hoops902
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Post by hoops902 on Jan 20, 2020 15:00:56 GMT -5
I think we had a thread at one point that I think really highlighted the total compensation (and something I considered before I took my current job). Companies that offer good on-site childcare that is subsidized or free. I would expect that kind of company to have a TON of employees with kids. They're offering a potentially HUGE compensation with that...big enough that their wages likely aren't competitive for someone who isn't going to take advantage of that compensation. For me, the huge benefit would have been having the children on-site when they were babies. Either way you are paying for it, either with reduced compensation or paying out of pocket. But at this stage of my life, I would have no need for free childcare and would never work for a company that didn't pay me what I'm worth with benefits that I want/need. Not necessarily, that's the beauty of it. You'd RATHER have reduced compensation in that case, because if we say a company has 1000 employees, and it costs $5000 per employee to offer the perk...if half the employees don't use the perk they're essentially subsidizing the half that do. It's costing you SOMETHING, but not the full cost. Just like having a tuition reimbursement option costs me something if I don't use it, and it's a good deal for those who do.
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Rukh O'Rorke
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Post by Rukh O'Rorke on Jan 20, 2020 15:01:50 GMT -5
...And subsequently punishing lower earners who don't use the match, because their take-home pay is reduced as if they take full advantage of it.And you say higher earners "merit" a larger match...but as has been pointed out, this is POTENTIAL money, not absolute. Ah, I've finally gotten into your viewpoint with this quote - if compensation package includes matches, then increasing maximum match MUST decrease wages by an equal amount. Ergo, lower earners get a wage cut whenever their other compensation increases, to keep the employer's costs equal. From a math equation perspective, I get it, and can appreciate the reasoning. But do all employers actually do this? When DH's employer cut the match altogether, they didn't offer a wage increase (ha, wages had been flat for years). A single employee doesn't get a higher wage than a married employee because the amount the employer towards health insurance is less. He also doesn't get his wages reduced when he marries or adds kids. (Not talking about the employee's contributions toward HI, those often do rise, but about the $ amount the employer contributes behind the scenes, single vs family plan costs). Generally any company is going to track the total compensation of each position. Your Hs employer was lowering total compensation. They did it through the match but could have just as easily cut salaries instead.
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teen persuasion
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Post by teen persuasion on Jan 20, 2020 15:02:03 GMT -5
When I was considering whether or not take accept my current position, I looked at total compensation. If there was no employer match, I would not have accepted my current level of pay. As for the insurance, I know several companies that only cover the employee. If you want to add a spouse or children you must pay 100% of the cost. I actually recommended that at my last company to control the health insurance costs. We opted not to go that route that year but they very well might in the future. I think we had a thread at one point that I think really highlighted the total compensation (and something I considered before I took my current job). Companies that offer good on-site childcare that is subsidized or free. I would expect that kind of company to have a TON of employees with kids. They're offering a potentially HUGE compensation with that...big enough that their wages likely aren't competitive for someone who isn't going to take advantage of that compensation. Specialized compensation like this shows the distortions well, I think. If you need daycare, having it on-site and free/discounted IS a huge perk, and I'd crunch the numbers but it would probably be worth a pay cut because of the avoided tax expenses on earning more plus paying full freight daycare. But for employees without young kids it's just a pay cut without perk. It's obvious each of us has different values in employer compensation. Miss Tequila wants a match, or no go. Hoops wants everything in cash, skip all the other non-taxed compensation. I want access to a good retirement plan, and if there's a match, I want it to depend on my deferral, not my wages (IOW, I want to be able to max it). A young parent may want on-site daycare. Etc. I can also look at the on-site daycare from an employer's POV, where the reason for offering that perk is it improves employee attendance by eliminating a large portion of the reason for calling out (childcare snafus). Eliminating that problem might allow the employer to get better productivity out of their employees, or eliminate the need for extra staff to cover multiple childcare callouts.
