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How much are a pension and a company car really worth? Login/Join 
Little ray
of sunshine
Picture of jhe888
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Not enough data. How much do you use the car? Can you keep the pension? How much will it increase in the future. Will it continue to be yours if you leave?




The fish is mute, expressionless. The fish doesn't think because the fish knows everything.
 
Posts: 53117 | Location: Texas | Registered: February 10, 2004Reply With QuoteReport This Post
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I made the decision to leave the corporate womb with a 401k, Car and Pension to double my salary in 1996.

The 401k was transportable and I rolled it into an IRA and then made contributions to the IRA. I lost the 1:1 match on the first 6% of my income which equaled a $6,000 loss of value.

The company had a pension plan. I was vested in the Plan and retained that value but it is much smaller than what it would be if I had continued my employment.

I've missed the company car. I drive a much nicer Toyota Avalon Hybrid than the Ford passenger van I drove. I will say, in my experience, a so-so company car is better than your own personal car. No maintenance, mileage charges are reasonable and you trade it in every three years. My cost for my personal car the acquisition cost, maintenance, insurance, tax and operating expense.

I made the decision to leave while I was in my early 50's. The retirement benefits you will forego have a greater value, the closer you are to retirement.

The company I went to, with a double of salary was a very different culture than the one I left. That change made the switch very difficult for me and I ultimately left them. That led to real turbulence in my employment for about five years when I finally took the big step and started my own business. This led to five years of struggle and then the clouds parted and my work and professional life has been great.

At the end of the day I'd say two things:

1. Things work out
2. The ability to adapt to change is a critical life skill

Good Luck!!!


____

I'm filled with gratitude for the blessings I've received.
 
Posts: 707 | Location: So Cal | Registered: September 25, 2011Reply With QuoteReport This Post
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Picture of holdem
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At 45, and since you mentioned 65 retirement, that is 20 years from now.

If you currently make $75k per year, company A would pay you $1.5M over the next 20 years. Changing jobs to company B would pay $3M over the next 20 years. Difference of $1.5M over the lifetime of work.

However, company A will pay you $90K from 65 until death. To make the numbers easy, let's say that is at age 85. That means for the 20 years of your retirement you will earn $1.8M. That makes up the difference in the raise.

Of course all this math varies depending on where you current salary falls. There are also many intangibles such as; Are you happy in your current job? What is the commute time difference between the two? Does either require overnight travel? How confident are you in the pension? As others have said, I know people who had promises and then things changed. Would the job require a move which would effect the wife or children / school?

While it does appear to be a difficult decision, embrace it. You have a good job, and an offer fell in your lap. It is an enviable position in which to find yourself.
 
Posts: 2280 | Location: Orlando | Registered: April 22, 2007Reply With QuoteReport This Post
His Royal Hiney
Picture of Rey HRH
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quote:
Originally posted by Syngin1066:
I currently have a job with a pension, car, and a 401k match. I’m happy with my current job, but got a pop fly call the other day and after a few conversations, have job offer with another company that will double my salary. The new place has the same 401k match, but there is no pension or car. The healthcare is essentially the same. Both companies are solid financially and I have no concerns about the pension going away. I’m just trying to gauge if making the move is worth it. I’m fully vested in the pension at my current employer, been there about 10 years and I’m 45.

Could any of the Sigforum financial gurus weigh in?

Thank you


A slam dunk for taking the new job would be if you already are vested for the pension in the current company or if you are just a few years in so that you still have a lot of years before you get vested.

If you've been there for a while then a couple of more considerations factor in: 1) What percent in terms of time are you vested in, 2) How many actual years do you still have to be there before getting vested, and 3) how far away are you from retirement.

The considerations are: if you are just a month away from vesting, can you ask the new company to give you a start date a month out?

If you're under 50% in terms of time vested, and the additional time you need is 4 years or more, I would take the new job.

If you're far away from retirement, that would sway your choice for the new job. Getting double the salary now jumps you many years ahead in your career earnings-wise and will be a new base for future raises and new job compensation negotiations.

In any case, you should be maxing out your 401k and roth iras.

Good luck.



"It did not really matter what we expected from life, but rather what life expected from us. We needed to stop asking about the meaning of life, and instead to think of ourselves as those who were being questioned by life – daily and hourly. Our answer must consist not in talk and meditation, but in right action and in right conduct. Life ultimately means taking the responsibility to find the right answer to its problems and to fulfill the tasks which it constantly sets for each individual." Viktor Frankl, Man's Search for Meaning, 1946.
 
Posts: 19582 | Location: The Free State of Arizona - Ditat Deus | Registered: March 24, 2011Reply With QuoteReport This Post
Big Stack
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Which, if either, job gives you better career development / future growth potential?
 
Posts: 21240 | Registered: November 05, 2003Reply With QuoteReport This Post
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quote:
Originally posted by MNSIG:
quote:
Originally posted by Powers77:
When faced with a similar situation I viewed it this way. In order to generate $75,000 ( difference in pension amounts) how much additional would you have to save in order to generate it at a reasonably assumed rate? For example, you assume 5% it would require $15 million additional savings.


That's a bit high. $1.5 Million would generate $75,000 at 5% annually without even touching the principal.


Misplaced a decimal point. That's what happens sometimes when I do math in my head on less than 2 large cups of coffee.
 
Posts: 1950 | Location: Indiana or Florida depending on season  | Registered: March 18, 2012Reply With QuoteReport This Post
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It all depends on your future pension and your costs now,when considering leaving one for another.

Having a pension is huge.When you consider your new salary,how much will you put away or save towards your future to compare to a pension and/or how much of the new salary will go to your new lifestyle? When can you start collecting a pension vs. working and putting away into your savings? Having a car is another huge perk. You save about $300-600 a month, depending on the car and now you will have to figure the cost of a new car into your budget and now the prices/availability of cars are high/can be difficult to find. Maintenance is another matter. Having a vehicle you don't have to maintain/repair is nice.

You are a young guy still and have plenty of time to stay with your company now to increase your pension with your salary. The idea of double your salary might seem good now but the security of a pension can be worth it's weight in gold. If you are still able to put into your 401k at your first job and have a pension, that is a home run in itself. Like others have said, you will have to speak to a financial advisor to see what you will have to save in order to compare apples to apples. It's a hard choice but good luck to you.
 
Posts: 6840 | Location: Treasure Coast,Fl. | Registered: July 04, 2003Reply With QuoteReport This Post
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