200k independent contractor or 110k fed?

[Anonymous]

I have a friend in IT and he makse a lot more going independent. The contracts are awarded 6-12 months out, so he also knows well in advance if he's not going to be renewed.

Now of course in IT, he can get another position relatively easily if he needs it.

As a contractor, you can also charge to your business some things you can't currently, like your cellphone and internet (assuming you telework sometimes). There's $200/month pre-tax = another $2,400 year.

[Anonymous]

Anonymous wrote:I have a friend in IT and he makse a lot more going independent. The contracts are awarded 6-12 months out, so he also knows well in advance if he's not going to be renewed.

Now of course in IT, he can get another position relatively easily if he needs it.

As a contractor, you can also charge to your business some things you can't currently, like your cellphone and internet (assuming you telework sometimes). There's $200/month pre-tax = another $2,400 year.

What is 'a lot more'? $330k

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Contractor. Some have great benefits.

It is an independent contractor position, which means that individual is their own business. Here are things to consider: self employment tax (7.5%), health insurance (about 10K), 401K match (varies, lets say 6%), no pay on vacation or holidays (lets say 35 days a year).

So, 200K is $100/hr. 88/hr after percent benefits -172Kyr. 35 days off is 35*88*8, $24600. Subtract out health insurance, you are down to 140K. Now, no-one is marketing for you. You want to stay employed. Figure you need to spend 10% of your time on that; 17.2K. Suddenly your net is 125K

For the 125, you have to deal with invoicing, book keeping. And the uncertainty that goes with being independent.

I would probably stat with the gov't.

There are 10 federal holidays per year. Doubt this person should base the calculations on taking 25 (5 weeks!) of unpaid vacation/sick leave per year.

Health insurance is huge. Do you have a spouse/partner who can cover you for this for considerably less than 10K/year?

Marketing: not all indep contractors need to spend time marketing themselves. Many of these positions are full-time, steady, more or less permanent "basically fed" jobs.

Definitely consider flexibility. For some of us, it's worth a whole lot of $.

Yeah, but how much vacation are you going to take? Will you be able to work on federal holidays? (I just used the numbers I get from my company, and I do take all of the vacation and holidays).

And if you don't market for your self, who will?

[Anonymous]

OP here, agree with 615 and thanks all for the discussion points! I really don't think I need to market myself much, I'm an 29 year old aerospace engineer focused on orbital mechanics. Not many of us and space is a growing field, think SpaceX. Have a wife and young child dependant on me so risk is a big deal, although I could survive 6 months with no pay and not dip into retirement savings. I've been a huge saver.

I'm probably going to stay fed for now and see what else comes up. Maybe a mid-size contracting firm would be great to get the feel for a smaller place. Wish I knew how to get ahead, but i know staying fed wont do it since years of service seem to matter more than productivity.

[Anonymous]

Anonymous wrote:OP here, agree with 615 and thanks all for the discussion points! I really don't think I need to market myself much, I'm an 29 year old aerospace engineer focused on orbital mechanics. Not many of us and space is a growing field, think SpaceX. Have a wife and young child dependant on me so risk is a big deal, although I could survive 6 months with no pay and not dip into retirement savings. I've been a huge saver.

I'm probably going to stay fed for now and see what else comes up. Maybe a mid-size contracting firm would be great to get the feel for a smaller place. Wish I knew how to get ahead, but i know staying fed wont do it since years of service seem to matter more than productivity.

615 here. I would look into the companies that do that type of work if you want to make more than a GS 13/14 makes. If you want to stay technical, it is really hard to advance beyond a 14.

I am in a field that is not rocket science, but still in computational physics; I decided 1) not to go into management, and 2) not to go government. I am in my 50's, still doing fun technical/scientific R & D and make decent money. I work for one of the bigger Defense Contracting firms. You could research those firms; you probably know who does interesting work based on your time as a government employee.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here, agree with 615 and thanks all for the discussion points! I really don't think I need to market myself much, I'm an 29 year old aerospace engineer focused on orbital mechanics. Not many of us and space is a growing field, think SpaceX. Have a wife and young child dependant on me so risk is a big deal, although I could survive 6 months with no pay and not dip into retirement savings. I've been a huge saver.

