FI Considerations for a New Job

So you get a new job. You are (hopefully) offered more money.

Once you receive an offer what should you do first with FI as a consideration?

Consider asking yourself the following questions.

401k options

Does your new employer offer a 401k? If so,  do they match your contributions? How much? So much can be said about 401ks but one thing almost all personal finance experts agree on is that you should contribute at least enough to get the company match. Any match from the company is a 100% return on your investment. 

There is also an argument that you should max out your 401k. “Maxing out” means contributing the maximum allowable amount to your account for a given year. Per the IRS, the contribution limit for 2017 is $18,000. By maxing out your 401k, you lower your tax burden for the year because contributions to a traditional 401k are pre-tax.

Health Savings Account 

Does your employer offer high-deductible health plans as one of its health insurance options? If so, you may be eligible to open a health savings account (HSA). I could go into all of the benefits here but the Mad Fientist does a much better job on his site here. One of the key points to keep in mind is how much you plan to actually use your health insurance benefits. If you or someone on your insurance have a lot of medical costs, it may make more sense to go with a health insurance plan that does not have high deductibles even though you will not be able to contribute to an HSA.

It’s also a good idea to check if your employer either matches your contributions to an HSA or will contribute a set amount to your HSA once a year. My current employer matches HSA contributions up to $750 and my spouse’s employer contributes $500 to his account irrespective of his own contributions!

Much more can be said about workplace benefits and FI but I hope the biggest takeaway you have from this article is that as a new employee, you should always review your benefits package carefully to ensure you take advantage of all employer-provided benefits that will enhance you and your family’s wellbeing, financial or otherwise.

Another FI Blogger

I have been into FI bloggers for a while now and decided to more formally join the community. 

Years ago I used to read Jacob at Early Retirement Extreme. Now I’m very much into Mr. and Mrs. ONL at Our Next Life and the Choose FI podcast. My spouse is slightly obsessed with Gwen at Fiery Millenials. He talks about her as if he knows her personally. E.g., “Have you seen Gwen’s latest net worth report!”

I’m not completely sold on the concept of early retirement but I do believe in buying your future self more options.  Even if my spouse and I retire at what is considered a normal retirement age, it can’t hurt to set ourselves up for a more financially abundant future. The worst that could happen is that in the end we have a fat* regular retirement instead of a comfortable early retirement.

I do not see any downsides to being more financially prepared. I know that some in the FI community worry about being overly frugal and sacrificing too much today for a tomorrow that is not promised. I am not worried about that for myself since I am just not a naturally frugal person. Thankfully, I am also not naturally flashy so it (mostly) balances out. I have a long way to go before anyone can accuse me of being too frugal.

Anyway, I plan to write about a lot of different personal finance topics on this blog. Some of it may have a more Black perspective since that viewpoint seems to be lacking in the FI world. 

I look forward to sharing my thoughts and continuing to learn from everyone in the FI community.

Stay tuned!

*based on the concept of Fat FI by fi180.