Is a 20% pay raise at a new job ever not worth taking?

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Bwlonge
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Is a 20% pay raise at a new job ever not worth taking?

Post by Bwlonge » Sun Jan 27, 2019 7:30 pm

I'm weighing options for potential avenues. It's looking like I could potentially land jobs that result in an almost 30% base income increase. There are a number of non-monetary issues to consider- I would move away from a LCOL area I like, I would become a long distance landlord and would have to button up my rental, the new jobs would have a wider scope and increased responsibility. There is a possibility of a promotion at my current job, but there will likely always be a cap on earning potential due to the smaller size of the organization.



Does anyone have experience considering these kinds of options? How much did these kinds and other non-monetary considerations come into play?



Current situation: 70k+5k local side job, duplex rental income offsets mortgage

Potential job 1: 100k, 11k rental profit, ~21k rent

Potential job 2: 90k, 11k rental profit, ~11k rent
Last edited by Bwlonge on Sun Jan 27, 2019 9:36 pm, edited 1 time in total.

Olemiss540
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Re: Is a 30% pay raise at a new job ever not worth taking?

Post by Olemiss540 » Sun Jan 27, 2019 7:40 pm

Do you have any preference at all with regards to locale? Are you looking to progress in your career or coast?

It may help to have specifics with regards to location.
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.

Topic Author
Bwlonge
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Re: Is a 30% pay raise at a new job ever not worth taking?

Post by Bwlonge » Sun Jan 27, 2019 7:47 pm

Olemiss540 wrote:
Sun Jan 27, 2019 7:40 pm
Do you have any preference at all with regards to locale? Are you looking to progress in your career or coast?

It may help to have specifics with regards to location.
This is in Massachusetts. Currently in the Berkshires, other options are Boston (100k) and south coast (90k).

I moved here from Boston and thought I couldn't get back to the city soon enough. However, being enveloped by nature is pretty great.

I'm turning 32 next month and I'm extremely wishy washy with the idea of progressing vs. coasting. Some days I want to be a hot shot, other days I'm so grateful I can get away with not using 100% of my brain. I started graduate courses on a second masters and have earned a certificate so far- that's an example of me expressing my desire to progress. I spent my entire weekend playing video games and working out...that's an example of me happy to waste time.

Olemiss540
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Re: Is a 30% pay raise at a new job ever not worth taking?

Post by Olemiss540 » Sun Jan 27, 2019 7:54 pm

I would run mock budgets for each scenario and see if the additional responsibilities push up my retirement by a fairly substantial amount. Would seem another 30% would definately do that, so I sure as heck would give it a try. Maybe branch out of Mass locations and get some traveling done while you are flexible?

Sorry this isn't a direct answer. I would probably take the 90k job given the rent costs and increase in pay. Personally I would try to find somewhere with warmer weather :D !
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.

Golf maniac
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Re: Is a 30% pay raise at a new job ever not worth taking?

Post by Golf maniac » Sun Jan 27, 2019 8:39 pm

Money is only one variable. Go with the job you think you will enjoy the most and the people you enjoy working with. Think about life in the various locations, where will you enjoy your time away from work? Budgeting for the 3 jobs is also important. Where can you save the most for retirement? If significant other then they need to have a vote or a veto.

SoAnyway
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Re: Is a 30% pay raise at a new job ever not worth taking?

Post by SoAnyway » Sun Jan 27, 2019 10:52 pm

Bwlonge wrote:
Sun Jan 27, 2019 7:47 pm
I'm turning 32 next month and I'm extremely wishy washy with the idea of progressing vs. coasting. Some days I want to be a hot shot, other days I'm so grateful I can get away with not using 100% of my brain.
OP, the answer to the question in your thread title is "Yes". But the decisionmaker has to know what he/she WANTS, have a plan to achieve it, and take ownership of the consequences of the decision.

As you know, you have to think about "sustainability" and long-term consequences of your decision (career/finance-wise) since you're only 32. As you know, the job world can change fast, in ways you can't predict. You've already identified the issue here re. "wishy-washy"-ness. I suspect that's due to uncertainty re. sustainability. BTW, I've spent most of the last 35 years in the greater Boston area - downtown to the far 'burbs - with many occasional jaunts to the spectacular surroundings of the Berkshires. (I get it.)

SoAnyway, my crystal ball is no better than yours. I'd simply ask yourself 2 simple questions:
1. "If I stay where I am, what's the worst that can happen?"
2. "If that worst happens, how will I adapt to that 'new normal'?"

