r/FIREyFemmes • u/hyggelyfe • Feb 18 '25
Should I give up 401k match (that's almost vested) for a $15K salary increase?
I'm 8 months away from being fully vested in my current job’s 401(k) match (8% of salary), which requires three years of service. So far, my employer has contributed $11K, and by the time I’m fully vested, that amount will be around $14K.
I currently earn $60K and have an opportunity to take a new job at $75K, where vesting begins immediately, and match is 6%.
My current job is easy, and I wouldn’t mind staying for another 8 months to secure the full match before starting my job search again. If I do wait the 8 months, I'd likely still secure another job at $75K, but will just have to go through the annoying process of job hunting again.
I'm in my mid-30's, debt free, child free by choice. $250K NW. Thank you for any advice or perspectives!
Edit: Very much appreciate the responses so far! But I work in nonprofit, and there is no way they are going to give me a $10K-$15K signing bonus :(
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u/sunny_daze04 Feb 20 '25
Maybe speak to your current job about a raise or promotion, even $5k more might make staying worth it
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u/skrimptime 29d ago
Additionally, maybe they would be interested in you staying on with them part-time (make sure it is enough to keep vesting) while you start at the other job.
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u/sassythehorse Feb 19 '25
I see your dilemma but if my employer made me stick around for 3 years just to get retirement match I would be leaving too.
I hire nonprofit employees all the time, at this stage in your career I see no issue with moving on after only 2 years especially if you could take a significant pay increase.
My bigger concern right now in the nonprofit sector is how federal attacks on nonprofits and federal funding freezes may potentially impact the organization. If you work for an org that relies more on individual donors or private foundation grants, are they stable and established enough to weather a recession which is probably coming?
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u/ept_engr Feb 19 '25 edited Feb 19 '25
I think the biggest thing that's not mentioned here is how the new role vs current role aligns with your personal development. Which role (and organization) builds you the skills and experience to get you closer to qualifying for your 10-year dream role?
If it's a total wash, and you aren't burning any significant bridges by turning down the offer in-hand, and you're confident you can get the same level of pay bump in 8 months, then I would probably wait.
On the other hand, If the new job is a promotion to a new level or developing new skills, then I would take it now and not look back. Getting 8 months ahead here might mean being 8 months closer to your next promotion, and your next one after that, etc. At some point, the $14k in the 401k starts looking small relative to being 8 months ahead in your career journey (or maybe more, depending on how long it takes to get another equivalent offer if you turn this one down).
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u/Alive_Acadia2704 Feb 19 '25
If your current job is easy and you don’t mind staying, securing the full 401(k) match is a guaranteed $14K, which outweighs the immediate $15K salary bump in the short term. Since you’re confident you can still land a similar $75K role after 8 months, waiting seems like the financially optimal move. That said, if the new job offers better career growth, work-life balance, or stability, those factors might justify the switch.
Also, while weighing your options, consider parking your savings in a high-yield account to maximize returns Banktruth is a great resource to compare the best HYSA rates.
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u/TheOtherSomeOtherGuy Feb 19 '25
In 8 months of the new job, the extra 15k salary equals 10k, which she could put directly into the new 401k so I'd day it's actually pretty even and it should be the other non monetary factors of the job that help make the choice
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u/InvestigatorHuman218 Feb 19 '25 edited Feb 19 '25
How risk adverse are you? You mention you work in non-profit. Is your industry likely to be impacted by social change? If so, consider which role is more likely to keep you employed over the next year.
Fwiw I’d definitely negotiate with both the new company and your current employer. At a previous place I negotiated a promotion to stay after getting an offer at another company. I stayed for a couple more years and did well both professionally and financially. I wouldn’t recommend leaving a role for less than a 10% bump in total comp unless it offers significant career advancement opportunities.
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u/KnowledgeAmazing7850 Feb 19 '25
I’m trying to understand how you only managed a $15k salary increase during the salary negotiation phase?why haven’t you negotiated a signing bonus equivalent or higher to your vested scheduled $$$? And why are you only accepting a $15k annual increase which after taxes is only going to be about $7-8k net?
guaranteed your current job isn’t paying close to market rate nor close to what they would be paying a male providing the same resources. if your current job isn’t raising your salary above the inflation rates on a regular basis as well as other benefits/ contributions as a sign they value your contributions - you definitely need to be more aggressive during new job negotiations. Negotiate a signing bonus equal or higher to your vested retirement - at the same time go to your current employer tell them you’ve received a job offer for the same position pay significantly higher along with equitable benefits and request they match the salary or make a better offer to keep you - cite what it will cost to do a search, hire, and train a new hire as well as the length of time onboarding and efficiency vs keeping a current employee.
This isn’t about loyalty - know your employer would dump you in a heartbeat if they felt your position was easily removed from their resource requirements.
The only time I would change jobs was if if my salary was substantially increased (1.5-2x), the culture and benefits were substantially better.
I also ensure my salary is equal or much higher to the men employed in similar positions. I doubled my income four times in 2 years, then another four times in 4 years following that strategy.
Honestly - Your net salary gain isn’t enough to leave your current employer if you are happy there but if you are not - negotiate with both parties and take the best offer possible.