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Miss Tequila
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Post by Miss Tequila on Jan 20, 2020 15:12:23 GMT -5
I think we had a thread at one point that I think really highlighted the total compensation (and something I considered before I took my current job). Companies that offer good on-site childcare that is subsidized or free. I would expect that kind of company to have a TON of employees with kids. They're offering a potentially HUGE compensation with that...big enough that their wages likely aren't competitive for someone who isn't going to take advantage of that compensation. Specialized compensation like this shows the distortions well, I think. If you need daycare, having it on-site and free/discounted IS a huge perk, and I'd crunch the numbers but it would probably be worth a pay cut because of the avoided tax expenses on earning more plus paying full freight daycare. But for employees without young kids it's just a pay cut without perk. It's obvious each of us has different values in employer compensation. Miss Tequila wants a match, or no go. Hoops wants everything in cash, skip all the other non-taxed compensation. I want access to a good retirement plan, and if there's a match, I want it to depend on my deferral, not my wages (IOW, I want to be able to max it). A young parent may want on-site daycare. Etc. I can also look at the on-site daycare from an employer's POV, where the reason for offering that perk is it improves employee attendance by eliminating a large portion of the reason for calling out (childcare snafus). Eliminating that problem might allow the employer to get better productivity out of their employees, or eliminate the need for extra staff to cover multiple childcare callouts. Actually that not true for me. I look at the total compensation package and if that is below my market rate, then it is a no go. I was saying if they did not have an employer match they would have to make it up with compensation, or then it would be a no go. I would be fine with no employer match and having my employer hand me a check for the amount. I would use it towards additional rentals, which is where most of my retirement income will be coming from.
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teen persuasion
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Post by teen persuasion on Jan 20, 2020 15:14:04 GMT -5
Childcare is a big issue. DH's aide is dropping out of working full time, because of issues finding childcare for her daughter. His agency has a revolving door trying to hire and keep enough aides. Whenever DH's aide is out, he gets extra daily pay for the inconvenience. It's also a danger to his students, because w/o another adult in the room, he can't leave, so has to find some other staffer free to either run his errand or stay with the kids while DH takes a crisis student to intervention (or something). That's usually when tempers flare and fights break out. And, of course, every time an aide leaves permanently DH has to be in on hiring/interviewing a new aide, and then waiting thru the weeks of TCI and safety training. Rinse and repeat.
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Rukh O'Rorke
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Post by Rukh O'Rorke on Jan 20, 2020 15:15:13 GMT -5
I'm with hoops on the all-cash.
why employers get to determine your health insurance company and policy and your 401k company and funds available. Tis a mystery. Just a hold over from a bygone era. Employers also generally do the STD and LTD, and other motley benefits.
Makes it very difficult to compare offers and makes it tough when changing employers as you are going to all new companies and such.
Without companies as the middle-person, the individual markets would be much more robust - and more equally available regardless of employer or employment status.
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teen persuasion
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Post by teen persuasion on Jan 20, 2020 15:23:18 GMT -5
Question: do employers offer non-wage income as compensation at least partially because it's easier to cut that portion of total compensation than directly cutting individuals' wages?
So in Miss Tequila's example, negotiating extra wages in place of a match leaves no match to be cut in tight budgets. I'd think more employees might quit over a salary cut, vs a retirement match that admittedly some don't even get.
Maybe its better to view it as non-wage perks are added instead of increasing wages (just like bonuses vs raises.) They can always be cut later.
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Miss Tequila
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Post by Miss Tequila on Jan 20, 2020 15:23:23 GMT -5
I'm with hoops on the all-cash. why employers get to determine your health insurance company and policy and your 401k company and funds available. Tis a mystery. Just a hold over from a bygone era. Employers also generally do the STD and LTD, and other motley benefits. Makes it very difficult to compare offers and makes it tough when changing employers as you are going to all new companies and such. Without companies as the middle-person, the individual markets would be much more robust - and more equally available regardless of employer or employment status. I'm not sure I would consider an STD a benefit.... I do see what you are saying about employer's deciding all of the benefits. On the flip side, if employers didn't provide a 401k, how many employees would save anything for retirement? It is also expensive to have a 401k versus just putting money into an IRA because of the red tape that employers have to go through. My expense ratio on my IRA at Vanguard is much lower than our expense ratio for the 401kk plan.
