Currently make $86K.
New job would be $120k plus $30k in bonuses (to start). From Sr System Engineer to Sales Engineer for large Cloud Computing Company.

Would lose State Pension. (Approx $2k/month) at retirement age of 63.

Age: 50

Debt: 172K house.  Nothing else.

Monday I'll be offered a job making $120k plus $30k/yr bonuses.
Current job has NO opportunity for advancement.


ETA:  Updates to answer questions
Status: Married
Wife works for State of MN DoC.  I will be able to be put on her Medical Insurance when I retire, which is 100% covered until we're Medicare eligible.
Wife will retire in 13 years with roughly $2-3K/mo pension.

I have been working for .gov for 4 years.  In MN you're not fully vested until you work for 5 years, so I would be 'losing' my pension.
However, if I were to go back in the next 5 years, I do not lose my time served and would only need to work another year to become vested.
Because I would only be working for the .gov for roughly 15 years total at age 63, the pension isn't much money.  It goes up considerably if I wait until 67, but fuck working until I'm almost 70.  I wanna retire at 60 if possible.

Current investments:
457b - roughly $150k (been maxing out for 2 years)
SIMPLE IRA (through my business, intentions are to max out until retirement) - $14.5k
Roth - $5k (I'll be maxing this out either way going forward)
Wife's 457 - $10k (she got started late, but if I take the new job, she'll be maxing out)

Minnesota's State Pension plan is solvent and apparently managed and funded quite well.  I'm not concerned with 'not getting paid' if I were to stay.

I crunched numbers last night.  With new job, I could fully max both of our 457/401k's (including extra after 50 catch up), max Roth's, max SIMPLE IRA, throw another $2500/mo into investments (likely something simple like a S&P 500 index fund) and put another $1k towards the house.
That would equate to roughly $101k a year into investments.  That doesn't include ANY bonuses I might get from the new job, and those would probably be put into retirement investments, though I may splurge and buy the wife a newer car, etc. depending on how well they are.
Raises on both sides would go towards upgrading our life style/luxury items we don't 'need'.  Still have to enjoy life now.

New job matches 6% of 50% of 401k.  Current job matches NOTHING, but they do contribute towards my pension.

Someone asked how often the new company pays out bonuses.  My new boss (who's also a friend) said he hit 100% of his bonuses last year, but only 50% the year before.  So it's not guaranteed and I'm not counting on them when doing financials.


House would be paid off in 8 years.  Retire in 10 with roughly 2 million in investments (assuming market doesn't go boom, which I feel it likely will).
Would have SS and her pension and 4% of 2mil would be roughly $11k/month in income with no debt during retirement.
We wouldn't be "rich" per se, but I think we could live off that comfortably.

Do you have to stick it out to 63 to get any pension?

knuckle dragger math.

extra $34k x 13 years is 442k

so you would have to live ~18.5 years past retirement or to 81.5 before you would be at the break point.

that is without the bonus and assuming you had 0.0% raises in 13 years...which seems unlikely.

So, yes, take the job. Invest smart.

No.  I would be 'fully invested' in one year.  But it wouldn't be much.  Maybe $700/month.

can you trust the state to provide a pension?


I would do it because I'm against pensions all together.

Would you lose it completely? Or do you get your part back?

Sounds to me like the new job will pay enough that you can invest some of those earnings and make up for the pension loss

I could apply to retrieve about $21k

Assuming you live to 90, that’s about $650,000 in pension.


Wage differences, you would make $472,000 more by 73. Assuming 0 raises.


Are you going to make $172,000 in interest off your investments in 13 years?

If you invest $10,000 a year, at 8% return on investment, you’ll make ~$242,000.  More you invest, the better you are.


So you’ll probably come out on top.

How healthy is your state's pension plan?  Some are ok, many are in trouble.

Personally I would take the new job, and max my 401k and HSA (assuming that one is offered).

I'm CSRS. Retired for 12 years. I'd take the new job, and invest the extra money.

What do your current IRA/Roth/401k/whatever balances look like?

Do a Net Present Value calculation on the old salary plus the $2k/mo pension until you hit 75 vs the new salary until you think you'd voluntarily stop working.   I wouldn't be surprised if the pension were far more valuable at 50yo than you're thinking.

