It’s no secret that higher education is facing unprecedented pressure from political and cultural forces. Tenure is under attack in several states, with active legislative efforts to eliminate or redefine it. Many positions that are partially or fully dependent on grant funding are facing uncertainty, including NIH proposed caps on indirect research costs or even cancelling of funding contracts. Even if funding is secure, there are pressures to change university culture and norms around promotion of diversity and freedom of expression and thought.
We’ve long helped clients evaluate career transitions, usually due to recruitment or promotion. Even if your funding is secure, growing political scrutiny around diversity, freedom of thought, and tenure systems may be changing the norms and support systems you once trusted. We’re now seeing more faculty consider a move — not for promotion or prestige — but for protection, peace of mind, or purpose.
Should I Stay or Should I Go?
The decision to stay with your current role or consider an alternative path has multiple layers to consider. This might be surprising coming from someone in financial services, but the reality is money is not everything. Research consistently shows that autonomy, purpose, and relationships are powerful contributors to well-being and long-term happiness. We wrote more on that here.
Before making a move it’s important to evaluate the total financial picture. Salary is only one part of a total compensation package. We have seen plenty of cases where a base salary looks attractive, but the total compensation package tells a different story. Below are key areas we help our clients analyze when considering a job move. Some of these are quantifiable; others require nuanced judgment.
The Intangibles
While finances matter, the “soft” variables can weigh just as heavily:
Proximity to family – Are you moving closer to support systems or further away?
Ability to build or maintain community – Does the new location reflect your values? Will you feel at home?
Institutional reputation and resources – Will you be supported in your research, teaching, or administrative role?
Sense of purpose and impact – Will this move help you do more of the work that brings meaning?
These factors are harder to quantify, but they often drive satisfaction years down the road.
Retirement Benefits
Start by considering the benefits you have now. Most university plans require you to be vested before you can draw benefits or roll them over. Leaving before you are vested may result in forfeiting benefits. Vesting periods range from 3 to 10 years, and you don’t want to lose valuable employer contributions by leaving too soon.
Be sure to ask:
Am I vested in my current plan?
What happens to my retirement accounts if I leave?
Then, consider how the new employer’s retirement plan compares to your current benefits.
Pensions
One of the trickiest points of comparison is retirement and pension benefits. We have seen many states and universities trending away from traditional pensions towards newer plans. To really compare, you must know the basics of each plan. Start with understanding the type of plan being offered. They generally fall into one of two categories:
Defined Benefit Plans are traditional pensions.
Benefits are typically based on a formula considering your average earnings and number of years of service.
Contributions are typically mandatory and made by both the employee and the employer.
Defined Contribution Plans are growing in popularity as they are more portable for a mobile workforce as well as less risky for the employer. Unlike traditional pension benefits, there is no guarantee of future benefits.
Benefits are based on a combination of contributions to the account, plus earnings or growth on the account based on how it is invested.
How that account is invested is often left to the employee to determine. This means you cannot be a passive participant. You will need to determine how you want it invested and monitor and adjust over time. How your account performs over time will determine the magnitude of benefits you receive in retirement.
Like a traditional pension, there are usually contributions made by both the employer and employee.
Comparing like plans (defined benefit to defined benefit) may be relatively straightforward, but comparing a defined contribution to defined benefit plan can get much trickier. Consider the following simplified example:
University A offers a defined benefit plan. Your benefits are calculated at full retirement age as a percentage of your average salary determined by years of service multiplied by 2%. You contribute 8% of your salary to the pension. Assuming a salary of $150,000 and 30 years of service, your pension is: $150,000 × 2% × 30 = $90,000/year for life. This is typically guaranteed for life and often with some benefits for a surviving spouse and/or adjustments for cost of living.
University B offers a defined contribution plan. You and your employer each contribute 8% of your salary to the plan. You’d need to build a portfolio capable of generating that same $90,000/year in retirement. Depending on withdrawal or annuity assumptions, that might require $1.5 to $2.25 million in your retirement accounts. This may well be realistic if you assume investment earnings of 5-7% on average, but there is no guarantee. You may want to save more in a supplemental retirement plan to ensure the safety of your retirement.
The bottom line: pensions can be incredibly valuable but comparing them requires modeling and assumptions.
Supplemental Retirement Plans
Almost all universities are going to offer a supplemental retirement plan. For most state universities, this will be through a 403(b) plan while some private universities will utilize a 401(k) plan. While plans can vary, they are generally very similar when it comes to tax benefits and access to them in retirement.