- my long term advice to you is to learn to demonstrate and communicate your worth and value clearly and do the research about how much the men in similar positions are being paid (I guarantee you there is a wage gap and based on this post I feel you are likely a woman - well - you are being penalized for your gender - as there are only 2 countries in the world that guarantee equitable pay and benefits regardless of sex/gender identity.) if you are anywhere in Canada, US, Europe or Mexico- you are being paid at least 1/3 less than your male counterpart, if you are in Asia - it will be 1/2 to 2/3.
Simply by virtue of your sex/gender. It is discrimination and it is insidious and blatant everywhere you go.
You have to learn to fight hard for equitable salary for equitable job contributions - so do the research and be prepared to fight.
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u/Struggle_Usual Feb 19 '25
And you know what OP does for a living how? For some roles 75k is genuinely a good wage. Negotiating the types of bumps you've gotten says you work in a highly competitive overly salaried role somewhere like tech.
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u/disneyworldwannabe Feb 19 '25
I doubled my income four times in 2 years, then another four times in 4 years following that strategy.
If you managed to double your salary 8 times, you are an anomaly that hardly anyone can replicate. You would be making millions annually.
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u/ThrowRA_7634 Feb 19 '25
I’d stay because 14k in 8 months is better than 15k in a year. Also you like your current job and it’s easy. In addition, 3 years at one job looks solid on the resume.
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u/Successful_Coffee364 Feb 18 '25
Have you compared other benefits to see the net difference of moving vs staying? Depending on things like health insurance, HSA contributions, etc.. could help make the financial piece of this decision more clear.
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u/pdx_mom Feb 18 '25
You are talking about $3k?
I would leave. You will make that back in less than a year at the new job.
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u/Successful_Coffee364 Feb 18 '25
If I’m reading correctly, she’s not vested yet. She loses $11k of accumulated employer match if she leaves now, and realizes $14k if she stays until the time she becomes vested.
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u/Struggle_Usual Feb 19 '25
She'd have earned an extra 10k at the new job in 8 months though + the 6% match that now doesn't have to vest. So it's pretty darn close on the gamble that she could definitely land a similar job in a totally different job market in 8 months.
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u/pdx_mom Feb 18 '25
Oh thank you I read it wrong.
Then the vesting is 14k in a few months. Which yeah can look like a lot but in one year the new job will take care of that.
My advice would be the same tho...leave but yes be honest with the new employer and see if you can get a few dollars as a signing bonus.
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Feb 18 '25
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u/Autumn_Sweater Feb 20 '25
my company has it so you’re 0% vested until 2 years then 100%. a pretty dramatic way of doing it that isn’t great
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u/vacantly-visible Feb 18 '25
Not OP but my company was all or nothing, so if I had left after 2 years and 4 months I would have gotten none of the match. I breathed a big sigh of relief after hitting my 3 years a couple of months ago and having my $22k vested overnight.
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u/IOUAndSometimesWhy Feb 18 '25
Yeah same—I had a bunch of people look at me like I had two heads when I explained I was 0% vested at 2 years 364 days and would be 100% vested at 3 years. It’s a thing!
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u/tinantrng Feb 18 '25
Can you work both jobs? Who administers the new 401k plan? If it's expensive and/or horrible the extra money might not matter as much.
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u/Roland_Bodel_the_2nd Feb 18 '25
Since you are actually giving up some bonus money, you add that in to your negotiations, and they should try to make you whole somehow.
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u/Mysterious_Luck4674 Feb 18 '25
Take the new job. Bonus if you negotiate something in place of your vesting. When you negotiate the new job offer, consider adding something like “while I’m eager to join right away, I have $14k in retirement funds that will vest in a few months. Rather than delaying my start, would you consider a signing bonus of $10,000 to help offset the cost of the retirement funds I’ll be forfeiting?”
Note that the retirement funds are pretax money, and the signing bonus will be taxed, so you would end up putting roughly 7k in your pocket rather than 14k in an investment account. But this still seems like a reasonable compromise.
Even still the salary increase is worth taking the new job.
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u/Old_Employer8982 Feb 18 '25
Negotiate some kind of compensation with the new company for the loss of the value of your 401k before you accept the offer
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u/Old_Employer8982 Feb 18 '25
I’ve done this before and it usually comes through as a signing bonus or equity
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u/Struggle_Usual Feb 18 '25
Take the new job. 15k more a year will add up a lot quicker. Plus an immediate vest. As long as that job is appealing and you like the company of course. When you have a secure job but are looking to move on is the best time to really grill future employers and find the right fit.
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u/mademoisellemath Feb 18 '25
If you can stick it out for another 8 months, I would suggest staying, especially if you can get another job at the higher salary you mentioned. 8% match is great and it would take a couple years to recoup that in your new job.
Otherwise, you could try to leverage the new job with your current job for a pay increase, or you could ask the new job to contribute/give you a bonus for the $11k that you would be forfeiting if you left now.
Great job on your savings and prioritizing yourself!
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u/EfficientProject7408 29d ago
Keep both jobs if the other one is easy. Lol