I'm probably going to stay fed for now and see what else comes up. Maybe a mid-size contracting firm would be great to get the feel for a smaller place. Wish I knew how to get ahead, but i know staying fed wont do it since years of service seem to matter more than productivity.

615 here. I would look into the companies that do that type of work if you want to make more than a GS 13/14 makes. If you want to stay technical, it is really hard to advance beyond a 14.

I am in a field that is not rocket science, but still in computational physics; I decided 1) not to go into management, and 2) not to go government. I am in my 50's, still doing fun technical/scientific R & D and make decent money. I work for one of the bigger Defense Contracting firms. You could research those firms; you probably know who does interesting work based on your time as a government employee.

Interesting, We rarely see aerospace and physics careers in this forum! I am glad I am not alone, hard to coordinate career planning with lawyers whose path is so different.

OP, I am in aerospace as well (NASA) and it is definitely a very exciting time. If I was young and could handle the risk, I would be jumping into one of the new start ups in the aerospace field, such as spire, planet, one web, etc. The start ups all are trying to do ambitious and interesting things. However, just like spaceX, none of them are profitable at this point, most don't even have significant revenue, and are all dependent upon venture funding. So this new wave of space 2.0 is still a tentative process. This happened at the end of the last tech bubble, when iridium and all those other telecom space programs got off the ground and then went bankrupt. This time is different, since costs for launch and space hardware have dropped significantly, so it could be the transformative time it looks to be.

However, it sounds like you have a kid and potentially a stay at home wife? So it comes down to how much risk you can take with them, like do you have family that can bail you out if your start up implodes, or do you stand as the firewall between homelessness and your family.

As far as ultimate career path, I agree with PP who recommended a defense contractor such as one of the big five. That offers you the greatest chance for a higher income, stable career, and interesting technical work. Working on a mid-size contractor can trap you in a body shop position which may not be as interesting work. Also starting your own contracting company would be interesting, but eventually most your time would have to be in business development and tactical management, then the actual hands-on science.

One of the significant risks in your specific niche is that there are a lot of companies doing orbit mechanics for lights out operation, such as orbit logic; a lot of these new start ups are turning to the software solutions to do all of their orbit maintenance. I don't know if you're technical skills will continue to be in demand as the software and automation improves. They are throwing a lot of money at these problems because like you said there are not many of you, and it's cheaper to fill with software solution then train up staff. If you stay in the federal government, it's likely your job would be more secure, since generally federal missions are far more risk averse and won't jump to lights out operation.

One anecdotal note, I have never seen a federal employee engineer return to the private sector, after almost a decade of work here. I don't know, if it's because they don't want to leave, or because they can't get work elsewhere because of some bias against a government engineer, or what. One other thing is the risk of conflict of interest and such, if you apply for one of the big five defense contractors, they have a whole section where they query you about if you are currently a federal employee, and if any of your projects interest the with their contracts. I wonder if given two candidates they would always go to the non-federal employee to avoid any hint of appearance of impropriety.

Perhaps PP 615 can comment on the likelihood of transitioning from Federal employment directly to a big five. Has anyone in your division everything directly hired from the government?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here, agree with 615 and thanks all for the discussion points! I really don't think I need to market myself much, I'm an 29 year old aerospace engineer focused on orbital mechanics. Not many of us and space is a growing field, think SpaceX. Have a wife and young child dependant on me so risk is a big deal, although I could survive 6 months with no pay and not dip into retirement savings. I've been a huge saver.

I'm probably going to stay fed for now and see what else comes up. Maybe a mid-size contracting firm would be great to get the feel for a smaller place. Wish I knew how to get ahead, but i know staying fed wont do it since years of service seem to matter more than productivity.

