…makes you poor…changing jobs frequently is better for your bank account, according to this guy. (He’s probably right.)
https://www.cnbc.com/2022/08/18/early-retiree-shares-unpopul…
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This can be two edged sword.
If you are in a market with multiple job openings in your field, maybe, if you are in the right industry and the right time.
With frequent job hopping, if you have to move, that takes 90% of your raise away for a year or two with the move expenses if relocating.
If you stay with a company for a while, you get 401K contribution matching with usually takes a few years to vest…added ‘income’ on top of your salary and 401K contribution.
I changed jobs 3 times in 31 years. Got ‘laid off’ after 3 years at first job. Second job was 13 years and department ended so left and got 40% pay raise but moved from low cost area to higher cost area. Last job lasted 17 years.
Retired at 52.2 with enough to live on for the rest of my life in style.
If you’re married to a partner who is willing to commit to saving 30-40% of pay each month to reach the goal, even better. But having kids will usually mean you’ll work a bit later since each kid is going to cost you $300,000 by the time they are out of the nest.
Of course, many folks won’t stay in an ‘industry’ at the same company due to downsizing, relocation, buyouts, industry changes, etc. Few put in 30-40 years other than government employees and Fed workers and even their technology can end their job.
There used to be a half million telegraph operators.
There used to be a million telephone operators.
There used to be a million secretary/stenos/typists.
There used to be 100,000 IBM folks - building mainframes, PCs, etc.
There used to be 300 PC makers from Gateway to Commodore to Radio shack to North Star, etc. Flash in the pan - grew like weeds, went down in flames.
There used to be millions of auto workers. And auto plants.
My dad worked 44 years for Ma Bell. Uncle B worked 46 years for Bell South. Uncle G about the same for NY Tel. Mom had 10 years at AT&T. Aunt A had 45 years at AT&T. Newphew CC had 35 years at a teacher. Newphew KC had about the same. My BIL put in 30 years at IBM - then got laid off ‘early’ with nice benefits.
Now? 5 or more jobs for most in career. Some planned, some not. Even teachers now often job hop after 5 or 10 years. Same for cops, and other municipal employees.
Of course, things like pensions are gone for most - or teachers get ‘pensions’ on a state wide basis so no need for loyalty to a particular system. BTW, Richardson TX is paying $57,500 for teachers now…to start…
The high tech industry pays no pensions but often has attractive stock plans/bonuses. Or other incentives.
Things change a lot faster than 50 years ago with technology improvements.
The ‘computer’, integrated circuit, microcontroller and PC brought massive upheaval to many industries…and lots of new opportunities for companies building/using it. Lots of dead or dying bodies along the way, too.
t.
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Companies definitely do their best to hide salaries from employees. When I started at the government everyone knew everything in terms of pay. Then when I did contracting work, and later moved to another company it was strange to me that no one really knew what levels others were at.
One time I got promoted and I wasn’t sure if I was supposed to say anything to anyone so I didn’t.
Job hopping can definitely up the salary, especially if you don’t have to change locations. I’ve had 4 jobs for 2 years or less but also jobs for 8, 15 and 6 years. Personally I don’t like changing jobs but if I don’t like what I’m doing or the management, I won’t stick around.
The key thing to me is to be observant of what is going on around you. It is pretty easy to see if a company is cutting back and losing business. Also keep an eye on your skills, if you are doing a strange task (whether tech or non-tech related) that isn’t in demand, start looking to gain new experiences. And make sure you are really observant as you get into your later 40s/50s since I’ve seen too many people specialized in non-marketable skills and end up losing their jobs when that task is no longer needed.
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I can vouch for the “strange tasks”. My manager made me his research engineer. I was working on obscure projects no one knew about. I’d report it to him, and I don’t know what he did with it. But my peers really didn’t know what I was doing.
The move to failure analysis saved me. Once I learned the job, people were coming to me for answers to why their parts weren’t working. I started getting visits from one particular VP, too. He was very nice, but it was his way of emphasizing how important something was (and I should give it priority).
So…yeah…if you’re off in a corner and no one knows what you’re doing, that’s not good career-wise.
Defined benefit pensions gave you better pension when you added more years of service. Defined contribution does make your retirement funds portable but pension based on years of service is better for most people. Severance pay can also be better. And there’s lost vacation.
Plus if you have a reputation of being a contributor to the success of the company your friends are more likely to protect your position in a layoff.
Job shoppers may jump right in to move an important project along. But it also takes a while for management to figure out which ones are worth keeping. The quiet and shy may be sharp but are at a disadvantage compared to the extrovert who gets to know everyone (but may not spend much time getting the job done).
