‘The private sector offers $110k, but the federal position offers a pension’: I have $5k in retirement and $30k in student loans. How should I choose?

Hi Money Minder,

So here’s the deal – I’m in my early 30s, and after working my butt off to put myself through school in my 20s, I’ve only got $5k saved for retirement and a hefty $30k in student loans. But now that I finally finished my degree, I’m getting job offers left and right. One is a private sector gig paying $110k (which honestly blows my mind), and the other is a federal job for $74k with a pension. Both are in pricey areas.

The work I’d be doing for either one is equally interesting. The private sector job offers tuition reimbursement, which is super tempting because I’ve always wanted to get my masters but was scared off by the cost. Plus, making six figures is a dream come true. But then there’s the federal job with its security and stability. I know I’ll still have to save like crazy for retirement, but my biggest fear is not having enough saved up and being too old or sick to keep working. The idea of that pension is pretty appealing too.

I’m not exactly a financial wiz, so any advice or insights you have would be a huge help!

Farewell from Seeking Wisdom

Response from THE MONEY MINDER:

Hello There,

Congratulations on completing your degree and receiving job offers in both the private sector and federal government! It’s clear that you have put in a lot of hard work to reach this point, and you should be proud of your accomplishments.

Given your financial situation and concerns about retirement, it’s important to weigh the pros and cons of each job offer carefully. The private sector position offers a higher salary and tuition reimbursement for further education, which could potentially open up more opportunities for career growth and earning potential. On the other hand, the federal position provides security and stability with a pension that may alleviate your worries about retirement.

In terms of financial literacy, it’s great that you are seeking help and perspective to make an informed decision. I would recommend considering a few practical steps before making your choice. First, calculate your monthly expenses and create a budget to see how each salary offer aligns with your financial goals. Second, prioritize paying off your student loans while also setting aside a portion of your income for retirement savings. Lastly, explore the potential for career advancement and earning potential in each position to see which aligns best with your long-term financial objectives.

Ultimately, the decision between the private sector and federal position will depend on your personal values, career goals, and financial priorities. Take the time to evaluate both offers thoroughly, seek advice from trusted mentors or financial advisors, and consider how each opportunity aligns with your overall financial plan and future aspirations.

Best of luck with your decision-making process, and remember that it’s essential to prioritize your financial well-being for long-term security and peace of mind.

Farewell from THE MONEY MINDER.