615 here. I would look into the companies that do that type of work if you want to make more than a GS 13/14 makes. If you want to stay technical, it is really hard to advance beyond a 14.

I am in a field that is not rocket science, but still in computational physics; I decided 1) not to go into management, and 2) not to go government. I am in my 50's, still doing fun technical/scientific R & D and make decent money. I work for one of the bigger Defense Contracting firms. You could research those firms; you probably know who does interesting work based on your time as a government employee.

Interesting, We rarely see aerospace and physics careers in this forum! I am glad I am not alone, hard to coordinate career planning with lawyers whose path is so different.

OP, I am in aerospace as well (NASA) and it is definitely a very exciting time. If I was young and could handle the risk, I would be jumping into one of the new start ups in the aerospace field, such as spire, planet, one web, etc. The start ups all are trying to do ambitious and interesting things. However, just like spaceX, none of them are profitable at this point, most don't even have significant revenue, and are all dependent upon venture funding. So this new wave of space 2.0 is still a tentative process. This happened at the end of the last tech bubble, when iridium and all those other telecom space programs got off the ground and then went bankrupt. This time is different, since costs for launch and space hardware have dropped significantly, so it could be the transformative time it looks to be.

However, it sounds like you have a kid and potentially a stay at home wife? So it comes down to how much risk you can take with them, like do you have family that can bail you out if your start up implodes, or do you stand as the firewall between homelessness and your family.

As far as ultimate career path, I agree with PP who recommended a defense contractor such as one of the big five. That offers you the greatest chance for a higher income, stable career, and interesting technical work. Working on a mid-size contractor can trap you in a body shop position which may not be as interesting work. Also starting your own contracting company would be interesting, but eventually most your time would have to be in business development and tactical management, then the actual hands-on science.

One of the significant risks in your specific niche is that there are a lot of companies doing orbit mechanics for lights out operation, such as orbit logic; a lot of these new start ups are turning to the software solutions to do all of their orbit maintenance. I don't know if you're technical skills will continue to be in demand as the software and automation improves. They are throwing a lot of money at these problems because like you said there are not many of you, and it's cheaper to fill with software solution then train up staff. If you stay in the federal government, it's likely your job would be more secure, since generally federal missions are far more risk averse and won't jump to lights out operation.

One anecdotal note, I have never seen a federal employee engineer return to the private sector, after almost a decade of work here. I don't know, if it's because they don't want to leave, or because they can't get work elsewhere because of some bias against a government engineer, or what. One other thing is the risk of conflict of interest and such, if you apply for one of the big five defense contractors, they have a whole section where they query you about if you are currently a federal employee, and if any of your projects interest the with their contracts. I wonder if given two candidates they would always go to the non-federal employee to avoid any hint of appearance of impropriety.

Perhaps PP 615 can comment on the likelihood of transitioning from Federal employment directly to a big five. Has anyone in your division everything directly hired from the government?

615 here. I have seen people go from Gov't to contractor and vice versa. My work is in the defense arena, which is different than NASA. Usually the transition happens at the more senior level. For example, I could possibly transition to a DARPA PM. Then, after my term is up (5 years), I can write my own ticket in private industry. The reason why I will not is I enjoy being hands on. In DoD world, the Gov't people are mostly too mission focused to be that hands on in R & D. (except at the labs, but they do not pay well).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here, agree with 615 and thanks all for the discussion points! I really don't think I need to market myself much, I'm an 29 year old aerospace engineer focused on orbital mechanics. Not many of us and space is a growing field, think SpaceX. Have a wife and young child dependant on me so risk is a big deal, although I could survive 6 months with no pay and not dip into retirement savings. I've been a huge saver.

I'm probably going to stay fed for now and see what else comes up. Maybe a mid-size contracting firm would be great to get the feel for a smaller place. Wish I knew how to get ahead, but i know staying fed wont do it since years of service seem to matter more than productivity.