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It’s long been know that a company is only going to pay you $1 more than the salary that would cause you to leave for greener pastures.
… and the savvy employee only does enough work to keep from getting fired.
It’s been that way since the 1980s.
intercst
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tele writes,
With frequent job hopping, if you have to move, that takes 90% of your raise away for a year or two with the move expenses if relocating.
You must have been in the wrong industry. In every job change I made, the new employer paid moving expenses, plus some kind of lump sum for incidentals.
Maybe that’s changed in 30 years. I’ve thankfully been out of the job market for a long time.
intercst
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“You must have been in the wrong industry. In every job change I made, the new employer paid moving expenses, plus some kind of lump sum for incidentals.”
A long time ago, it was seldom done.
First job paid a little toward travel from college to IL suburbs…but I didn’t have much.
Second job paid a little in ‘relocation benefits’. Didn’t have much to move anyway, but there is cost to changing driver license, car registration, etc and 1000 mile move with some stuff.
Last job paid to sell my house, buy new house (closing costs), etc. Covered moving van, etc, temp storage. That was 1983. 40% pay increase but had to move from central VA (low cost of living) to DC area. Still was very good move.
Transfer to TX the same. Bought/sold house, most expenses paid.
But for many in high tech industries, they’ll pay something - but not enough cover it. Of course, if you’re getting a 30% increase in pay, great - you can cover it…but you got to be real good to get 30% pay boost, or have been ‘underpaid’ where you are.
Heck, move to Silicon Valley, you’ll need 50+% more to cover living expenses compared to Dallas or even DC suburbs…unless you live in your van…
t.
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interest wrote Maybe that’s changed in 30 years.
It has and so have pensions. My guess is health insurance will likely follow.
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GWPotter writes,
interest wrote Maybe that’s changed in 30 years.
It has and so have pensions. My guess is health insurance will likely follow.
That would be a good thing. It never made economic sense to tie health insurance to employment.
intercst
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It has and so have pensions. My guess is health insurance will likely follow.
Depends on the industry. My wife was thinking about taking a job in Portland. The company offered to pay moving expenses, help find new housing, provide interim corporate housing, plus cash. There were other miscellaneous bennies, like a guided walking tour of the neighborhood, etc.
Prospective employees tend to under estimate how much leverage they have when negotiating for a job. HR might claim a job is a certain level and they have salary bands, blah, blah, blah. But job levels and salary bands are just made up numbers and can be safely ignored. The hiring manager has a slot that needs to be filled and doesn’t really care what HR thinks. The salary isn’t coming out of her pocket. HR will whine and then make an exception “just this one time.”
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It never made economic sense to tie health insurance to employment.
This true. Medicare for everyone is the answer.
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It never made economic sense to tie health insurance to employment.
Tying it was a work-around for the economically illiterate wage & price controls.
Medicare for everyone is the answer.
Medicare is a good deal for retirees because they only pay 20% of the total premium and current workers pay the other 80% (FICA) for them.
Just who is going to pay the 80% when everybody is on Medicare?
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I think timing makes a big difference. I realized this year that I’ve stayed at my company WAY too long. Got a job offer, with a 12% salary increase… but realized it wasn’t such a great deal for me, at almost age 58, because of three years to vest in the 401k, giving up my additional contributions by my current company to my defined contribution pension plan, having to wait a year and a half to qualify for profit sharing (and not being given a clear answer on likely amounts, etc), losing vacation time….
Just was t worth it now, and all of those things are a much bigger deal to me now than they were 10 years ago (when I should have made the jump).
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Prospective employees tend to under estimate how much leverage they have when negotiating for a job. HR might claim a job is a certain level and they have salary bands, blah, blah, blah. But job levels and salary bands are just made up numbers and can be safely ignored. The hiring manager has a slot that needs to be filled and doesn’t really care what HR thinks. The salary isn’t coming out of her pocket. HR will whine and then make an exception “just this one time.”
It REALLY depends on the company. I’m hiring right now and am really bound by the salary band and my budget.
“It never made economic sense to tie health insurance to employment.”
Tying health benefits to work started with the price controls during WW2. Companies couldn’t raise pay to raid other companies workers - and wages were controlled. Thus, workers got more goodies by the government allowing companies to provide medical benefits.
Of course, at that time, there were zero expensive drugs. There were no MRIs or CAT scans, cancer treatments, heart bypass operations. If you had a heart attack, you went home to ‘rest up’ before going back to work a few months later. No fancy diagnostic stuff, no cancer treatments. About the highest hi-tech stuff was x-ray machines. Removing an infected appendix.
