I was laid off a in May of this year from a big corporation where I was making more than enough money. During my job search, I found a job locally that I’m extremely interested in but it comes with a massive pay cut of 50%. I’m so undecided on what to do because of the decrease in pay, even though I can absolutely afford it AND I don’t want to go back to big corporate America as I didn’t feel it was worth it.
I guess I’m looking for others with experience in this, just opinions, and others thoughts. Here are some further details:
– Previous job was 170K base with and annual bonus and new job is 85K with small quarterly profit sharing
-Old job didn’t provide me much satisfaction, no creative freedom and I was just a cog in a machine. New job I’d be a part of a 4 person team and my input would be considered
– New job is in a new industry (cyber security) and the company would pay for all of my certifications and are expecting the learning curve.
– I have a pension and other guaranteed income that equates roughly to 80K a year so the payout would be felt but not impactful
– I have no debt other than my mortgage and my kids are already adults and out of the house so financial obligations are literally me, my dog and my house
– My SO makes decent money as well.
– I saved a good amount of money over the years so have a decent nest egg
I’m welcoming any advice, input or personal experience stories. Thank you!
Potential new job with massive pay cut
byu/New-Acanthisitta365 inpersonalfinance
Posted by New-Acanthisitta365
11 Comments
If you want a real unbiased analysis of affordability, you need to provide more specifics:
• Age:
• Retirement Balance:
• Expected Retirement Age:
• Expected Earned Income:
• Expenses:
Otherwise, based on the info you’ve laid out, I don’t see why you wouldn’t take the job. You’re financially secure by your own analysis, sounds like you are later in your career, and found a gig that improves quality of life.
> I can absolutely afford it AND I don’t want to go back to corporate America
So take the job!
I would maybe try to change your mindset about it being a pay cut. You aren’t leaving a job for one that pays 50% less, you’re taking a job that pays $85k more than what you’re currently making after being laid off.
Have you been looking for an equivalent position to your previous and not finding one? Or taking some time off? If you haven’t had luck finding an equivalent job it makes thos job all the more appealing, but even if you’ve just been taking the time off and are ready for something different this job still sounds like it could be cool, particularly given that you can afford it, have a great pension, and (it sounds like) are excited for the opportunity.
If it makes sense financially and you’ll be happier, I would go for it. I guess the only thing I’d consider heavily is your future interest in returning to the corporate environment. The longer you’re away the harder it may be to return to that level, but if that’s something you can accept/afford as a long term risk then I don’t see a downside outside of it.
I would really make sure you’ve done the math on retirement/long term plans, and if that’s all secure (sounds like it must be but hard to say without more information) then go for the opportunity you feel excited about!
We’re living in a near future where AI will disrupt all existing career paths. Being proactive and learning new industries and skills is the best hedge to making yourself valuable. It sucks to take that haircut but if there was any time to make this transition, you seem like you have a huge safety net to take this opportunity.
Your current pay is zero, you’ve been out of work 3+ months, and finding a new position will only get more difficult the longer it goes, particularly when facing inherent age bias too.
You’re looking at it as a massive pay cut. I’d look at it as a massive raise, unless you have some reason to think a job paying close to your old one is imminent.
Well you have no job right now.
As long as you can support your lifestyle and long term goals the dollar amount doesnt matter. Work enables life, not the other way around.
Were you saving $40-$65k/year at the old job? If so, this job just means you’ll save a lot less.
Did you have the pension and other guaranteed income before? If so, were you saving more like $90-$120k?
If you had that income, and weren’t saving that much, where was that money going? Are you willing and able to cut those things?
It sounds like you weren’t saving that much, since you only have $200k in retirement. So, you were spending. Is there some reason your spending can now decrease by more than $3k/month? This may not matter if you can’t get a job paying that much anyway. But, I wouldn’t pretend it won’t be a lifestyle change unless you can track where the extra money was going before and be willing to give some of that up.
I was laid off and not working for a year. Managed to get a job with a pay cut. I hope to make it to retirement.
Lose 10 years from your resume and dye your hair like i did.
Advice? You take ANY job you are offered if you are currently not working. There is literally nothing stopping you from continuing to look while employed. If you love it, great! If not, find something else.
I was the person that took the pay cut for better experience that I then leveraged into much higher paying positions. It’s the long game but has served me well. If you’ll have better, more satisfying work to point to, it’s beneficial.
Personally I also grew up with nothing so lifestyle creep hasn’t been an issue.
$85k in cyber security is low. I’m guessing you are getting the entry level new guy pay. I’d think there would be quite a bit of upside once you get experience in the new field.
You haven’t been working since May so start with the fact that this is a job you won’t hate that pays well. Cyber security is a great industry that isn’t going anywhere, even with AI. It’s also an industry where if you’re any good at it you can be back making what you were within 5 years.
I’d say take it. I kinda assume you came from software development which is not looking good.