Kharn

I’d take that deal in a heartbeat. Invest wisely, and you can build a portfolio that will far outperform any pension fund out there.

May not be able to max out 401k, depending on the participation rates

HCE is $130k

Well you might be safer in you current job.....Be ready to be replaced in a few years by a H1B at the new one......It's tough in the real world.

I am 48 and in 4 years I can retire from the State of Florida with 30 years and bring home approximately $45k/year, but I have to hit the 30 year mark to be able to draw it without penalty. I have been offered several positions in the private sector making almost double my current salary.

I can't seem to justify leaving this close to the end...

That 2k/month for state retirement sounds low for someone making 86k.  How many years for the state would you have at 63?

Back of envelope calculations say that if you save all the extra money, $64000 a year less 30% taxes is around $45000, less if you are in a high tax state.  45,000 x 13 years is $582400.  That would last 24 years at the pensions $2k a month.  That doesn't include investment income because that math is beyond me.  Also if you put some of the money in tax deferred investments like a 401k or IRA then you'd do a little better.  Probably a better deal if you invest wisely and die before you're 90.  YMMV

If you're considering jumping ship and haven't made it a year you're not likely to make it long enough for the pension to add up to that much anyway.

I'd say go for the money and make sure you put a good portion of the difference into a 401k or similar retirement account.

No, because they'd tax my dick off.

How do Healthcare costs compare at the two jobs?

Faced same decision.  In TX, your state employee health insurance is only $525 for an entire family for a decent HMO, plus we have 401k match AND pension. Health insurance is free for employee only. Very cheap short/long term disability/life ins. I would possibly be denied coverage for a pre-existing health issue or theyd rape me on premiums in private sector, I'd realistically need 2.5X my current government salary to make it worth my while

There’s a thing called a single premium immediate annuity. It’s an annuity where you pay a lump sum and then it pays you monthly for the rest of your life. It’s basically like buying a pension.

The relevance Is that you could price out a single premium immediate annuity today that would pay $2000 per month. You would need to enter in the age at which the pension would start paying as your current age. That would give you a pretty good idea of the value of the pension although Some pensions have additional benefits like spousal benefits after your death that a SPIA would not have.

If the after-tax salary increase between now and retirement Adds up to be significantly more than the cost of the SPIA Then the new job is likely better.

If when you do the math they are roughly the same Then you’ll need to weigh other factors like the chances of the new job leading to higher pay relative to the old one ( favors new job likely) vs The unknown aspects of the new job, it’s certainly more risky in the sense that you don’t know it as well, whether you like it, how well you will be treated, how successful you will be, how likely you are to actually collect the bonus etc etc. It would suck to leave only to find out that your new boss is an asshole, the hours are twice as long, and the bonus is unattainable. Interviewing and research can tell you a lot of that but not the near perfect knowledge you have of your current position.

I actually left my gov job with pension to go private. My only regret was not doing it sooner, fuck state work BS and the golden handcuffs of a pension. I don't miss the slow pace, I don't miss shit employees who can't get fired, I don't miss equity forced BS, fuck it all. I get paid more to do my job and no BS now, life is good. Free yourself from all that crap, you can out save and out earn on interest any pension out their with the pay increase.

Just another reason why I hate pensions. Give me the money up front, I don’t want to be tied to a job. OP, do the math. Personally, I wouldn’t want to have to wait that long to retire, but medical benefits alone are pretty awesome.

How long have you been at the state job because that monthly payment seems low as shit. It should be double that.

How .much do you already have in retirement?

It would be better to take the offer next year when you're vested but probably taking the better pay is the better move.

It really depends, My dad worked for CA in the 60-70's until vested, then he spent 20 in WA and got his pension, and then he took a temporary job in CA that bumped his CA pension up to his last years salary which was insane money.

Roll that right into your retirement fund, and the differential in pay too.

Keep your current standard of living.

Look at your state rules.
I did 10 years for Texas teachers retirement plan, bought 5 .mil years and bought one year with saved sick leave and pto.
Ended up with 36.8% of my final salary and paid for by the state BC/BS for life.
My buddy did 16 years but left for an overseas gig, his 17 years are still there but he has to wait until 65 to start collecting.