Employees got the benefits ‘free’ without taxes. There wasn’t much treatment other than anti-biotics for colds and infections, setting broken bones, etc.
Now, golly gee - hospitals full of million dollar machines CAT scanners, MRIs, all sorts of electronic monitors, and we do bypass operations, cancer operations, plastic surgery, etc. Some very expensive drugs to keep you alive.
“Tying it was a work-around for the economically illiterate wage & price controls.”
For companies, it was part of ‘job retention’. You got ‘free’ health care and the company could write them off as expenses - good for them. It continued. To be competitive a company had to offer health benefits. Always had them for my career and never ‘paid’ for them. Part of the benefit umbrella plan. Now dependent health care has gone way up - from essentially free in the 1940s to lots of $$$ and that you don’t get for free.
If you look to Europe…well, lots of Physician Assistants will treat you. You’ll pay 8-10-15% of your paycheck for your benefits - healthcare and retirement plans, plus 20-22% Value Added Tax on everything you buy. A giant ‘sales tax’ if you will. Someone has to pay for the benefits and it will be you.
Vermont and Colorado looked at doing it - and figured they’d have to double state income taxes to pay for it.
You think the feds can magically provide Medicare for all without massive tax increases to cover it? Dream on.
You think companies will ‘give’ you all the money it costs them for insurance? Heck no - it’s a write off for them, and at a 20% corporate tax rate, you won’t even get 80% of what it costs them. Then you’ll get to pay income taxes on that money - fed and state if applicable. Then pay the higher fed taxes to pay for Medicare for all.
Right now around here, the doc organizations are trying to squeeze everyone into Medicare Advantage - giant HMO type operations. The only referrals are to other members of the doc organization. My current doc switched, but allowed ‘legacy’ regular Medicare folks to continue as Medicare. Anyone now turning 65 has no choice. Join Medicare Advantage or goodbye and good luck finding a non-Medicare Advantage doc here.
t.
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And there’s lost vacation [in switching companies]
When my company emerged from bankruptcy, my five weeks of vacation became four. We also lost about five paid holidays a year…and were required to use vacation days for the days between Christmas and New Year’s. So, from one year to the next, I got two weeks less of “usable vacation,” and didn’t have to switch companies to do it.
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Medicare is a good deal for retirees because they only pay 20% of the total premium and current workers pay the other 80% (FICA) for them.
Just who is going to pay the 80% when everybody is on Medicare?
It wouldn’t be that hard. Employer-provided health insurance is non-taxed benefit to the employee but a tax deductible expense to the employer. Right there is a big pile of money. Reducing the 20% insurance company skim to Medicare’s more manageable 3% also creates a big pile of money.
One thing many people don’t realize is that most of the ACA was reforms to Medicare. If fire up the way back machine to 2010, there were many example of politicians and pundits with quivering lips explain if this of communism were to be implemented health care costs would explode, millions would be denied access, 1/3 of all doctors would resign (yes, really), the tax increases would cause the economy to implode, and as stupid as it sounds, in their fevered minds some low IQ voters actually thought there would be death panels.
Fast forward to 2022 and none of that happened. There were no death panels (duh), Medicare costs increased at the lowest rates on record, doctors didn’t resign, the economy grew for 127 months which is the longest in recorded history, and the ACA itself cost much less than originally projected. As an aside, when was the last time you heard of a government program costing less than projected? Also lost in this is that 20 million people gained health care coverage.
To be clear, not all of ACA worked the way it was supposed to, and Congress has been busy trying to restrict access to health care and increase the costs with some success, but overall it was an RBI triple. We just need to keep applying the same lessons we already learned.
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It REALLY depends on the company. I’m hiring right now and am really bound by the salary band and my budget.
Within reason of course. Obviously they aren’t going to pay a mid-level person a c-level salary. If your case, if you had a candidate that met your needs, you’d be willing to go to the top of the band, right? Many candidates don’t realize that offers come at the low end of the band.
The real key is to develop in demand job skills. I always tell people to thoroughly learn Excel, like expert level. Virtually all organizations need spreadsheets, tracking, charts, projections, etc. If you are the “Excel guy” you’ll be invaluable. That’s huge when salary negotiations come up.
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"Medicare is a good deal for retirees because they only pay 20% of the total premium and current workers pay the other 80% (FICA) for them.
Just who is going to pay the 80% when everybody is on Medicare?"
Like every other developed country, the other 80% will come from taxes (preferably from some simplified tax system where ALL income is taxed on a progressive scale regardless of where it came from. Or maybe a VAT.)
And the retirees paid their taxes along the way.
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