That should help you formulate your plan and decisionmaking. I know what I'd do in your situation - and I've been there and I've done it (no regrets) - but I'm not you.
Last edited by SoAnyway on Mon Jan 28, 2019 12:27 am, edited 2 times in total.
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Leemiller
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Re: Is a 20% pay raise at a new job ever not worth taking?

Post by Leemiller » Sun Jan 27, 2019 11:00 pm

Why can’t you take a higher paying job, sell your rental, and buy another property like that in the new local?

randomguy
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Re: Is a 30% pay raise at a new job ever not worth taking?

Post by randomguy » Sun Jan 27, 2019 11:00 pm

Golf maniac wrote:
Sun Jan 27, 2019 8:39 pm
Money is only one variable. Go with the job you think you will enjoy the most and the people you enjoy working with. Think about life in the various locations, where will you enjoy your time away from work? Budgeting for the 3 jobs is also important. Where can you save the most for retirement? If significant other then they need to have a vote or a veto.
Thats the part that is hard to tell. Go to the new job and learn that your boss is a total pain in butt and you might find that that extra 20% isn't worth it. Or of course it could be great and you get to face new challenges. I have turned down jobs that offered 15% more money because I though the other option would be a better growth experience. I am happy with that choice but who knows what the other path might have lead me.

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Re: Is a 30% pay raise at a new job ever not worth taking?

Post by mariezzz » Sun Jan 27, 2019 11:50 pm

randomguy wrote:
Sun Jan 27, 2019 11:00 pm
Golf maniac wrote:
Sun Jan 27, 2019 8:39 pm
Money is only one variable. Go with the job you think you will enjoy the most and the people you enjoy working with. Think about life in the various locations, where will you enjoy your time away from work? Budgeting for the 3 jobs is also important. Where can you save the most for retirement? If significant other then they need to have a vote or a veto.
Thats the part that is hard to tell. Go to the new job and learn that your boss is a total pain in butt and you might find that that extra 20% isn't worth it. Or of course it could be great and you get to face new challenges. I have turned down jobs that offered 15% more money because I though the other option would be a better growth experience. I am happy with that choice but who knows what the other path might have lead me.
+1. There are a lot of bad managers, and they'll make you miserable. See what glassdoor says, too, but better if you have information directly from people at the company.

carolinaman
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Re: Is a 20% pay raise at a new job ever not worth taking?

Post by carolinaman » Mon Jan 28, 2019 8:21 am

The short answer is yes. Some jobs with 20% pay raise may not be a good fit based upon your career plans, work culture, work demands, job security, etc.

You seem to be coasting to some degree right now. I suggest doing some serious career planning to determine what you want to do long term. What type of job will give you the most satisfaction as well as a decent income? Income is not the only factor but obviously important.

You should also consider where you want to live. Large urban areas have the best paying jobs but also HCOL and other negative factors (at least to some). Smaller cities and rural areas have lower paying jobs but LCOL and other positive factors, especially if you like the outdoors.

How will the masters degree you are currently working on help you?

Best wishes.

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Re: Is a 20% pay raise at a new job ever not worth taking?

Post by Jack FFR1846 » Mon Jan 28, 2019 8:33 am

20% in the Berkshires is a great increase. 30% with a move to Boston is a kick in the groin. You will net way more where you are.
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simplesimon
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Re: Is a 20% pay raise at a new job ever not worth taking?

Post by simplesimon » Mon Jan 28, 2019 8:40 am

Any interest in having a more active social life?

You'll be able to rent for less than $21k/year in the city if you get roommates.

pindevil
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Re: Is a 20% pay raise at a new job ever not worth taking?

Post by pindevil » Mon Jan 28, 2019 8:48 am

If money is a primary factor in the decision, I would talk to your current employer and tell them you are planning to take this other job. If you are a valuable employee they will try to keep you. But...you should be prepared to walk if it doesn't work.

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leeks
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Re: Is a 30% pay raise at a new job ever not worth taking?

Post by leeks » Mon Jan 28, 2019 9:24 am

Bwlonge wrote:
Sun Jan 27, 2019 7:47 pm
Olemiss540 wrote:
Sun Jan 27, 2019 7:40 pm
Do you have any preference at all with regards to locale? Are you looking to progress in your career or coast?

It may help to have specifics with regards to location.
This is in Massachusetts. Currently in the Berkshires, other options are Boston (100k) and south coast (90k).

I moved here from Boston and thought I couldn't get back to the city soon enough. However, being enveloped by nature is pretty great.