However, one major difference between state and private universities is access to a Deferred Compensation 457(b) Plan. A 457(b) plan is a type of deferred compensation retirement plan that is available to employees of state and local governments. Like a 403(b) or 401(k), the plan lets employees make tax-advantaged contributions, deducted from gross income before calculating federal and state taxes. Many state universities allow you to contribute to both plans, doubling your ability to save in tax-advantaged plans. This helps with catching up on retirement savings or deferring high income during peak earning years.
For example, suppose you are over age 50 and your Federal Tax rate is 24% and State Tax rate is 5%. The current contribution limit is $23,500, plus an additional $7,500 catch-up contribution for those over age 50, totaling $31,000 per year. If you contribute the maximum amount, you will reduce your taxable income by $31,000, effectively lowering the amount of taxes you pay. Here’s a breakdown of the tax savings:
Federal Tax Savings: $31,000 x 24% = $7,440
State Tax Savings: $31,000 x 5% = $1,550
Total Tax Savings: $7,440 (Federal) + $1,550 (State) = $8,990
Being able to contribute to both a 403(b) and 457(b) plan is a powerful advantage. It effectively doubles your tax-deferred savings potential, which can be especially meaningful in your peak earning years or if you're planning an early retirement.
Ask:
Does the new institution offer a 457(b)?
Are there state or institutional limits that differ from my current plan?
Social Security Participation
Not all universities participate in Social Security because their pension is considered a replacement to this system. This is an important factor to consider when comparing benefits of university employment. It may impact your potential future Social Security earnings, which are based on an average of your highest 35 years.
Not participating in Social Security also means you do not contribute 6.2% of your salary to Social Security, which could be a significant advantage. You may want to consider using these additional funds to boost your supplemental retirement savings through other tax-advantaged plans like a 457(b) or a 403(b). This doesn’t necessarily make one job “worse” than another, but it should be part of your overall analysis.
Health and Other Benefits
Employer-provided benefits vary widely. Don’t forget to review:
Health Insurance While Working - Compare coverage options, out-of-pocket costs, and employer contributions for both you and your dependents.
Health Insurance in Retirement - Some universities offer retiree health coverage, others don’t. Understand what’s promised now and how it compares.
Disability and Life Insurance - Long-term disability coverage is often overlooked but can be a crucial safety net. Also, check if life insurance is portable or tied to your employment.
Additionally, some universities offer tuition discounts or waivers for children or family members. This can be a significant advantage and should be factored into your overall benefits package.
Cost of Living and Housing
Housing markets can differ dramatically. A $500,000 home in the Midwest might cost $1.2M on the coasts or a major city. And with mortgage rates higher than they were just a few years ago, many homeowners are reluctant to give up their low fixed-rate loans. This “mortgage lock-in” is real and should be weighed.
Also consider state income taxes, property taxes, and access to high-quality healthcare and schools.
Planning to Stability, Even if you Stay
If you decide to stay despite the risks, it is crucial to re-evaluate several key elements of your financial and career plan to ensure you are prepared for potential income cuts or job loss.
Emergency Funds
First and foremost, revisit your emergency fund. Ideally, you should have at least six months’ worth of living expenses saved to cushion against financial instability. In uncertain times, consider increasing this safety net to cover up to a year of expenses, providing extra security should your income be impacted.
Investment Allocation
Next, examine your investment allocation. If your retirement timeline might move up due to job uncertainty, you may need to adjust your risk tolerance. A more conservative approach can protect against market volatility, ensuring that your investments are secure should you need to access them sooner.
Invest in Your Career
Finally, invest in your career. Increasing your skills and making yourself more marketable can provide greater job security. Consider taking courses, earning certifications, or seeking mentorships to enhance your expertise. Additionally, diversifying your income through consulting, speaking engagements, or writing can create multiple revenue streams, reducing reliance on a single source of income.
A Final Thought
If you’re facing uncertainty in your academic role — due to tenure threats, funding cuts, or institutional shifts — you’re not alone.
Whether you’re actively considering a move or staying put and feeling uncertain, you don’t have to figure it all out alone. We specialize in helping university faculty and administrators make confident, informed decisions — balancing your values, long-term goals, and financial realities.
Let’s connect for a no-pressure conversation. We’ll help you assess your options and clarify your path forward, whether that means staying, going, or simply gaining peace of mind.