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Message
Help a brother out with some retirement planning advice
Posted on 3/25/23 at 2:56 pm
Posted on 3/25/23 at 2:56 pm
So, I’m looking at jumping to a position with different company. Same job but much better environment/atmosphere better opportunities for advancement etc.
Pay will be slightly better ($5 an hour more) but I’ll be giving up 2% 401k match and new company has no annuity/pension benefit.
My current employer offers 8% match and annuity formula below.
11% of highest 5 year average X years of service before age 60. 32 years of service at age 55 would put me at around $420k
If I make the jump the idea is to apply the extra earnings to maxing out a Roth IRA for the next 28 years along with maxing 401k every year. How would this compare to the annuity at retirement age
Pay will be slightly better ($5 an hour more) but I’ll be giving up 2% 401k match and new company has no annuity/pension benefit.
My current employer offers 8% match and annuity formula below.
11% of highest 5 year average X years of service before age 60. 32 years of service at age 55 would put me at around $420k
If I make the jump the idea is to apply the extra earnings to maxing out a Roth IRA for the next 28 years along with maxing 401k every year. How would this compare to the annuity at retirement age
This post was edited on 3/25/23 at 3:00 pm
2
Posted on 3/25/23 at 3:24 pm to ThreauxDown
Does match vest immediately at both?
The $22,500 contribution limit or max match? 6%
If it isn't government work wouldn't be shocked if this was frozen at some point
quote:
maxing 401k every year
The $22,500 contribution limit or max match? 6%
quote:
11% of highest 5 year average X years of service before age 60. 32 years of service at age 55 would put me at around $420k
If it isn't government work wouldn't be shocked if this was frozen at some point
Posted on 3/25/23 at 3:58 pm to thelawnwranglers
Yep match vests immediately. Current company annuity vested at 5 years so I should have around 50-60k that’s mine currently in the annuity.
Maxing 401k overall, I’m contributing 20% where I am now I plan to at the other company as well
Not government work. O&G operations
Maxing 401k overall, I’m contributing 20% where I am now I plan to at the other company as well
Not government work. O&G operations
Posted on 3/25/23 at 4:50 pm to ThreauxDown
So more less does $2,000 a year match and the annuity ($450k value at retirement) get offset by you doing $6,000 a year in Roth assuming your income doesn't grow past phase out?
Or basically is the $4,000 a year (net increase in Roth investment minus $2,000 match lost) in 32 years worth $400k annuity you will get?
At 7% that $4k will be $440k at 7%
363k at 6%
Last 50 years stock market roughly 10% not inflation adjusted. So conservatively at worse you breakeven
Or basically is the $4,000 a year (net increase in Roth investment minus $2,000 match lost) in 32 years worth $400k annuity you will get?
At 7% that $4k will be $440k at 7%
363k at 6%
Last 50 years stock market roughly 10% not inflation adjusted. So conservatively at worse you breakeven
This post was edited on 3/25/23 at 5:00 pm
Posted on 3/25/23 at 6:24 pm to ThreauxDown
My 2 cents (pun intended):
Find work happiness. Then max the retirement opportunity from within that context. Time and your happiness should be highest priority. Frame decision on your opportunity to thrive, and money will follow, sure as sun rising in east.
Time is the most precious resource. Can get more money and stuff, but cannot get more time.
So, once you land best position for you to thrive over long haul, max the retirement in the position. Use prioritization posted on this board many times (401k up to company match, then Roth, etc, assuming emergency fund in place, etc).
Good luck.
Find work happiness. Then max the retirement opportunity from within that context. Time and your happiness should be highest priority. Frame decision on your opportunity to thrive, and money will follow, sure as sun rising in east.
Time is the most precious resource. Can get more money and stuff, but cannot get more time.
So, once you land best position for you to thrive over long haul, max the retirement in the position. Use prioritization posted on this board many times (401k up to company match, then Roth, etc, assuming emergency fund in place, etc).
Good luck.
Posted on 3/25/23 at 7:07 pm to Turf Taint
quote:
If it isn't government work wouldn't be shocked if this was frozen at some point
This x 1000%.
The grass isn’t always greener, it’s usually just a different shade of brown. Find happiness and max out 401k
Posted on 3/25/23 at 11:09 pm to thelawnwranglers
Yes this answers my question. I’m just trying to make sure that from a money standpoint, I’m not taking a huge hit that I may regret later down the line
Posted on 3/25/23 at 11:12 pm to ThreauxDown
quote:
Yes this answers my question. I’m just trying to make sure that from a money standpoint, I’m not taking a huge hit that I may regret later down the line
So more less the pension and match is worth $4k and $2k a year so if new salary is $6k more not taking any hit
Don't underrate what will make you happier
I used Internet calculator to value annuity id you want link
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