615 here. I would look into the companies that do that type of work if you want to make more than a GS 13/14 makes. If you want to stay technical, it is really hard to advance beyond a 14.

I am in a field that is not rocket science, but still in computational physics; I decided 1) not to go into management, and 2) not to go government. I am in my 50's, still doing fun technical/scientific R & D and make decent money. I work for one of the bigger Defense Contracting firms. You could research those firms; you probably know who does interesting work based on your time as a government employee.

Interesting, We rarely see aerospace and physics careers in this forum! I am glad I am not alone, hard to coordinate career planning with lawyers whose path is so different.

OP, I am in aerospace as well (NASA) and it is definitely a very exciting time. If I was young and could handle the risk, I would be jumping into one of the new start ups in the aerospace field, such as spire, planet, one web, etc. The start ups all are trying to do ambitious and interesting things. However, just like spaceX, none of them are profitable at this point, most don't even have significant revenue, and are all dependent upon venture funding. So this new wave of space 2.0 is still a tentative process. This happened at the end of the last tech bubble, when iridium and all those other telecom space programs got off the ground and then went bankrupt. This time is different, since costs for launch and space hardware have dropped significantly, so it could be the transformative time it looks to be.

However, it sounds like you have a kid and potentially a stay at home wife? So it comes down to how much risk you can take with them, like do you have family that can bail you out if your start up implodes, or do you stand as the firewall between homelessness and your family.

As far as ultimate career path, I agree with PP who recommended a defense contractor such as one of the big five. That offers you the greatest chance for a higher income, stable career, and interesting technical work. Working on a mid-size contractor can trap you in a body shop position which may not be as interesting work. Also starting your own contracting company would be interesting, but eventually most your time would have to be in business development and tactical management, then the actual hands-on science.

One of the significant risks in your specific niche is that there are a lot of companies doing orbit mechanics for lights out operation, such as orbit logic; a lot of these new start ups are turning to the software solutions to do all of their orbit maintenance. I don't know if you're technical skills will continue to be in demand as the software and automation improves. They are throwing a lot of money at these problems because like you said there are not many of you, and it's cheaper to fill with software solution then train up staff. If you stay in the federal government, it's likely your job would be more secure, since generally federal missions are far more risk averse and won't jump to lights out operation.

One anecdotal note, I have never seen a federal employee engineer return to the private sector, after almost a decade of work here. I don't know, if it's because they don't want to leave, or because they can't get work elsewhere because of some bias against a government engineer, or what. One other thing is the risk of conflict of interest and such, if you apply for one of the big five defense contractors, they have a whole section where they query you about if you are currently a federal employee, and if any of your projects interest the with their contracts. I wonder if given two candidates they would always go to the non-federal employee to avoid any hint of appearance of impropriety.

Perhaps PP 615 can comment on the likelihood of transitioning from Federal employment directly to a big five. Has anyone in your division everything directly hired from the government?

615 here. I have seen people go from Gov't to contractor and vice versa. My work is in the defense arena, which is different than NASA. Usually the transition happens at the more senior level. For example, I could possibly transition to a DARPA PM. Then, after my term is up (5 years), I can write my own ticket in private industry. The reason why I will not is I enjoy being hands on. In DoD world, the Gov't people are mostly too mission focused to be that hands on in R & D. (except at the labs, but they do not pay well).

True, I had neglected to think of that govt-private transition. It does happen at branch head level and such, often once they are 55 and eligible for pension as well as work in private contracting. I haven't seen it at technical worker bee level, mid-career like OP and myself. Have you seen much at that career stage? Do you sense any barrier for OP to migrate to a big DOD contractor as junior employee? OP, are you in defense or civilian space? New administration may shift priorities so something else to consider.

[Anonymous]

Both salaries are tough to make it in this area

[Anonymous]

Anonymous wrote:Both salaries are tough to make it in this area

Pretty typical for engineers unless advance to director or management. Most colleagues live in Burke, Olney or further.

