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I'm a post-doc research fellow working in a government lab and my supervisor has "offfered" to renew my position through a private contracting company (McNeal), instead of the my current funding source, which is ORISE. He sees this as a bonus for me, as the salary is a bit higher (~$1,500/year), even though it ends up costing the lab more.

Here's the rub though. With ORISE, I get an insurance stipend on top of my base salary, which covers the optional insurance plan they offer, which is tight. Low-deductible, low co-pays, dentalt, vision, etc. McNeal would deduct insurance premiums from my base salary (pre-tax), so my take-home actually ends up lower than with ORISE, and their insurance plans are all sub-par compared to the ORISE insurance (for the same premium, I get a plan with 2x my current deductible, 2x the OPM, less dental coverage for an extra premium, etc.).

Only real plus I see to the contract position is that I can start my first tax-incentive retirement savings (at the ripe age of 33) with a non-matched (but mandatory) 401K, and start making IRA contributions, which are not allowed with ORISE funding, as it's considered un-earned income. I can also opt into short and long-term disability insurance for pretty cheap, incase I get injured off the job.

My question is, does it seem worth taking an effectively lower salary and down-graded health insurance for the added benefit of tax-incentivized retirement savings? Or do you think I should talk to my supervisor about going back to the ORISE fellow status? The contract has already been awarded, so this question might be moot. I'm not sure.

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  • Unmatched 401k contributions are going to be save a few hundred a year at most in taxes for a postdoc salary. The IRA might make it worthwhile if you max it out, but overall this sounds like a pretty bad deal. – user120011 Apr 28 '20 at 16:20

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