While job switchers on average experience a ten percent increase in pay when changing employers, they’re also likely to see a drop in retirement savings rates, according to a new study from Vanguard.
By the numbers: Most job switchers (64 percent) experienced a boost to their income, but just 44 percent increased or maintained their saving rate from their prior job. Most people (55 percent) decreased their saving rate in their new job, according to Vanguard.
Why it matters: A typical worker may have a total of nine jobs over their entire career. The median tenure of workers in the U.S. is about five years, and it is even lower for younger workers, women, and Black or Hispanic workers.
The bottom line: Income-wise, workers who earn $60,000 at the beginning of their career, who then switch jobs eight times across employers, could be losing out on a potential retirement savings of $300,000. This is enough to fund an estimated six additional years of spending in retirement, Vanguard reports.