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Miss Tequila
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Post by Miss Tequila on Jan 20, 2020 15:25:49 GMT -5
Question: do employers offer non-wage income as compensation at least partially because it's easier to cut that portion of total compensation than directly cutting individuals' wages? So in Miss Tequila's example, negotiating extra wages in place of a match leaves no match to be cut in tight budgets. I'd think more employees might quit over a salary cut, vs a retirement match that admittedly some don't even get. Maybe its better to view it as non-wage perks are added instead of increasing wages (just like bonuses vs raises.) They can always be cut later. I can't speak to everyone only what I would do. But I would look for a new job if they cut my 401k without a corresponding increase in pay. That would be a pay cut for me and I do not do pay cuts. I've quit one job without having another job lined up and I would have no problem doing it again. Of course, it helps that we are in an employee job market right now.
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Deleted
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Post by Deleted on Jan 20, 2020 15:37:51 GMT -5
Sometimes employer benefits are a bargain though. I could never get insurance as good and as cheap as I do without being in a large company that self insures for health insurance. Our 401K does have some crappy options, but the index funds are still 0.03% expense ratio. A hair more than Vanguard, but 25K/year limit plus match vs. 7K limit in the IRA with no match.
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Deleted
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Post by Deleted on Jan 20, 2020 15:54:16 GMT -5
DH contributed 5% to his 401k to get the match. After years of doing this on auto pilot, as soon as he heard the employer was dropping the match in 2008 due to the recession, his knee jerk reaction was "well, I should quit contributing now, right?" I was aghast - no, you should double your contribution to make up for the lost match! To prove we could afford to do this, I first examined what was being withheld from his paycheck and my options. <snip> Contributing to employer traditional 401ks or the like are very useful to lower income earners, especially with kids in the picture. The marginal tax rate for them is much higher than you'd think based on their bracket, because of phaseout rates on EITC on top of tax rates. EITC phaseout is 21%; my state matches federal EITC at 30%, so that's essentially another 6.3% phaseout. Add in federal tax at 10% and state tax at 4% (lowest brackets) and you've got a marginal rate of 41.3%. IOW, for a contribution of $1k annually, a low income earner could get a tax refund of an additional $431. Oh, wait, that's ignoring the retirement Saver's credit, too. So while many low income earners might THINK they need every $ they can finagle in their take home check, encouraging retirement account deferrals (thru fair employer matches) could be a win-win. DH was lucky to have you and your analytical skills. I wonder how much less you'd have now if he'd quit contributing 12 years ago. Unfortunately there are far too few people equipped to think that way.
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Rukh O'Rorke
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Post by Rukh O'Rorke on Jan 20, 2020 16:28:16 GMT -5
Question: do employers offer non-wage income as compensation at least partially because it's easier to cut that portion of total compensation than directly cutting individuals' wages? So in Miss Tequila's example, negotiating extra wages in place of a match leaves no match to be cut in tight budgets. I'd think more employees might quit over a salary cut, vs a retirement match that admittedly some don't even get. Maybe its better to view it as non-wage perks are added instead of increasing wages (just like bonuses vs raises.) They can always be cut later. perhaps in part. I also think that it is an easy way to boost the package total - and they may track metrics like, on average, the positions only cost them 0.78 of the potential benefit costs. It is also perception - we are used to getting our retirement, medical, etc. from employers. The marketplace reflects that, the way people evaluate jobs reflect that - so it's kind of baked in I think.
