When you work for a company, you hope to have a career rather than a job. Most people find a position that is within their comfort zone and stay there for years. They enjoy the work and the co-workers for the most part and time passes faster than any of us want to admit. When should you look beyond your comfort zone and start thinking about a career and retirement rather than a job? For each person, that answer is very different. Many will never leave the position they enjoy for the new challenges there are in world. By the time some consider it, it may be too late to secure their retirement for their golden years.
Consider a Career with a Retirement Plan
Amy has worked for the same company since she was 20 years old. Now, at 35 years of age, she has 15 years with the company and is the office manager supervising two other employees. Amy is dedicated to her job and plans to continue with the company. The company does not offer its employees insurance or any retirement plan. The owner of the company has promised to make it up to the loyal employees as soon as they feel they can afford to. However, neither the company nor Amy sees the bigger picture when it comes to retirement plans. The owner of the company plans to initiate the retirement plan by placing a lump sum into each employee’s retirement account based on the years of service. The figure is approximately $1,000 for every year the employee has worked. While this has the appearance of being very generous, the $15,000 in Amy’s case would have multiplied several times over through additional interest during the past 15 years. Amy’s retirement account should be worth over $50,000 or perhaps more. This amount cannot be made up by the company without the company going bankrupt and the sad thing is neither Amy nor the company realizes this.
Consider a Career with Health Insurance
The company’s lack of insurance has also hurt a number of employees who become sick and have to pay for health care out of their own pocket. Amy is single and has had two children without health insurance. Fortunately, after the children are born, her partner’s insurance does cover the children. Amy, however, remains without health insurance. A catastrophic illness would bankrupt Amy and her family. If the company she works for never sets up the retirement plan, all Amy has to look forward to is a Social Security check that would equal about 40% of her current income and that is if Social Security is still solvent in 30 years.
Contract Labor versus Traditional Employment
Christine recently obtained her first job working for a law firm. Within four months, Christine has had a wonderful promotion as well as a pay raise. The problem with Christine’s job is that the company considers its employees as contract labor and will issue them a 1099 at the end of the year. Christine will have to pay the full 12.4 percent Social Security tax and the 2.9 percent of her income for Medicare tax. Many companies that hire employees as contract labor are legitimate in their classification as contract labor. Christine’s company is actually walking a thin line between legal and illegal classification of contract employee. Christine must report to the office for a set number of hours. She cannot work at home. Breaks and lunches are scheduled as a daily routine. Contract labor does not work under these guidelines. The company is doing it to save the company’s half of the Social Security and Medicare tax as well as to avoid paying workman’s comp insurance and unemployment insurance. Christine is not covered by a retirement plan or health insurance. While the pay is excellent for a 23 year old single woman, it cannot be relied upon as a career for long term employment.
Should You Switch from a Job to a Career?
Chris had been working with a company for 15 years. Her husband was facing a debilitating illness that might require open heart surgery. Though she enjoyed her work, the lack of health insurance and retirement plan had her considering her future. She was able to obtain a position with the local school district. It provided her and her family with health insurance and a retirement plan. Her hourly pay scale dropped slightly, but the benefits outweighed the income. She finds the work more than satisfying and has discovered she truly enjoys working with kids through the school system.
Every situation is different as are each employee within a company. Individuals need to look to the future when considering long-term employment and career moves. Look at the availability of retirement plans and insurance. Look at the stability of the company and consider what you are sacrificing to stay within your comfort zone of your job. If at all possible, obtain your new career position before leaving your current job.
Read more from Shayl Stockstill:
Considering an Early Retirement Offer?
Stuck in a Rut? Maybe You Should Get a Life Coach