Fed CPA considering a job in the private sector...How much money is worth giving up the stability?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I am a CPA in a niche field and regularly get multiple messages from recruiters. I am talking to one this week and possibly another next week. I am in the 4.4% pension deduction category.

Total Comp at my current job is 124,846(approximately 109k base plus 15.5k pension). I am not including the TSP match since most jobs provide a similar match to the FED 5%.

Seeking opinions. I wouldn't leave for less than my current comp, but what is the $$ you would leave the stability of the federal government given the option?

Could you explain what the "plus 15.5k pension" means ?

If your base salary is $109,000 less 4.4%, your real base is $104,204. Is this correct ?

The stability of a federal job is worth about double your current base (as I do not understand the $15,500 pension that you added into your "total compensation".

OP here,

I agree my real base is about 104k.

The 15.5K I include in my total comp is what my job pays toward my pension. It will pay out 36,000 a year when I am 57, if my income stays the same as it is now. This is separate from the 401K/TSP match.

Thats why I include it in my total compensation. If I had that extra money, Id invest it anyways.

Thank you for responding to my question.

The issue is whether or not you are fully vested in the pension contribution. If not fully vested, then it should not be considered income yet. how long until vested and eligible to receive pension benefits ? TIA

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I am a CPA in a niche field and regularly get multiple messages from recruiters. I am talking to one this week and possibly another next week. I am in the 4.4% pension deduction category.

Total Comp at my current job is 124,846(approximately 109k base plus 15.5k pension). I am not including the TSP match since most jobs provide a similar match to the FED 5%.

Seeking opinions. I wouldn't leave for less than my current comp, but what is the $$ you would leave the stability of the federal government given the option?

Could you explain what the "plus 15.5k pension" means ?

If your base salary is $109,000 less 4.4%, your real base is $104,204. Is this correct ?

The stability of a federal job is worth about double your current base (as I do not understand the $15,500 pension that you added into your "total compensation".

OP here,

I agree my real base is about 104k.

The 15.5K I include in my total comp is what my job pays toward my pension. It will pay out 36,000 a year when I am 57, if my income stays the same as it is now. This is separate from the 401K/TSP match.

Thats why I include it in my total compensation. If I had that extra money, Id invest it anyways.

Thank you for responding to my question.

The issue is whether or not you are fully vested in the pension contribution. If not fully vested, then it should not be considered income yet. how long until vested and eligible to receive pension benefits ? TIA

Already vested, but I’d have to stay for 25 more years to get the 36,000. It would be approximately $9,500 a year if I left now, but I’d have to wait 30 years.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I am a CPA in a niche field and regularly get multiple messages from recruiters. I am talking to one this week and possibly another next week. I am in the 4.4% pension deduction category.

Total Comp at my current job is 124,846(approximately 109k base plus 15.5k pension). I am not including the TSP match since most jobs provide a similar match to the FED 5%.

Seeking opinions. I wouldn't leave for less than my current comp, but what is the $$ you would leave the stability of the federal government given the option?

Could you explain what the "plus 15.5k pension" means ?

If your base salary is $109,000 less 4.4%, your real base is $104,204. Is this correct ?

The stability of a federal job is worth about double your current base (as I do not understand the $15,500 pension that you added into your "total compensation".

OP here,

I agree my real base is about 104k.

The 15.5K I include in my total comp is what my job pays toward my pension. It will pay out 36,000 a year when I am 57, if my income stays the same as it is now. This is separate from the 401K/TSP match.

Thats why I include it in my total compensation. If I had that extra money, Id invest it anyways.

Thank you for responding to my question.

The issue is whether or not you are fully vested in the pension contribution. If not fully vested, then it should not be considered income yet. how long until vested and eligible to receive pension benefits ? TIA

Already vested, but I’d have to stay for 25 more years to get the 36,000. It would be approximately $9,500 a year if I left now, but I’d have to wait 30 years.