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hoops902
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Post by hoops902 on Jan 20, 2020 16:46:04 GMT -5
Question: do employers offer non-wage income as compensation at least partially because it's easier to cut that portion of total compensation than directly cutting individuals' wages? So in Miss Tequila's example, negotiating extra wages in place of a match leaves no match to be cut in tight budgets. I'd think more employees might quit over a salary cut, vs a retirement match that admittedly some don't even get. Maybe its better to view it as non-wage perks are added instead of increasing wages (just like bonuses vs raises.) They can always be cut later. perhaps in part. I also think that it is an easy way to boost the package total - and they may track metrics like, on average, the positions only cost them 0.78 of the potential benefit costs. It is also perception - we are used to getting our retirement, medical, etc. from employers. The marketplace reflects that, the way people evaluate jobs reflect that - so it's kind of baked in I think. It is, we talk about hypothetical/illusory benefits...the brilliance of it is that you get to count the full benefit toward everyone for "PR" purposes, knowing you'll never pay the full amount out to everyone. "Hey we have tuition reimbursement up to $5000"...that sounds good to someone who thinks "maybe someday", even if they never use it. It also helps psychologically that people still see benefits as "a free perk" rather than "part of total compensation". I know a lot of people who see a perk like "discounted legal counsel" and think "wow, someday I might need that, that's a great perk to have". I look at it and think "wow, another thing I'm not using this year that could have been part of my paycheck". People see benefits they DON'T use as still being a positive...it incentivizes lots of unnecessary benefits because the company spends very little on the actual benefit since people don't use it, but they get to proclaim it as a benefit to EVERYONE.
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teen persuasion
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Post by teen persuasion on Jan 20, 2020 17:16:24 GMT -5
DH contributed 5% to his 401k to get the match. After years of doing this on auto pilot, as soon as he heard the employer was dropping the match in 2008 due to the recession, his knee jerk reaction was "well, I should quit contributing now, right?" I was aghast - no, you should double your contribution to make up for the lost match! To prove we could afford to do this, I first examined what was being withheld from his paycheck and my options. <snip> Contributing to employer traditional 401ks or the like are very useful to lower income earners, especially with kids in the picture. The marginal tax rate for them is much higher than you'd think based on their bracket, because of phaseout rates on EITC on top of tax rates. EITC phaseout is 21%; my state matches federal EITC at 30%, so that's essentially another 6.3% phaseout. Add in federal tax at 10% and state tax at 4% (lowest brackets) and you've got a marginal rate of 41.3%. IOW, for a contribution of $1k annually, a low income earner could get a tax refund of an additional $431. Oh, wait, that's ignoring the retirement Saver's credit, too. So while many low income earners might THINK they need every $ they can finagle in their take home check, encouraging retirement account deferrals (thru fair employer matches) could be a win-win. DH was lucky to have you and your analytical skills. I wonder how much less you'd have now if he'd quit contributing 12 years ago. Unfortunately there are far too few people equipped to think that way. I started looking at retirement saving when I realized DH's attitude was "I'll never get to retire, so why bother saving for it". His adoptive mom died at age 56 from complications of her second shot of quadruple bypass surgeries. I think that influenced his ideas on getting to retirement age, even though he doesn't have her genetic health issues, or her self-induced ones (like smoking). As I was then a SAHM, my resources for retirement relied entirely on his income and access to employer retirement accounts, so you could say I was motivated to find an answer. If he'd quit contributing then, well, he had under $20k in a former employer's 401k in TDR funds, and under $20k in the current employer's 401k, in bonds IIRC. Even ignoring them rather than cashing them out, they wouldn't have grown that much to today, as I hadn't yet figured out indexing and asset allocation. Double? We've got more than 15* that now. He has progressed from joking that all of the retirement accounts were mine (not his) because he didn't expect to ever see retirement, and I was the one interested in the investing stuff, to "is this early retirement thing really possible?" to now where we're plotting when best to quit in a few years, maybe less than 2.
