Considering leaving the University? Top 10 Reasons You Should Reconsider

June 04, 2019

ARCHIVED BLOG, PLEASE NOTE:  The information below was posted prior to any affiliation with LPL Financial and is posted here for historical purposes only

If you are reading this blog because you have considered leaving the University of Michigan at one point or another, you are not alone! Working with University faculty and staff every day, I am often presented with the question of whether to consider an outside job opportunity.

Let’s just say as an example that you are earning $80,000/year at the University and are considering an offer of $100,000 with a new employer. Most of us are inclined to look at the salary offer first. Sounds like an easy decision, doesn’t it? Who wouldn’t want a $20,000 raise? What I would encourage you to consider it the true bottom line.

Here are a few key things to take into consideration before making this career-altering decision.

  1. The Golden Handcuffs

Most people working at the University of Michigan have heard of the ‘golden handcuffs’ keeping them from leaving. Have you ever wondered what that phrase references? This comes down to the infamous 2 for 1 match. At the University of Michigan, if you contribute 5% of your salary to the 403B Base retirement plan, the University will match 10% of your salary. Many other employers offer a match, but it is rarely this high. Let’s say that this other employer offers you a $1 for $1 match up to 5% meaning they put in 5% if you put in 5%. Assuming a salary of $80,000, staying at U of M could put an extra $174,653 in your retirement account over a 20-year time period investing at a Moderate Aggressive level.  

  1. Job Security

I am aware job security varies from department to department within the University. However, job security at the University of Michigan is higher than most other local employers. We often hear stories of layoffs at other large employers in Michigan, regardless of how successful the company has been. The University of Michigan is rarely in those headlines.

  1. Access to Diversified Portfolio Options

A recent study showed that the average employer-sponsored retirement plan has between 12 and 20 investment options available (Moore, 2019). The study also went on to show that the average plan is missing 5.8 investment categories. In contrast, the University of Michigan retirement plan has 62 options available within TIAA CREF and 192 options available at Fidelity. That is a total of 254 options!

  1. Multiple Retirement Plans

While most employers only have one retirement plan available, U of M has both a 403B plan AND a 457 deferred compensation plan. The benefit of the two plans is that you can contribute double the annual plan limit set by the IRS each year. You might be thinking to yourself, I’m not even maxing out my 403B Base. Why should I care? If you are looking at either job as a long-term opportunity, you might find yourself in a position down the road where you need access to another plan. Keeping that door open for yourself could be extremely beneficial over the long term.

  1. Roth Savings

All employer retirement plans allow you to contribute on a pre-tax basis. The benefit of this is that it gives you a break on your current year’s tax return. The downside is that everything you put in and everything that it earns over time will be fully taxed once you make withdrawals in retirement. The U of M plan allows you to make some contributions on an after-tax Roth basis. This is essentially the opposite of pre-tax. There is no tax break this year, but everything you save and everything it earns is completely tax-free in retirement. It might be worth asking your potential new employer if they have this option available to you as well. (If you want to learn more about the Roth options available, check out my blog post specific to this topic here).

  1. Healthcare

Health insurance plans are slightly more difficult to compare on a broad basis. Depending on your personal health situation, you can evaluate what will be covered by one company plan versus the other. The point of clarity I want to bring to you today is that the University will pay up to 80% of your medical insurance premiums in retirement! The longer you have worked there and the older you are, the closer you are to receiving the full 80% cost of coverage. This may feel like a small benefit when you are younger, but as you get older it can be the difference between choosing to retire at age 62 or needing to wait until age 65 solely for health insurance coverage.

While these are some of the highlights, it certainly isn’t the full list. You might want to keep in mind the following benefits as well:

  1. Access to a comprehensive Legal Plan including a Trust
  2. Access to up to 8 times your salary of supplemental life insurance (up to $1.5 million)
  3. Access to life insurance for your spouse AND your children
  4. Access to a Group Long Term Disability insurance policy

With all that said, I will admit that are still circumstances where the other opportunity might be a better opportunity for you. I just want to make sure you have all the facts. Here at Evangelista and Associates, we believe that educated decisions are the best decisions. Hopefully, this post provides you with the right questions to ask as you make this important decision. A decision that might just be the most important one you make in your career.



Moore, R. (2019, January 22). Study Suggests 'Optimal' Range of 401(k) Investment Categories. Retrieved April 16, 2019, from

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