We renew our contracts in May. It may be a little early for me to be thinking about salary negotiations right now but I had an idea recently that's got me all excited.
I have mentioned before that I love my job. I also happen to love the people I work with and for. I believe strongly in this organization and I want them to succeed. I know a little about their financial situation and am well aware that they can barely afford the salaries they pay us. On the other hand, I am also at the point in the mental game of money that I am no longer willing to settle for a pittance for my efforts.
What I want is a win-win situation. I don't want to overburden the budget of this organization, and I want satisfactory compensation.
I have a pretty good personal budget that is easy for me to follow. After I pay off my debts this year I am going to have a lot more money on my hands each month that I can save. I was trying to figure out a way to put that money into a retirement account for some tax benefits and I thought of my 403b. (A 403b is similar to a 401k but is for certain non-profit organizations. Any funds deposited are tax deferred, i.e. I won't have to pay taxes on the deposits or the gains until I begin to withdraw at retirement).
Unfortunately I am already making the maximum employee elective contribution of $15,500 so I can't put any more money in. However, my employer is allowed to add money into the 403b beyond my contribution max. Currently my employer does not offer a company match to our 403b accounts.
If I can negotiate a lower salary amount but request a company match, I can keep my overall compensation exactly the same but still come out ahead because I won't be paying a chunk of that money in taxes.
Here's the part that really sweetens the deal though- this package can save my employer money as well. They will not have to pay FICA taxes on the amount they contribute to my 403b.
I can go one of two ways with this- I can help my employer out by keeping my total package the same but benefiting from the tax savings, or I can ask for a higher total package that keeps my employer's outlay the same but gives me even more benefits. Either way, I come out ahead without adding any extra burden on my employer.
I will have to check with our 403b administrator to see if coming up with this individualized package for me is going to have any negative ramifications on the whole system. But apart from that, I love this idea!
Can you spot any possible pitfalls or glitches in my reasoning? I would love to hear your thoughts... please comment!