38, in the private industry.
Afraid to break away from the routine I have been having well over a decade.

making the move - Is it worth it in the grand scheme of life? (priorities are in my other thread)

I feel like I am/will give up lots of opportunities, all for a pension at 52 (for next 13 yrs) - is it worth it?
My state pension is worth quite a bit to me even though it's not what it used to be in the past.
If I take it early at 58 it's $17k per year
If I take it normal* age it's $40k per year
(assuming it doesnt change and I work there until then)

... So at 63 years old that's like having a Million bucks saved.

Or conversly... that's 1M I don't need to save or worry about converting into an income stream.
unbiased
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Re: Should I walk away from nice pension? Is it worth it?

Post by unbiased »

Get the pension.

Retire at 52 -- find a job then that makes $15k if you feel you need the extra income. These are gold mines.
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simplesimon
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Re: Should I walk away from nice pension? Is it worth it?

Post by simplesimon »

It may help to provide more numbers to better quantify the trade-off.

I went to immediateannuities.com to price a SPIA for a 52-year old that pays $4,700/month (assuming you make $75k/year when you retire x 75%). It would cost $1.3 million. Throw that figure into a financial calculator with an assumption of 3% inflation adjusted returns over 13 years and you get...$83k/year. This is assuming you currently have no vested benefit (if you leave today, do you lose the pension completely?).

Compare $83k to the $15k salary bump, the social security contribution, and the 401k match...guessing that is going to be hard to beat...and the number gets bigger if you're making more than $75k.
renegade06
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Re: Should I walk away from nice pension? Is it worth it?

Post by renegade06 »

Agree with all the other comments. Don’t leave this position - not for the current offer on the table, at least.
Saving$
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Re: Should I walk away from nice pension? Is it worth it?

Post by Saving$ »

No way is this offer deal good for you at all.

Its not a financial improvement, its not a career improvement, and from your description, its' not a lifestyle improvement. In fact its a downgrade on each of those.

You get 300 hours PTO and the new company is offering you $15k more for only 80 hours PTO
Most here would trade $15k for 220 hours of PTO any day.
All else aside, you are selling your PTO for $68/hour. Not worth it. This new company will bill you out at multiples of that.

Then take the pension issue by itself
Most here would trade $15k of income for a guaranteed pension any day.
phxjcc
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Re: Should I walk away from nice pension? Is it worth it?

Post by phxjcc »

At your age, I went from secure nice job to NYC big deal job.

Could have hung on the end with company that was clearly being set up to be shut down.
It took them ten years longer than they thought, paid everyone retention bonuses and advanced everyone's seniority to a minimum of 20 years...I would have had 25.

My pension would have been greater that my SS.

Net/net...stay
Jump after 52 if you want to gamble.
heyyou
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Re: Should I walk away from nice pension? Is it worth it?

Post by heyyou »

by simplesimon » Fri Jan 15, 2021 7:49 pm
It may help to provide more numbers to better quantify the trade-off.
I went to immediateannuities.com to price a SPIA for a 52-year old that pays $4,700/month (assuming you make $75k/year when you retire x 75%). It would cost $1.3 million. Throw that figure into a financial calculator with an assumption of 3% inflation adjusted returns over 13 years and you get...$83k/year. This is assuming you currently have no vested benefit (if you leave today, do you lose the pension completely?).

Compare $83k to the $15k salary bump, the social security contribution, and the 401k match...guessing that is going to be hard to beat...and the number gets bigger if you're making more than $75k.
Well said.
OP,
Wait until your earliest full retirement age, then look at other jobs if you want to keep working, as mentioned just above while I was composing this posting. Maybe read up about mid-life dissatisfaction to see if any of your thinking matches that info.
rich126
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Re: Should I walk away from nice pension? Is it worth it?

Post by rich126 »

Unless you detest your current job, I think leaving would be a decision you regret. I speak as someone who has left federal jobs twice. In my case retirement would not be until 56. The first time I left after 15 years so I was far from retirement. The second time I made sure to qualify for benefits.

I recall working with a guy at a large contractor and he once told me he should have listened to his father and taken a government job because he could have been retired by then.

I enjoyed my time away and never was unemployed or worked long hours but I was lucky. For some people the lack of job security is huge and the loss of vacation time is big. I'm not saying all non government jobs are bad but most large contractors are not that different from government jobs with bureaucracy, bad management, etc. and unless you really need the extra money it isn't worth it in my opinion. Small contractors can provide similar benefits to the government minus the pension but they can have issues with contracts and you may have to move around. Now if you can get a nice high tech job like at a FAANG company things can be very different.
Tracker968
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Re: Should I walk away from nice pension? Is it worth it?

Post by Tracker968 »

I recently retired with a pension. It is very comforting to see that pension check come in every month.
For me it is worth a lot more than just the monetary value. It is also a stress reducer.
afan
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Re: Should I walk away from nice pension? Is it worth it?

