Advice on Salary Negotiations and Benefits, Part II

Advice on Salary Negotiations and Benefits, Part II

In my last post I had mentioned that I had the privilege of being part of a wonderful panel of colleagues where we were giving advice on a variety of subjects concerning the job market. I can only hope the advice that was presented at that panel will somehow be memorialized in a larger document for undergraduates and graduate students.

My part on the panel was to give some advice on the dreaded subject of money and last time I discussed some tips for initial negotiations when receiving a job offer. I want to turn my attention in this post to the second part of that discussion: benefits, specifically insurance and retirement.  The following items are just some things I have learned over the years:

  • It is important that before you accept any offer you look into your university’s retirement programs. What kind of retirement benefits do they have? Pension? 401(k)? 403(b)? What kind of financial match of your salary they have? Understand who the retirement provider is (e.g. TIAA-CREF, Fidelity, etc). Do you have a choice? What kind of financial products do they offer?
  • It is also important to look at the kind of health insurance coverage they have. Most human resource departments will list the specific insurers and you can get an understanding of the specific premiums you will have to pay. This gives you more knowledge in negotiating salary. You should be able to find all of this information from their website.
  • If you do accept their offer, when you become an official member of the university look into using special offers the university or college may provide for life insurance. Typically, you can receive discounts from your college or university in terms of life insurance. You should try to get anywhere from 8 to 10 times your salary for life insurance. Depending on your age, health, and how much coverage you would like monthly life insurance costs are typically only $20-$40.
  • When you do accept an offer, no matter what kind of faculty position, ALWAYS, ALWAYS, sign up for the retirement plan IMMEDIATELY! DO NOT WAIT! It should be some of the first paperwork that you sign up for.
  • In that retirement plan invest as much as you CAN. If you can max out your 401(a) or 403(b) that would be great but at least, the very least, contribute do it up to the match. Typically, employers will offer a retirement percentage match depending on the retirement plan (e.g. you put in 5% and they put in 5%). Always, ALWAYS do at least up to the match. If not you are giving up FREE MONEY! Don’t give that up!
  • Once you have started contributing to your retirement plans pick one of two financial products to invest in and let it grow. Don’t fiddle with it too much. You can choose more products as you get more money, but typically you should just check it every so often so that you are investing in what you are comfortable with.
  • Educate yourself! It is amazing to me how many people in academia with Ph.D.’s have NO clue what a mutual fund, an annuity product, or the type of financial provider. It doesn’t take a lot to find this information. There are some excellent websites out there! DON’T WAIT! This is WAY too important. We do RESEARCH for a living. If you can understand Foucault you can understand the wonderful world of modern finance.

I am sure there are more tips and if you have some I would certainly add it to these posts!

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