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teen persuasion
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Post by teen persuasion on Jan 20, 2020 17:27:59 GMT -5
I'm with hoops on the all-cash. why employers get to determine your health insurance company and policy and your 401k company and funds available. Tis a mystery. Just a hold over from a bygone era. Employers also generally do the STD and LTD, and other motley benefits. Makes it very difficult to compare offers and makes it tough when changing employers as you are going to all new companies and such. Without companies as the middle-person, the individual markets would be much more robust - and more equally available regardless of employer or employment status. It'd certainly be cleaner to go all cash and only pay for the perks you want, directly. But the way things are set up currently, taxwise, I'd be cutting off my nose to spite my face to go all cash and pay for things like health insurance and save for retirement. Putting $ aside for those things pre-tax is huge, especially when tax generated numbers like AGI influences other tax details like refundable credits or things like college financial aid eligibility. I'd lose five figures in tax credits, and more in PELL/TAP grants annually. Which is effectively everything we save to retirement, probably.
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hoops902
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Post by hoops902 on Jan 20, 2020 17:30:55 GMT -5
I'm with hoops on the all-cash. why employers get to determine your health insurance company and policy and your 401k company and funds available. Tis a mystery. Just a hold over from a bygone era. Employers also generally do the STD and LTD, and other motley benefits. Makes it very difficult to compare offers and makes it tough when changing employers as you are going to all new companies and such. Without companies as the middle-person, the individual markets would be much more robust - and more equally available regardless of employer or employment status. It'd certainly be cleaner to go all cash and only pay for the perks you want, directly. But the way things are set up currently, taxwise, I'd be cutting off my nose to spite my face to go all cash and pay for things like health insurance and save for retirement. Putting $ aside for those things pre-tax is huge, especially when tax generated numbers like AGI influences other tax details like refundable credits or things like college financial aid eligibility. I'd lose five figures in tax credits, and more in PELL/TAP grants annually. Which is effectively everything we save to retirement, probably. There's nothing saying that if they did away with the match or other benefits that there wouldn't still be a 401k there for you to put money into pre-tax. That's hardly a "perk" at most places, generally they aren't paying anything to offer that, a company WANTS to come in and offer their 401k services because they want your investment money.
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Deleted
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Post by Deleted on Jan 20, 2020 17:48:56 GMT -5
As I was then a SAHM, my resources for retirement relied entirely on his income and access to employer retirement accounts, so you could say I was motivated to find an answer. Well, I'm still impressed. I'm almost 67 and I'm starting to see the sad consequences of women my age losing their husbands after trusting that SS would be enough- and then trying to live on the Survivor Benefit, which is 2/3 of what the couple was getting if the wife was collecting on her husband's record. Two had to sell their houses. My step-Grandma had to find a second husband because she found out when her first husband died he's elected a higher payout with no Survivor benefit. Women have to look out for their own interests, no matter who's bringing in the money.
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teen persuasion
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Post by teen persuasion on Jan 20, 2020 18:04:10 GMT -5
It'd certainly be cleaner to go all cash and only pay for the perks you want, directly. But the way things are set up currently, taxwise, I'd be cutting off my nose to spite my face to go all cash and pay for things like health insurance and save for retirement. Putting $ aside for those things pre-tax is huge, especially when tax generated numbers like AGI influences other tax details like refundable credits or things like college financial aid eligibility. I'd lose five figures in tax credits, and more in PELL/TAP grants annually. Which is effectively everything we save to retirement, probably. There's nothing saying that if they did away with the match or other benefits that there wouldn't still be a 401k there for you to put money into pre-tax. That's hardly a "perk" at most places, generally they aren't paying anything to offer that, a company WANTS to come in and offer their 401k services because they want your investment money. Not everybody has access to a 401k, match or no match. The lower the pay, the less likely you are to have any benefits beyond pay. I've just gotten access to a SIMPLE IRA at work. The only reason we have it, despite repeated requests by staff, is because the board had to make a promise to get a retirement benefit when hiring the current director G. She was pretty patient, it took more than 2 years. I'm still amazed she took the position over the offer from another library (which had health insurance and access to the state pension system). The previous director jumped ship and left abruptly for another location. That left the board facing another director search (just 2 years after prior-prior director passed away) and they were desperate to hire G. But a SIMPLE IRA isn't nearly as good as a 401k. The limit is $13.5k + $3k catch up, vs $19.5k + $6.5k. There's no Roth option, and no after tax/mega backdoor Roth option. There is a match, either 2% for everyone (even if they don't contribute), or 3% for only those participating. But I couldn't convince the board to go with a low cost provider, they wanted Wells Fargo to hold their hand, so the staff pays the ridiculous fees for junky actively managed funds. Essentially our match pays the fees.
