A Bird In Hand
Recycles dryer sheets
- Joined
- May 10, 2012
- Messages
- 137
Sometimes golden handcuffs become more valuable the longer you stick around at work. For example, achieving a certain number of years of service may result in a much more attractive pension, stock options, or employer-subsidized health insurance. In these cases, I'm sure the handcuffs can make the decision to ER -- or even just to leave your current employer for another -- much more difficult.
I was thinking about the golden handcuffs with my employer, and I'm starting to realize that they're more like silver handcuffs, or maybe even bronze. To wit:
- 401(k) matching. The generous ~$12k/year matching (currently, and likely to remain there since my salary is in the very flat part of the curve) has been a big factor in building my retirement account over the years. But as time goes on that $12k annually starts looking pretty small. In good years our retirement accounts go up by $100k or more, so the $12k gets lost in the noise. If I ESR in 5-10 years as planned, the $12k becomes $6k. Hardly a ripple in the pool of market returns; FIRECalc says 100% with or without it.
- Tuition assistance. My employer and DW's have tuition assistance programs for our kids. Combined it's about $10k/year per kid. We have three young children, making it a potential $120k benefit. But that $10k is fixed and hasn't been adjusted in years. It might not amount to much in 12-20 years when we'd be in a position to use it. Is it enough to justify continue working 15 years from now if we don't need to? Hmmm...
- Employer-subsidized health insurance. Not long ago this probably would have been considered golden handcuffs. But in a cost-cutting move a couple years ago, the program froze the benefit so that instead of subsidizing a percentage of HI premiums in retirement, a fixed amount was specified that year, never again to be adjusted for inflation. Not only that, but our modest retirement income is likely to result in ACA-subsidized premiums on par with the $5k we're paying annually right now for my employer-subsidized HI.
Taken together, I think the 401(k) and tuition assistance benefits are very nice, and will undoubtedly make our financial lives a bit easier should I remain with my current employer in ESR. But I no longer view them as the golden handcuffs that I once did.
Are any of your golden handcuffs depreciating?
I was thinking about the golden handcuffs with my employer, and I'm starting to realize that they're more like silver handcuffs, or maybe even bronze. To wit:
- 401(k) matching. The generous ~$12k/year matching (currently, and likely to remain there since my salary is in the very flat part of the curve) has been a big factor in building my retirement account over the years. But as time goes on that $12k annually starts looking pretty small. In good years our retirement accounts go up by $100k or more, so the $12k gets lost in the noise. If I ESR in 5-10 years as planned, the $12k becomes $6k. Hardly a ripple in the pool of market returns; FIRECalc says 100% with or without it.
- Tuition assistance. My employer and DW's have tuition assistance programs for our kids. Combined it's about $10k/year per kid. We have three young children, making it a potential $120k benefit. But that $10k is fixed and hasn't been adjusted in years. It might not amount to much in 12-20 years when we'd be in a position to use it. Is it enough to justify continue working 15 years from now if we don't need to? Hmmm...
- Employer-subsidized health insurance. Not long ago this probably would have been considered golden handcuffs. But in a cost-cutting move a couple years ago, the program froze the benefit so that instead of subsidizing a percentage of HI premiums in retirement, a fixed amount was specified that year, never again to be adjusted for inflation. Not only that, but our modest retirement income is likely to result in ACA-subsidized premiums on par with the $5k we're paying annually right now for my employer-subsidized HI.
Taken together, I think the 401(k) and tuition assistance benefits are very nice, and will undoubtedly make our financial lives a bit easier should I remain with my current employer in ESR. But I no longer view them as the golden handcuffs that I once did.
Are any of your golden handcuffs depreciating?