Ok. You're 32, you've been a fed for 9 or 10 years, your MRA is 57. If your salary grows at 2% per year, you would be making ~170k at 57, and your annual pension if you retired then would be around $57000+ the supplement of about $25000 which would go until 62, at which point you could (possibly) take social security if you are not otherwise working.

Now, you'll hit 25 years of service around 48, which means that if your agency ran a VERA any time after you hist 25 years of service, you could immediately peace out, secure the health insurance and pension (only around $40,000 if you leave at 48, but you'll get a supplement of ~$20000 from age 57 until 62), and find something else to do.

The problem is that you're talking about potentially reducing to a one-income household in the future. I could make a case for going private now for say a 50% raise (and commensurate 401k match and health insurance and vacation), but that will put you in a much riskier position if you become a one-income household. Especially if the CPA industry ends up being targeted by AI. It feels like you would be in a much better position if you took advantage of training and up-skilling opportunities at your agency, and regularly apply to open positions in higher grades.

[Anonymous]

I'd reconsider having your wife stay home. $200K with kids is good money and will allow you to save for retirement and their education. Plus if you're a fed hopefully your job is flexible so you can handle sick days.

[Anonymous]

How old are you? I made more than that when I left private sector in 2004. You are severely underpaid unless you are just out of school.

[Anonymous]

Anonymous wrote:I'd reconsider having your wife stay home. $200K with kids is good money and will allow you to save for retirement and their education. Plus if you're a fed hopefully your job is flexible so you can handle sick days.

Do not listen to this person. It’s a good way to be DCUM poor.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I'd reconsider having your wife stay home. $200K with kids is good money and will allow you to save for retirement and their education. Plus if you're a fed hopefully your job is flexible so you can handle sick days.

Do not listen to this person. It’s a good way to be DCUM poor.

Your response makes no sense. I am suggesting OP's wife continue to work since they have about a 50/50 split of income now.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I'd reconsider having your wife stay home. $200K with kids is good money and will allow you to save for retirement and their education. Plus if you're a fed hopefully your job is flexible so you can handle sick days.

Do not listen to this person. It’s a good way to be DCUM poor.

Exactly. You need to specialize. One of you focuses on career and the other on the home front.

You should go private and your DW stay home. The govt will always be there for you to return to if you need it.

[Anonymous]

Anonymous wrote:How old are you? I made more than that when I left private sector in 2004. You are severely underpaid unless you are just out of school.

32 in a few months. I had a low paying fed job for 2.5 years while I was finishing school. Was done by 25. I’m not in management, sometimes serve as Team Lead. Like someone mentioned before, my salary is on par with the private sector for similar work.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I am a CPA in a niche field and regularly get multiple messages from recruiters. I am talking to one this week and possibly another next week. I am in the 4.4% pension deduction category.

Total Comp at my current job is 124,846(approximately 109k base plus 15.5k pension). I am not including the TSP match since most jobs provide a similar match to the FED 5%.

Seeking opinions. I wouldn't leave for less than my current comp, but what is the $$ you would leave the stability of the federal government given the option?

Could you explain what the "plus 15.5k pension" means ?

If your base salary is $109,000 less 4.4%, your real base is $104,204. Is this correct ?

The stability of a federal job is worth about double your current base (as I do not understand the $15,500 pension that you added into your "total compensation".

OP here,

I agree my real base is about 104k.

The 15.5K I include in my total comp is what my job pays toward my pension. It will pay out 36,000 a year when I am 57, if my income stays the same as it is now. This is separate from the 401K/TSP match.

Thats why I include it in my total compensation. If I had that extra money, Id invest it anyways.

Thank you for responding to my question.

The issue is whether or not you are fully vested in the pension contribution. If not fully vested, then it should not be considered income yet. how long until vested and eligible to receive pension benefits ? TIA

Already vested, but I’d have to stay for 25 more years to get the 36,000. It would be approximately $9,500 a year if I left now, but I’d have to wait 30 years.

