There’s often an emphasis on seeking higher pay when moving up in your career. But unless you’re getting a major increase, an increase in pay doesn’t automatically mean a better job. To truly be happy in a new position you need to consider the benefits they offer, in addition to the salary.
Here are some things to consider before accepting your next job offer:
Can Higher Pay Outweigh Benefits?
Some employers may entice you with a higher than average salary, but offer no medical benefits. In that situation, it’s almost always a better choice to go with the job offer that offers some healthcare benefits
But not all healthcare benefits were made equal:
- How much of the premium will a potential employer cover?
- Do they offer dental and vision coverage?
- Do they have a cafeteria plan, which allows you to choose pre-tax benefits like Flexible Spending Accounts?
Ask the employer if you can review their health insurance plan options. And don’t be afraid to have them explain the different plans to you, so you can choose which one is a good fit for your lifestyle.
A potential employer who doesn’t offer retirement options may not be worth the bigger paycheck—unless the extra pay is enough to add to your own retirement plan.
A 401(k) plan is a popular option many employers offer. The IRS allows up to $19,500 of your yearly income to go into your 401(k). And some employers will offer matching contributions, up to a designated percentage.
Even better than a 401(k) is a defined-benefit plan. This plan is not affected by market performance. That means the risk of investment is on the company and poor market performance won’t affect your retirement. The only downside to this option is if your employer goes bankrupt. Then they won’t be able to fund your pension.
If that seems like an enormous risk to you, you won’t be completely out of a pension. Defined-benefit plans are protected by Pension Benefit Guaranty Corporation. Still, your benefits may be reduced. With a 401(k), the investment risk and the potential gains are all your responsibility.
Are You Considering a Higher Pay or Benefits?
There’s much more to consider with healthcare and retirement and how they add to your overall compensation. If you’re in the market for a new job, partner with ICR and we’ll help you consider the options offered by each potential employer.
Start your job search today!
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