I currently make $75K and my employer offers a 3% match on my 401K. I have now been offered an exceptional job making $120K but there is no retirement plan offered. In CA by 2022 all employers will have to offer some sort of retirement plan or they will have to offer the Calsavers retirement option if they do not want to offer a retirement plan of their own.

My question is should I negotiate for some form of a retirement plan such as a Simple IRA, 401K, or even an end of year bonus if they are not willing to do the Simple IRA or 401K? Is it even worth trying to negotiate this since they are going to be forced to provide some sort of retirement plan by next year? This is a small nonprofit with 8 employees. TIA!

  • Small note, non-profits typically have 403(b) retirement plans, not 401(k) plans. Not sure what the overhead difference is from an administrative standpoint, but for the consumer (you) the plan itself operates identically.
    – GOATNine
    Feb 2, 2021 at 15:40

6 Answers 6


Yes, the salary jump is clearly worth it. Although you will pay more taxes, the $45k salary increase is a much larger amount than the previous 401k match.

I strongly recommend that you do not try to negotiate a retirement plan. It is a big ask and it is very unlikely that the non-profit would do it for you. The non-profit doesn't have any retirement plan in place (otherwise you would be included), and an 8-person non-profit likely doesn't have the resources to investigate this right now.

From my experience, the people at small non-profits are 100% devoted to the mission of the non-profit, but tend to be bad at mundane, logistical issues such as retirement plans. It is a very different work environment from for-profit businesses.


It's incredibly worth it for a further overwhelming reason:

Your "headline salary" is what advances your salary.

A couple years from now you'll be trying to move ahead to a new salary bracket. It is incredibly better to have the position "I'm currently on 120" than "I'm currently on 75."

The difference is night and day.

Whenever one has a chance to step up a "salary bracket" (as opposed to merely "a nice raise"), you absolutely have to grab it at it with both fists and both feet.

Note as @gaefan wisely says, for goodness sake don't sour the deal by mentioning other benefits etc. Don't mention anything other than "Can I start this afternoon."

Best of luck!


Here are some factors to account for:

  • Negotiating with the new employer for a "real" retirement plan is unlikely to succeed since such a small organization would face a large administrative overhead to offer it. This is what the California 2022 requirement is dealing with -- it can be met by an employer signing up for CalSavers, a state-administered program that funnels employee payroll contributions to an IRA. There are no employer contributions. In other words, the upcoming requirement will not give you anything, except perhaps convenience, that you couldn't already get by funding your own IRA. It is designed as a "nudge" to benefit employees who aren't retirement-savvy while imposing the minimum burden on small businesses.

  • There are of course advantages of having a 401(k) even beyond the 3% match -- i.e., the ability to make a fairly large amount of tax-advantaged savings. But, with a $45K higher salary (let's say $30K after taxes), you would now presumably be able to invest, in an ordinary taxable account, much more than the entire amount that would have been contributed to a 401(k), including employer match. If those investments have reasonable tax efficiency (capital gains being long-term and delayed as long as possible), you will come out well ahead.

  • Given the direct financial benefit as well as the long-term career benefit of taking the step to a $120K salary, the only issue would be to make sure that this nonprofit is the right job for you apart from salary. The offer suggests that you are currently undervalued. If so, there may be other even better opportunities available, either instead of the nonprofit job or as your next step soon. If not, if this $120K offer is an anomaly, then you should think about how stable the job will be. As an extreme, if the nonprofit is fragile and likely to fold soon (perhaps because it overpays its staff!), then you might find yourself unemployed and struggling to find a $75K job again. That's pretty much the worst case.

  • The final paragraph here is great !
    – Fattie
    Jan 30, 2021 at 18:13

62.5% increase in salary vs 3% decrease in 401k...

Brother, sounds like you need to start doing for yourself on that one. Congratulations.

(To clarify: if you were to hypothetically "match" your OWN contributions up to 3%, are you still net positive with the greater salary * ? Then your question answers itself! :) If it's IT/IS especially so. Rarely will one of us make LESS than the previous gig without very extenuating circumstances. Onwards and upwards my friend! Don't risk it. Accept and bask.)

  • Hint: Yes. Yes you are.

These are the questions I'd ask myself:

  1. Does my current contribution drop me into a lower tax bracket?
  2. Would any hypothetical contributions at the higher salary drop me into a lower bracket?

If the answers to either of those (especially #2) is No, then -- since 3% of $120K is "only" $3600, and you're getting a $45000 raise -- I would not push for more.

But that's me, and because non-profits are usually cash poor. OTOH, if this small nonprofit appears to be rolling in cash, go ahead and push.

  • 6
    With such a large difference, why are you even considering tax brackets? If he answered 'yes' to the question, how would your advice change? Jan 30, 2021 at 12:46
  • 1
    Agreed, 120 > (75 + 3%) = 77.25 regardless of tax bracket.
    – D Stanley
    Jan 30, 2021 at 15:23

You have good options on your own, without an employer's help: You can fund an IRA with $6,000 per year and another $6,000 for your spouse, if applicable. These contributions can be divided between traditional and Roth IRAs, according to your personal tax strategy.

If you sign up for a High Deductible Health Plan (HDHP), whether it is an ACA plan or employer plan, you can create an HSA and reap substantial tax benefits. An HSA can even be considered a retirement account.

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