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hoops902
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Post by hoops902 on Jan 21, 2020 9:12:59 GMT -5
There's nothing saying that if they did away with the match or other benefits that there wouldn't still be a 401k there for you to put money into pre-tax. That's hardly a "perk" at most places, generally they aren't paying anything to offer that, a company WANTS to come in and offer their 401k services because they want your investment money. Not everybody has access to a 401k, match or no match. The lower the pay, the less likely you are to have any benefits beyond pay. I've just gotten access to a SIMPLE IRA at work. The only reason we have it, despite repeated requests by staff, is because the board had to make a promise to get a retirement benefit when hiring the current director G. She was pretty patient, it took more than 2 years. I'm still amazed she took the position over the offer from another library (which had health insurance and access to the state pension system). The previous director jumped ship and left abruptly for another location. That left the board facing another director search (just 2 years after prior-prior director passed away) and they were desperate to hire G. But a SIMPLE IRA isn't nearly as good as a 401k. The limit is $13.5k + $3k catch up, vs $19.5k + $6.5k. There's no Roth option, and no after tax/mega backdoor Roth option. There is a match, either 2% for everyone (even if they don't contribute), or 3% for only those participating. But I couldn't convince the board to go with a low cost provider, they wanted Wells Fargo to hold their hand, so the staff pays the ridiculous fees for junky actively managed funds. Essentially our match pays the fees. It sounded like you were saying that going all cash would hurt you because of the retirement plan piece, I was pointing out that you could go all cash without losing whatever access you happened to have to a retirement account.
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teen persuasion
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Post by teen persuasion on Jan 21, 2020 10:11:40 GMT -5
Low or high earner, if you ask me how I'd want my pay, I'd want it ALL in my paycheck. Don't match my 401k at all, don't offer me tuition reimbursement, don't offer me healthcare. Give me the MONEY. If I make bad money decisions that might not be the best thing FOR me, but it's what I want. I don't want theoretical tuition reimbursement dollars that I could get, I want real dollars that I WILL get. I had to go back to see exactly what you'd said about non-cash compensation vs all in pay. Don't match my 401k at all, don't give me tuition reimbursement, don't offer me healthcare. Give me the MONEY. Ok, you didn't say don't offer a 401k. But healthcare? That's pre-tax when done thru payroll. As it currently stands, paying for your health insurance yourself gets no tax benefit, you can't deduct it. Another asymmetry in our tax code to deal with. Now, if it weren't for the tax effects on that new increase in taxable income (remember, 41.3% marginal for low income earners), I'd agree that I'd prefer employers get out of the business of choosing and providing our health insurance. Having the majority of people going thru the ACA for coverage would strengthen it. But when the ACA was put into place, weren't there incentives to encourage more employers to provide HI? And there is definitely the rule that you are not eligible for ACA subsidies if your employer offers "affordable" HI, so no one can drop employer coverage to instead opt for ACA coverage. The more we discuss this, the more I realize it's all about the asymmetries in our tax code, and my preference to opportunistically take advantage of those asymmetries, and avoid the penalties of the disadvantageous side of the asymmetries. Removing the asymmetries would go a long way to simplifying things all around. If there weren't tax advantages to employers paying for HI and offering extra retirement accounts and matches, employers would probably drop the unnecessary complexities of offering and managing them.
