Evaluating Job Offers: A Journey in Comparisons By Tony Love UTPB Career Center

When analyzing a job offer, the final decision should be driven by personal factors that are important to you We cannot put a price on things like: Living close to a parent who depends upon on you for medical care

Living in a Safe City

Living in an Area with Good Schools for our Children

Living in an area free of pollution and toxins

Living in an area with a mild year-round climate

What economical factors should we look for when evaluating job offers? Believe it or not, the state you live in has huge implications upon how much of your paycheck that you actually get home with.

So how does Texas rate? Texas ranks 23rd overall (one being best) on the cost of living index Texas ranks 29/51 by total state and local tax burden for households* Texas overall tax burden was $6022 per year for a typical typical household (using national mean income of $53,889 for family of 4). In terms of property taxes, Texas ranked 47th out of 51 (including District of Colombia) in property taxes, with $3392 annually with a home with an average cost of $175,700. In terms of sales taxes, Texas ranked 38th out of 51 with an average burden of $2629. **Wallethub 2016 study. To see data for ALL states: https://wallethub.com/edu/best-worst-states-to-be-a-taxpayer/2416/ *Based upon state income tax, real estate taxes, vehicle property tax & sales tax.

Employee Benefits Bonus pay Meal discounts Medical, Dental, Vision insurance Opportunity for growth Relocation expenses Deferred tax contribution options Paid vacation Employer matching Tuition reimbursement Pension plans

Retirement Plans-Tax Deferred Contribution Plans ROTH-IRA (Can be opened separately from an employer) Income Limits: Single tax filers can contribute as long as their AGI doesn’t exceed $132,000. Married couples filing jointly can contribute as long as their AGI doesn’t exceed $194,000. Contribution Limits: $5500 annually; $6500 if age 50 or older Tax treatment: No tax break for contributions, tax free earnings and withdrawals in retirement. Withdrawal rules: Contributions (not earnings on those contributions) can be withdrawn at any time, tax free and penalty free. After five years (of your first contribution) and age 59 ½, all withdrawals are tax free too. No mandatory withdrawals or RMD like traditional IRA’S. Investment options: Stocks, bonds, CD’s, money market funds, mutual funds

Retirement Plans-Tax Deferred Contribution Plans continued…… Traditional (Deductible IRA-Can be opened separately from an employer): Income Limits: Depends upon age and income (can’t contribute more than you earn, must be under age 70 ½) Contribution Limits: For 2017, the contribution limits are $5500 annually and $6500 if you are age 50 or over. Tax treatment: Contributions are made with pre-tax dollars and reduce your AGI by the amount of your contribution. Earnings grow tax free until distribution. Distributions: Must begin no later than age 70 ½, unless still working. All distributions are taxable. 10% federal penalty on withdrawals before age 59 ½.

Traditional IRA vs Roth IRA

Retirement Plans-Tax Deferred Contribution Plans 401K Plans When employers want to give employees a way to save for retirement, they may offer participation in a 401(k). Contributions: Where IRA contributions are set by the employer,401(K) contributions are set by the employer (up to $18,000 with those 50 and older allowed to contribute an additional $6000). Tax treatment: 401(k) contributions are taken from an employee’s paycheck on a pre-tax basis, meaning that payroll taxes aren’t paid on them reducing taxable income for the year. Matching: Some employers offer matching of 401K contributions up to a certain amount (ex: 3%). These are dollar for dollar matches for which the employee becomes entitled to at some point in time. Vesting: This is the time period in which an employee is entitled to the company’s matching percentage. For example, some company’s offer immediate vesting, where an employee is immediately entitled to the employer’s contribution, while other’s have a vesting schedule created where you do not become eligible for the company match until some time in the future.

Health Insurance Deductible: A specific dollar amount that your health insurance company may require that you pay out of pocket each year before you plan begins to make payments on claims. Co-payment: A specific charge that your insurance plan may require that you pay for a specific medical service or supply. For example, your insurance plan may require a $15 co-payment for an office visit or brand-name drug, after which point, the insurance company pays the remainder of the charges. PPO: Preferred Provider Organization. Like the name implies, you’ll need to get your medical care from doctors or hospitals on the insurance company’s list of preferred providers if you want your claims paid at the highest level.

Closing Thoughts Before accepting any job offer, put the pencil to the package and make sure it’s the most advantageous situation for you. Sometimes, the best salary does not equate to the best job package.