I'm turning 32 next month and I'm extremely wishy washy with the idea of progressing vs. coasting. Some days I want to be a hot shot, other days I'm so grateful I can get away with not using 100% of my brain. I started graduate courses on a second masters and have earned a certificate so far- that's an example of me expressing my desire to progress. I spent my entire weekend playing video games and working out...that's an example of me happy to waste time.
The differentials in salary/housing are less important than the impact on your lifestyle. Do you want more career challenges than you can find in your current area? Do you want to try living in a different community?

1. Working out is not wasting time. It is self care just like eating and sleeping.

2. Don't move if you truly love where you live. If you would prefer to spend your lifetime there (have a strong community of friends or family there, love the recreational amenities, etc) then make your career work to support that, ie only consider new jobs in the same area, etc.

3. Maybe you are too young to know where you want to stay forever. Maybe it is worth moving if you feel it is the best way to advance your career. If you are single, and don't wish to remain so, perhaps a more densely populated area along with new job will provide the opportunity for an expanded social network, and a larger pool of potential mates.

4. Owning the house should not make you feel tied down - that alone is not a reason to stay. You can rent or sell it, housing should work for you rather than restraining your options.

rashad3000
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Re: Is a 20% pay raise at a new job ever not worth taking?

Post by rashad3000 » Mon Jan 28, 2019 9:42 am

It depends. I make $95,000 a year in a relatively LCOL area as an alternative school principal. My campus does not have many teachers and we are not judged by test scores. My wife and I both agree that it wouldn't be worth it to take a high school principal job making $115,000-$120,000 a year (which would match this 20% pay raise). We are pretty good with our money and make enough now to do everything we need to do and save aggressively for retirement. The raise is not worth the added headache. I would like to retire in my current position, if I could.

MrDrinkingWater
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Re: Is a 20% pay raise at a new job ever not worth taking?

Post by MrDrinkingWater » Mon Jan 28, 2019 10:03 am

If you already have bona fide job offers from Potential Job 1 and Potential Job 2, then you likely have a deadline approaching to accept or reject either or both of those offers. If you are only considering the possibilities from reading job postings or having a successful first interview at the other two firms, you do have the time to reflect and think things over. You received a lot of good advice earlier in this thread.

I'll add one thing that I did not see in the earlier replies. If you are near some arbitrary but possibly meaningful anniversary date of service at your current employer, consider if it is really beneficial to you to wait just a few weeks before you leave for another job. At some companies, when you've completed 3 years or 5 years of service, the 401k plan might have a provision where all of the company match is yours, but if your leave before 3 years or 5 years of service is complete, you might get only a percentage of the 401k matching dollars. Collecting 100% of the matching dollars might not matter much to you, but then again it might.

If your current employer has a defined benefit pension plan, you might review the provisions of that plan before you leave. Getting a meaningful pension payout 30 years later for a few years of service isn't very likely. But, some plans might have a provision where working 5.0 years of service might be better than working 4.9 years of service. Staying one more month might lock something in, if you were ever to come back to your current employer within 2 to 5 years of leaving. Some plans are like that. Perhaps a 5-year vested ex-employee might get rehired with with a better vacation benefit, where a 4.9 year employee isn't considered a vested ex-employee at all.

Good luck to you. It sounds like you are doing fine.
Last edited by MrDrinkingWater on Tue Jan 29, 2019 10:43 am, edited 1 time in total.

stoptothink
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Re: Is a 30% pay raise at a new job ever not worth taking?

Post by stoptothink » Mon Jan 28, 2019 10:13 am

randomguy wrote:
Sun Jan 27, 2019 11:00 pm
Golf maniac wrote:
Sun Jan 27, 2019 8:39 pm
Money is only one variable. Go with the job you think you will enjoy the most and the people you enjoy working with. Think about life in the various locations, where will you enjoy your time away from work? Budgeting for the 3 jobs is also important. Where can you save the most for retirement? If significant other then they need to have a vote or a veto.
Thats the part that is hard to tell. Go to the new job and learn that your boss is a total pain in butt and you might find that that extra 20% isn't worth it. Or of course it could be great and you get to face new challenges. I have turned down jobs that offered 15% more money because I though the other option would be a better growth experience. I am happy with that choice but who knows what the other path might have lead me.
When I took my current position, my employer's direct competitor offered me 25% more, but my company is the industry leader and known for having an amazing work environment. I felt the work environment and growth potential were superior at my current employer. If I lost my job today I am pretty confident I could have a job (and a raise) from any of our top-3 competitors by the end of the day, but I know I'd have to travel more, probably get a car (I have a 7min walk commute), lose some of my freedom to work remotely, and be taking a risk with a new work environment.

The type of money discussed in the OP is not life-changing, so it is really important that the entire picture be examined.

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Re: Is a 20% pay raise at a new job ever not worth taking?

