FINANCIAL

Negotiate Your Starting Salary – Doing It Right Can Add $750,000 More During Your Career

By Carla Fried
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WWR Article Summary (tl;dr) Not sure exactly how to handle that upcoming negotiation? Carla Fried has some terrific, practical tips to help you obtain the salary you want.

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Adulting can be one long financial trial by fire. Staying on track with student loan repayment, navigating the dos and don’ts of building the almighty credit score, somehow finding the cash flow to start saving for retirement, all while making rent.

Add one more item and all the others get easier: negotiating your salary. The more you make right out of the box, the higher the foundation from which raises will be added. When it comes time for your next job, you’ll have a higher salary to negotiate from.

If there’s a company matching contribution to the retirement plan, a higher salary nets you a higher match.

An analysis by ZipRecruiter based on data from more than 50,000 job-seekers estimated that negotiating an initial salary offer up from $40,000 to $45,000 could, over a long career, add $750,000 to total pay. ZipRecruiter math used an aggressive 5% annual pay increase, a bit more than the norm.

Linda Babcock, an economics professor at Carnegie Mellon and expert on the cost of non-negotiation, used a more moderate 3% annual salary increase in this explanation. Still, a starting offer of $40,000 bumped up to $44,000 translates into having more than an additional $620,000 over your career. Negotiating an early $70,000 salary up to $77,000 could, over a career, land you with nearly $840,000 more.

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