Ok. You're 32, you've been a fed for 9 or 10 years, your MRA is 57. If your salary grows at 2% per year, you would be making ~170k at 57, and your annual pension if you retired then would be around $57000+ the supplement of about $25000 which would go until 62, at which point you could (possibly) take social security if you are not otherwise working.

Now, you'll hit 25 years of service around 48, which means that if your agency ran a VERA any time after you hist 25 years of service, you could immediately peace out, secure the health insurance and pension (only around $40,000 if you leave at 48, but you'll get a supplement of ~$20000 from age 57 until 62), and find something else to do.

The problem is that you're talking about potentially reducing to a one-income household in the future. I could make a case for going private now for say a 50% raise (and commensurate 401k match and health insurance and vacation), but that will put you in a much riskier position if you become a one-income household. Especially if the CPA industry ends up being targeted by AI. It feels like you would be in a much better position if you took advantage of training and up-skilling opportunities at your agency, and regularly apply to open positions in higher grades.

OP here,

I appreciate your well thought out response! Yes, also looking for internal promotions at my agency. Just applied to one last week. Should hear back about interview soon.

I was passed up for a promotion last year before I had completed my CPA. Ive also gotten more Team Lead experience since then, so I am hopeful.

If I had secured the promotion last week, I would have canceled my interviews with the recruiters. However, I’m scheduled to speak to them Thursday and Friday of this week. The interview practice won’t hurt. Out of the two jobs, only one is in a position to probably offer me the 50%.

Wife’s not pregnant yet, so I have a about a year to get my ducks in a row.

Thanks Again

[Anonymous]

Anonymous wrote:factor in health insurance. federal health insurance is heavily subsidized and top quality. when DH left federal for private, our insurance costs between premium and deductible went up by appx 30k.

Depends on the company, ours are 10% of that

[Anonymous]

I’m 36 and have been struggling with the trade off for years. No real advice, although the longer you wait and the higher you go in the public sector, the harder it is to make the trade (better pay, closer to early retirement, know your job and have built your reputation, etc.).

[Anonymous]

how challenging would it be to potentially rejoin your current gov agency in the future? in my experience, big-4 jobs (and especially mid-tier firm jobs) for qualified candidates are a dime a dozen due due to turnover. so be careful leaving a gov job if it’s difficult to obtain, but it sounds like you have the itch to go private (and nothing wrong with that)!

[Anonymous]

Anonymous wrote:

Anonymous wrote:How old are you? I made more than that when I left private sector in 2004. You are severely underpaid unless you are just out of school.

32 in a few months. I had a low paying fed job for 2.5 years while I was finishing school. Was done by 25. I’m not in management, sometimes serve as Team Lead. Like someone mentioned before, my salary is on par with the private sector for similar work.

If you want kids, I would stick with government. Much more family friendly. The additional salary is not worth spending less time with your kids.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How old are you? I made more than that when I left private sector in 2004. You are severely underpaid unless you are just out of school.

32 in a few months. I had a low paying fed job for 2.5 years while I was finishing school. Was done by 25. I’m not in management, sometimes serve as Team Lead. Like someone mentioned before, my salary is on par with the private sector for similar work.

If you want kids, I would stick with government. Much more family friendly. The additional salary is not worth spending less time with your kids.

This is situational and generally a really bad take. I’m private sector, work from a home office and travel. We have accounting and financing people that 2-3 wfh 2-3 days in office. My wife is fed and has to go into the office into downtown dc everyday - put the door at 7, home around 6:15ish. I spend much more time with the kids, even though I travel.

Op - federal jobs may seem like a rational prudent decision, but as a cpa you can make more money (which impacts retirement savings) and have nore control over your life in the private sector. If you get a job at a cpa firm you could probably double your current salary in 5is years. And your 32 , life is an adventure and too short to slog away in the federal rat race.