[Anonymous]

Anonymous wrote:Both salaries are tough to make it in this area

Not really. First, the engineering jobs are not downtown mostly. NRO is in chantilly, for example. NGA is springfield. Many of the jobs are in the Dulles corridor.

Personally, I live comfortably on my salary (mid 100's) in central fairfax county (though I have been here for 20 years).

[Anonymous]

Anonymous wrote:200k independent contractor position or 110 comfy fed position? The math seems to suggest I make out with 50k more after benefits are included.

Contractor, no doubt.

More net money, more flexibility, more learning and staying productive.

Now, it's not for everyone. If you prefer the bureaucrat life, the Fed job will make more sense.

[Anonymous]

OP here. Well this is quite a fantastic discussion.

1203, I agree with all your points, but I'm not as optimistic about these space initiatives becoming incredibly successful. You hit the nail on the head about a lot of the engineering side of mission planning becoming automated. The Silicon Valley folks honestly don't care about the spacecraft, they see it as a cell tower, and are demanding solutions for mission planning that an IT guy could manage.

I love where I'm at now, but looking for more of a challenge. Maybe the answer is a gov to gov switch to something a bit more operational.

As for a mid career fed, I've seen perspective employees not really value my government experience. The last job offer I had they wanted to start me off working their help line desk rather than sit with their clients I would be perfect for. Seems to be that private industry sees federal engineers as needing a bit of retooling to get back up to speed. I actually can't argue with that, but the amount seems excessive. There may have been some worry about a conflict of interest too that led into into keeping me back from clients for awhile. It is a suprising given how easy I can land interviews and job offers, but without much of a pay increase. I've applied to three places in the last 18 months.

As for my fall back net, there isn't any family to go to with money issues. However, if I'm going to take risk I thought now would be time before I have more kids or upcoming college payments to worry about. It is amazing to not have to worry about my next paycheck.

[Anonymous]

Anonymous wrote:OP here, agree with 615 and thanks all for the discussion points! I really don't think I need to market myself much, I'm an 29 year old aerospace engineer focused on orbital mechanics. Not many of us and space is a growing field, think SpaceX. Have a wife and young child dependant on me so risk is a big deal, although I could survive 6 months with no pay and not dip into retirement savings. I've been a huge saver.

I'm probably going to stay fed for now and see what else comes up. Maybe a mid-size contracting firm would be great to get the feel for a smaller place. Wish I knew how to get ahead, but i know staying fed wont do it since years of service seem to matter more than productivity.

OP, I'm a physicist and aerospace engineer. Former fed who was in a non-technical role, and I'm now I'm a technical person again in the private sector (though not in aerospace specifically). Except for the higher salary, there is very little benefit to being a fed contractor. You typically get the worst work, and the feds look down on you. This was more or less what I was explicitly told when I was considering a technical role with NASA.

For non-defense work, outside of SpaceX and some of the small satellite companies cropping up, you aren't going to find a lot of interesting roles outside of Federal government. But SpaceX and the small satellite companies (many in California) are pretty cool. I can't comment as much on defense work, and you've gotten good advice from other people here. In general, though, aerospace is a pretty stodgy field (for good reason), and that can feel a little stifling as you get older. It's part of why I'm applying my technical skills in a different sector.

My advice is always to follow the interesting work. As you've noted, finding jobs that interest you is not going to be so hard for someone with your background. But be very thoughtful about what you want your career trajectory to look like. Do you want to stay in a technical role? Or move into a management role? Do you want to be on the business side of things and have the ability to set technology strategy? You're pretty early in your career, so you've got a lot of time to do a variety of things. But be mindful of them, so you can get opportunities early and you don't end up 30 years from now wondering what you've done.

[Anonymous]

OP, you need to look into conflict of interest laws for Feds. They are pretty specific with regard to what you can and can't do after moving to the private sector and for how long.