Yes.  Put the extra $ into Bitcoin and retire way before 63

You’ll spend the extra money trying to be next level.

Plus you get more money if you’d like, while you can still enjoy it. Or clear out debt etc.

It all depends on whether you're disciplined.
Let's say, conservatively, the move nets you $30k/year (after taxes) more than you currently make.
What are you going to do with that money?
Looking at a new bass boat, some .22 ammo or other extravagance? Well, that gets a bit dicey.
But if you're disciplined enough to save and invest, that's definitely worth the move.

Start with the $21k you get back from the pension fund, then add $30k/yr for the next 13 years to an investment fund returning an average of 8%...you end up with $750k.  
Draw the recommended 4%/year from that and it will give you $2500/mo, so you're already ahead.
And you didn't even mention any sort of 401k or other retirement program at the new job.  If they do any sort of investment matching, life gets even better.

Maximize your tax options (max out the IRA and 401K if you have one available), set everything up for automatic contributions, use a robo-advisor if you're not knowledgable about investing.
It's not hard.  It just takes discipline.
13 years is enough time.

One thing I have not seen mentioned yet but occurred to me on this post.  Take notice of the different tax rates.  Especially if you can get your current pay down close to 40k in taxable income (max out 401k and any other tax deductions).  Current rate of taxes are at the most 12%, there is now way to take 120k down to even 80k unless you own a business in the deal and have major deductions.  Your new tax rate will be 22% or higher for anything you make above the 40k mark.  As a note I have never received a bonus but thought they take like 25% or 33% right off the top.  Your 30k bonus will be more like 20-23k.  

I would have a hard time with it but honestly it would more depend on the work environment in each case.  I would rather work for 50k and be happy than 120k and a miserable SOB.  If your states pension plan is in jeopardy and you don't have a decent 401k type nest egg I would bail anyway if you can get something better.

Also another valid point, not just pay but any other bennies the might cost more after the fact.  Maybe you come out a head in both pay and bennies but something else to consider.

$2K a month pension? Fuck that shit go get the new job.

Do you have a wife? Plan on getting one? If you do, she'll likely outlive you and would get the pension. Something to consider anyway...

Take the pension, the down side is that you could get fire/laid off from the other job in a heartbeat.  Get the pension, collect SS and invest in whatever retirement account is available.

Work on a side gig that isn’t in conflict.

I'd stick with the pension and the state job.

Unlikely to be fired / replaced, unlikely to have Pension collapse, and at 63, you are still young (and hopefully skilled enough) to snag another job, quite possibly a similar job to this one.

Whereas tech, thats pretty brutal and typically not reverent of the AARP crowd. Plus risk of random H1B job swap.

Basically if you took the new job, and got fired/replaced in 4-5 years, how fucked would you be for retirement?

And that is why Kali is broke

Govt Pensions are not what they used to be. In my state new employees for years just get a 401k type plan. I would go for the money. Invest as much as you  can in a balanced portfolio. With the income increase you will come out on top. If you are only one year from being vested, leave your money in the state account and leave on good terms. If your new job  does not work out you can always go back and get vested.

H1B ain’t cutting it as a sales engineer.

I’d never get near a pension. The word itself irritates me like the word “moist”.

Every dumbass over the years always tried to give me the life advice “get a job and get yer pension!” It’s just repulsive to me in general.

$2k a month is ultra repulsive to me.

Pension just screams “dependent” to me. I can’t fathom looking to Big Brother to honor his commitments if times are tough.

Tl;dr: I hates pensions conceptually purely out of feels.

That's for sure.

Good question.


Not if you choose not to leave it to her and take the higher monthly payment.

That’s tempting, but my state’s pension plan is one of the best managed in the country. We also have a 401k plan option, in addition to the pension. Every paycheck 6% comes out mandatorily for the pension fund and I have another 10% split between a Roth and a 401k.

Then on my weeks off I make around 6-800 more on side jobs.

Take the job.

Buy bitcoin with bonus

In 6 months you’ll have $87,000000000000000000000000000000000000000000000

I love pensions but it really sounds like yours sucks. Working to 63

Jesus... 2k month pension for a 86k salary.  Sounds like the state pension fund there is a disaster.


ETA maybe I missed it in the OP.. how many years in the system would you have at 63?