Post by afan »

It would be possible for a private sector job to be better than the position you have. But what you describe does not sound anywhere close to equal, let alone better. That pension is worth a lot, as is the job stability. You would have to NPV the present value of the pension and the expected benefits. With the poor retirement plan, the private job would need to pay MUCH more than your job. Hard do say how much more. Almost certainly would have to involve AT LEAST a 30% raise, but that may not be enough.

As presented, no way you should take this job.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama
MSORSA
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Re: Should I walk away from nice pension? Is it worth it?

Post by MSORSA »

I'm sorry but you will not be making $15k more. In reality you are taking a huge pay cut since you are losing pension and benefits.
6 years ago I took a $30k pay cut just to get into the Federal Government. Worth every penny. Even if they offer me 100k more than I make now, I'll stay in the government. Pension + PTO + job security + quality of life = No way in hell I'll ever go Private Industry again. I worked 8 years as a Contractor.
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calmaniac
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Re: Should I walk away from nice pension? Is it worth it?

Post by calmaniac »

I ❤️ my pension.

OP, although I can sense you are somewhat dissatisfied with your current federal job, it does not sound like the private job is lighting you up either. That said, if your federal job is eating away at your soul, time to leave.

I "retired" at 58 with maximal military pension benefits and enough assets to never work another day. Took 6 months off and a start-up company offered me the perfect job. Very engaging and fun job, very good money; if start-up goes big lots of $ for our kids & charities, if it crashes and burns DW & I will still be fine.

Pensions are A-mazing. Cash flow is King (or Queen) in retirement. This is hard to fully comprehend until you retire.

If you retire at 52, you will still be quite young and it sounds like you will be financially independent. I have found working after FI to be incredibly liberating. When I feel stressed out or unmotivated with my current job, I tell myself "you don't need to work, so if you don't like this quit, otherwise shut up and get back to work". It's incredibly liberating to be working by choice and not by necessity.

Alternative scenario is to leave the feds for several years, and if the grass is not greener go back and finish out your 13 years. That happens all the time.
63 yo,1y til go part-time. AA 70/30: 30% S&P, 16% value, 14% intl, 10% EM, 30% short/int govt bonds. My mil pension + DW's now ≈60% of expenses. Taking SS @age 70--> pension+SS ≈100% of expenses.
nigel_ht
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Re: Should I walk away from nice pension? Is it worth it?

Post by nigel_ht »

What? For $15K a year? Heck no. If your current position seems meh, look for another at a different agency first.

Seriously, don't move without a huge bump up. You said it yourself...to see a big bump it's going to be FAANG with RSUs. Apply for those, not some random contractor who you'll likely leave (voluntarily or otherwise) when they lose their current contract.

IMHO the only reason to leave, outside of FAANG, is to start your own contractor company and that's usually pretty tough.

If you can, shift toward security. Get your certs (CISSP, CISM, etc), your MS and then look for a GS-13/14 promotable slot. At $115K a year I assume you're a 13 with locality putting you around step 8? Which means you'll top out at $120K or so...and you want to move for $130K?

Nope nope nope.

That there grass looks greener because it's covered in mold. I'm afraid those golden handcuffs are still pretty shiny.
Thegame14
Posts: 1828
Joined: Mon May 07, 2018 11:53 am

Re: Should I walk away from nice pension? Is it worth it?

Post by Thegame14 »

anon_investor wrote: Thu Jan 14, 2021 1:19 pm
Invictus002 wrote: Thu Jan 14, 2021 1:16 pm I had greats inputs in my previous thread.
viewtopic.php?f=2&t=333570
As suggested, shopped around. Got many 6 offers, but one is very tempting and would like some opinions on switching.


Company:
Federal Contractor.
Been around with different names for about 40 years.
Size: 3k employees, decent size for my locale.
Operate an entire Federal facility from janitors to Chiefs.
No security Clearance necessary (anyways, I can get one)

Pros:
Pay: $15k more, but private, no pension.
Role: senior/lead role (slightly better than now), possibility to hire 2 people under me.
Work: Will be implementing things from scratch, so, I have some say to lay the foundation.
Will be working on sort of older technology (which I know), No Cloud or new tecnologies.
Culture: no idea on reality, but looks like sort of laid back, boss seems to be ok. management heavy.

Cons:
Pension: None, I will lose the ability to retire at 52. I possibly can retire at 62, with some pension from my 16 years of service.
401k: 3% match, nothing else, will pay into Social Security.
Other Benefits: PTOs are very low (80h/yr), compared to what I have now (300h/yr).
Private at-will employment (unlike now, civil service)
Will be working on sort of older technology (which I know well), nothing cloud or new.
WFH: No options, at desk after COVID
Stability/WL balance: Looks ok from outside, don't know reality, some say lot of work, some say its ok etc.,

Questions:
It's hard to think of walking away from a nice pension and benefits, solid job, possibility to retire at 52.
Don't want to make hasty decision just because of some bosses that insults or is a roadblock / micromanage.
Been in same job, change is hard to think through, sort of wary of risking at 38, in the private industry.
Afraid to break away from the routine I have been having well over a decade.

making the move - Is it worth it in the grand scheme of life? (priorities are in my other thread)

I feel like I am/will give up lots of opportunities, all for a pension at 52 (for next 13 yrs) - is it worth it?
For only $15k a year? Leaving your current position sounds like a TERRIBLE idea based on what you are listing.
+1
novemberrain
Posts: 635
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Re: Should I walk away from nice pension? Is it worth it?