Post by bloom2708 » Mon Jan 28, 2019 10:49 am

Salary is just one component:

1. What does your commute look like? Parking?
2. How are the benefits? Health insurance? Life? Disability? HSA with HDHP?
3. How much vacation? Sick time? Combined PTO?
4. Other benefits? Vision? Dental? Stock options?
5. ESPP plan?
6. Location to family/friends?

Salary is just one piece.
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adamthesmythe
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Re: Is a 20% pay raise at a new job ever not worth taking?

Post by adamthesmythe » Mon Jan 28, 2019 11:14 am

There are masses of possible reasons not to change to the new job

- not enough $ to be better
- hate the weather
- spouse won't have a job
- bad schools
- horrific commute
- family hates the location
....

Look carefully at the entire picture, discuss, then make your best choice.

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Re: Is a 20% pay raise at a new job ever not worth taking?

Post by forgeblast » Mon Jan 28, 2019 11:35 am

adamthesmythe wrote:
Mon Jan 28, 2019 11:14 am
There are masses of possible reasons not to change to the new job

- not enough $ to be better
- hate the weather
- spouse won't have a job
- bad schools
- horrific commute
- family hates the location
....

Look carefully at the entire picture, discuss, then make your best choice.
South Coast, how bad will it be in the summer when the cape gets overrun.

jharkin
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Re: Is a 20% pay raise at a new job ever not worth taking?

Post by jharkin » Mon Jan 28, 2019 11:52 am

forgeblast wrote:
Mon Jan 28, 2019 11:35 am

South Coast, how bad will it be in the summer when the cape gets overrun.
If you are talking about the commute, Cape traffic wont be a big deal except for certain situations - mostly Friday PM

Primary cape slowdowns are on Rt3 and I495 Southbound - and its mostly bad on Friday afternoons (weekenders), Saturday AM (week rental changeover) and Sunday afternoon northbound (weekenders). Most week days dont see a big impact from vacation traffic, other than local roads on-cape.

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Re: Is a 20% pay raise at a new job ever not worth taking?

Post by daheld » Mon Jan 28, 2019 12:12 pm

rashad3000 wrote:
Mon Jan 28, 2019 9:42 am
It depends. I make $95,000 a year in a relatively LCOL area as an alternative school principal. My campus does not have many teachers and we are not judged by test scores. My wife and I both agree that it wouldn't be worth it to take a high school principal job making $115,000-$120,000 a year (which would match this 20% pay raise). We are pretty good with our money and make enough now to do everything we need to do and save aggressively for retirement. The raise is not worth the added headache. I would like to retire in my current position, if I could.
^^^THIS. Nobody can really answer the question in the title of your post for you. Everyone's situation is different. Sometimes the grass IS greener on the other side, and sometime's it's not. I took a 20% pay raise and nearly went insane in the 6 months I lasted in an incredibly high stress job. I took a 25% pay cut and was so, so happy. Money ain't everything.

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Re: Is a 20% pay raise at a new job ever not worth taking?

Post by KyleAAA » Mon Jan 28, 2019 12:15 pm

If it was a major drop in responsibility or QOL (i.e. my commute went from 15 minutes to 1 hr 15 mins) I would probably not take it. Otherwise, all else being equal, I probably would. But that's just me. There are limitless reasons not to take a 20% raise depending on what you value. I doubt my answer will be the same when I'm 50.

azianbob
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Re: Is a 20% pay raise at a new job ever not worth taking?

Post by azianbob » Mon Jan 28, 2019 12:33 pm

You should also consider other perks of your job other than just salary
- Bonuses
- Stock
- 401k match and/or profit sharing
- People you work with aren't jerks
- Dress code and company culture
- Flexibility (can you work from home, can you just take off early for doctor appointments and errands)
- Amount of actual work, and is it enjoyable
- Amount of vacation, sick days and ease of using them (some places give a lot but so hard to actually use them)
- Cost of medical insurance and coverage
- Other perks like company car, paid parking, free food, discounts

I once moved jobs that only gave me a 9% base increase, but there was also 10% more 401k match, 7% more bonus, and work from home a couple times a week, and the environment was much nicer so it was worth it for me, even though it increased my commute by 30 minutes and I lost out on the ESPP from the old company.

Topic Author
Bwlonge
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Re: Is a 20% pay raise at a new job ever not worth taking?

Post by Bwlonge » Tue Jan 29, 2019 8:47 am

Awesome advice in here, thank you! After reading through twice, and thinking about it, I'm doubting my wherewithal on a relocation given that I like my surroundings and its a gamble otherwise. But, plenty to think about.

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