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NastyWoman
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Post by NastyWoman on Jan 21, 2020 11:58:30 GMT -5
I think we had a thread at one point that I think really highlighted the total compensation (and something I considered before I took my current job). Companies that offer good on-site childcare that is subsidized or free. I would expect that kind of company to have a TON of employees with kids. They're offering a potentially HUGE compensation with that...big enough that their wages likely aren't competitive for someone who isn't going to take advantage of that compensation. Specialized compensation like this shows the distortions well, I think. If you need daycare, having it on-site and free/discounted IS a huge perk, and I'd crunch the numbers but it would probably be worth a pay cut because of the avoided tax expenses on earning more plus paying full freight daycare. But for employees without young kids it's just a pay cut without perk.I have seen that first hand this last year after our company got acquired by another one. They have been boasting about all the wonderful new perks we received, BUT what good does it do me that they now help employees pay off their student loans, or that hey offer pet insurance as part of the benefit package? Yet at the same time they lowered life insurance coverage for employees over 65 from 2x annual salary to 1.67x.
I looked it up and this is actually legal since they don't have to apply benefits uniformly to all employees. So what can I say? I am just going to refuse to die before I retire and I'll retire when I want to, so there
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Post by Deleted on Jan 21, 2020 14:21:50 GMT -5
The more we discuss this, the more I realize it's all about the asymmetries in our tax code, and my preference to opportunistically take advantage of those asymmetries, and avoid the penalties of the disadvantageous side of the asymmetries. Removing the asymmetries would go a long way to simplifying things all around. If there weren't tax advantages to employers paying for HI and offering extra retirement accounts and matches, employers would probably drop the unnecessary complexities of offering and managing them. I agree. The analysis you described earlier is a perfect example. How many people are equipped to do that? I've always been against income-related social programs and tax adjustments that had a "cliff"- if your AGI is $1 over or under that cliff you gain or lose benefits worth much more. Slightly different subject: whatever happened to "cafeteria benefits"? I remember a time when some employers (not mine) allowed you to make trade-offs- free passes for public transportation to work in exchange for a higher-deductible health insurance plan, for example. You could choose what best fit your needs. Too complicated? Or did all the people with expensive, ongoing health issues and a lot of dependents choose the gold-plated health insurance plan in favor of anything else, this making that plan too expensive to continue?
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hoops902
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Post by hoops902 on Jan 21, 2020 14:54:05 GMT -5
The more we discuss this, the more I realize it's all about the asymmetries in our tax code, and my preference to opportunistically take advantage of those asymmetries, and avoid the penalties of the disadvantageous side of the asymmetries. Removing the asymmetries would go a long way to simplifying things all around. If there weren't tax advantages to employers paying for HI and offering extra retirement accounts and matches, employers would probably drop the unnecessary complexities of offering and managing them. I agree. The analysis you described earlier is a perfect example. How many people are equipped to do that? I've always been against income-related social programs and tax adjustments that had a "cliff"- if your AGI is $1 over or under that cliff you gain or lose benefits worth much more. Slightly different subject: whatever happened to "cafeteria benefits"? I remember a time when some employers (not mine) allowed you to make trade-offs- free passes for public transportation to work in exchange for a higher-deductible health insurance plan, for example. You could choose what best fit your needs. Too complicated? Or did all the people with expensive, ongoing health issues and a lot of dependents choose the gold-plated health insurance plan in favor of anything else, this making that plan too expensive to continue?The more trade-offs you allow people to make, the more you have to assume they will use those benefits. That means more of the total compensation in the form of benefits which means less in their take-home pay. People (in general) care a LOT about take-home pay and less about benefits...particularly as it related to starting a new job at a new company. So you end up with companies with cafeteria benefits offering significantly lower starting salaries, and they have trouble attracting new employees because the salary offer looks low.
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Deleted
Joined: Apr 25, 2024 23:02:40 GMT -5
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Post by Deleted on Jan 21, 2020 20:28:13 GMT -5
The more trade-offs you allow people to make, the more you have to assume they will use those benefits. That means more of the total compensation in the form of benefits which means less in their take-home pay. People (in general) care a LOT about take-home pay and less about benefits...particularly as it related to starting a new job at a new company. So you end up with companies with cafeteria benefits offering significantly lower starting salaries, and they have trouble attracting new employees because the salary offer looks low. Thanks- that makes sense.
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