Post by novemberrain »

Aged Maduro wrote: Fri Jan 15, 2021 9:54 am
THY4373 wrote: Thu Jan 14, 2021 2:23 pm
Aged Maduro wrote: Thu Jan 14, 2021 1:34 pm The short answer is no. My experience is that the public sector beats private sector by every objective measure. Work/life balance, lower stress, friendlier atmosphere, no outsourcing or relocation, job security and outstanding health and retirement benefits. The ONLY thing typically better in private sector positions is the higher salary, but that is offset by working more hours in a more stressful environment.
The public (even just Federal) and private sectors are far too diverse to make generalizations like this. I left the Federal Civil Service years ago and don't regret it one bit. YMMV of course. That said in this case given what OP has posted I'd stick with the government position.
Of course there are exceptions and no two agencies are alike. All i know is that if i had to choose between two different jobs sight unseen, and one was a government job at 60k and the other was a megacorp job at 100k, i would take the government job hands down.
How about a private sector job at 500k in FAANG
Small Savanna
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Re: Should I walk away from nice pension? Is it worth it?

Post by Small Savanna »

I worked as a Fed until I could retire with a FERS pension, and then took a non-Federal job at slightly higher pay. I'm happy with the decision - for now we're saving a lot of money and watching the TSP balance go up, and if work stops being fun, I can quit any time. Beyond the financial pros and cons, do you enjoy the work? If you like your current job and the people you work with, I wouldn't leave it for $15K.
neverpanic
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Re: Should I walk away from nice pension? Is it worth it?

Post by neverpanic »

Invictus002 wrote: Thu Jan 14, 2021 1:16 pm Pros:
Pay: $15k more, but private, no pension.

Cons:
Pension: None, If I take this job, I will lose the ability to retire at 52. I possibly can retire at 62, with some pension from my 16 years of service.[/b]

Other Benefits: PTOs are very low (80h/yr), compared to what I have now (300h/yr).
Conservatively valuing your time at $50/hr x 220 hours given up = $11,000.

So really, your net gain is about $4000/year.

And then you've got to work about 10 years longer.

In the Big Picture, you'd be giving up 10 years of retirement freedom (while still young enough to do a lot with the time) for about $40,000.
Got many 6 offers, but one is very tempting and would like some opinions on switching.
Ok, now let's hear about that one.
Last edited by neverpanic on Tue Jan 19, 2021 2:31 am, edited 1 time in total.
I am not a financial professional or guru. I'm a schmuck who got lucky 10 times. Such is the life of the trader.
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F150HD
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Re: Should I walk away from nice pension? Is it worth it?

Post by F150HD »

may want to put your age in your post.
Other Benefits: PTOs are very low (80h/yr), compared to what I have now (300h/yr).
$15k?.....staying put seems like a slam dunk.

feels like there's outlying info missing here
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F150HD
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Re: Should I walk away from nice pension? Is it worth it?

Post by F150HD »

Thegame14 wrote: Mon Jan 18, 2021 11:23 pm ...
+1
viewtopic.php?p=5711025#p5711025
MathIsMyWayr
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Re: Should I walk away from nice pension? Is it worth it?

Post by MathIsMyWayr »

novemberrain wrote: Mon Jan 18, 2021 11:24 pm How about a private sector job at 500k in FAANG
FAANG will pay $500k to a guy making $115k at fed? Time to sell FAANG stocks.
Thegame14
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Re: Should I walk away from nice pension? Is it worth it?

Post by Thegame14 »

Thegame14 wrote: Mon Jan 18, 2021 11:23 pm
anon_investor wrote: Thu Jan 14, 2021 1:19 pm
Invictus002 wrote: Thu Jan 14, 2021 1:16 pm I had greats inputs in my previous thread.
viewtopic.php?f=2&t=333570

Questions:
It's hard to think of walking away from a nice pension and benefits, solid job, possibility to retire at 52.
Don't want to make hasty decision just because of some bosses that insults or is a roadblock / micromanage.
Been in same job, change is hard to think through, sort of wary of risking at 38, in the private industry.
Afraid to break away from the routine I have been having well over a decade.

making the move - Is it worth it in the grand scheme of life? (priorities are in my other thread)

I feel like I am/will give up lots of opportunities, all for a pension at 52 (for next 13 yrs) - is it worth it?
For only $15k a year? Leaving your current position sounds like a TERRIBLE idea based on what you are listing.
+1
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