Is it worth getting a job with no benefits?

“Just because a job doesn't have benefits doesn't make it a bad financial decision,” Jordan says. “If your current job is making you unhappy, or if the opportunity to fulfill what you feel is your life's purpose comes around, the benefits may not matter as much.”

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Carefully consider the implications of covering your own health insurance, retirement savings and more before accepting a job without benefits. At some point in your career, you may come across the dream job post: a challenging opportunity complete with the perfect location, room for growth and great company culture—but the employer doesn’t offer benefits.

Whether you’re currently interviewing for a job with no benefits or want to learn more before applying, ask yourself: What should I consider before accepting a job without benefits?

These insights from the experts will help you weigh your options to decide if accepting a job with no benefits is right for you both professionally and financially.

But first: Here’s why employee benefits are so important.

What is the importance of employee benefits?

To give you a sense of how much employer benefits are worth, a federal employment survey found that they make up about 30% of an employer’s total compensation cost. Broken down, only two-thirds of your paycheck is actual pay, so benefits are a major incentive to employees and a major cost for employers. So, what are job benefits? Job benefits generally include health insurance, a 401(k) or other retirement savings plan and paid time off. A company may offer other fringe benefits too—such as free meals in the office, mental health days or daycare—which can have a surprisingly large impact on whether or not you accept a job without benefits.

In certain situations—for example, if you’re looking for career opportunities during a recession—benefits may be off the table. Whether the lack of benefits is related to economic conditions or another factor, it’s important to assess your own finances before deciding: Should I take a job with no benefits?

How can accepting a job with no benefits affect me financially?

To determine the financial impact of accepting a job without benefits, it helps to have a budget that covers your current job, says Tim Jordan, certified financial coach and founder and CEO of Atypical Finance. Your budget will help you crunch the numbers to see if accepting a job without benefits is a smart move. If you’re switching from a job with benefits to one without, you may find that once you budget for the additional expenses currently covered by your benefits, a higher salary wouldn’t result in a net financial gain, Jordan says. If you accept the new job, you will be responsible for paying for your own insurance, contributing to a retirement plan and budgeting for unpaid time off. Your updated budget will make it much easier to manage those new costs. To determine how these expenses will fit into your budget, rules of thumb aren’t precise enough. You need real numbers, says Ashley Patrick, financial coach and founder of Budgets Made Easy. These are the biggest expenses you’ll need to calculate if you accept a job without benefits:

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1. You’ll pay for your own medical insurance

Health insurance coverage can vary widely depending on the plan you select. That’s why you should write down your specific health needs before getting quotes from potential insurers, Patrick says. Do you take prescription medications? Do you require specialized treatment for a condition? Your answers to these questions can influence the type of health insurance plan you choose. From plan types to coverage, you have a lot of options. You want to make sure your needs are taken care of and that you’re not paying for coverage you don’t need. For health and dental insurance, you can search your state’s marketplace to gauge the monthly premiums for your medical needs, Jordan says. “If you want to keep health, dental and vision insurance packaged together, contacting an insurance broker will be your best bet,” Jordan says. Jordan recommends gathering three to five quotes. From there, you can add your monthly premium cost into your budget, as well as estimate how your new insurance coverage will impact your current medical spending on things like medication and doctor visits.

2. It’s up to you to keep your retirement savings on track

Even if you don’t have an employer-sponsored retirement plan, you should still save for retirement with an IRA, Jordan says. “The opportunity cost of not investing is too high,” he says. “I strongly recommend investing in a Roth IRA or Traditional IRA so you can continue to grow your money. Start with the same percentage you’re investing now and add that to your list of monthly expenses.” If you were investing more than the allowable annual limit for IRAs, which the government sets at between $6,000 and $7,000 per year, Jordan recommends investing the difference into low-cost index funds that track the performance of the broader market. This money won’t reap the same tax advantages, but your retirement savings will still grow over time. If your current employer matches a percentage of your retirement savings, calculate this figure to help you better understand the financial loss, Jordan says. While this will reduce your retirement savings rate going forward, it won’t necessarily have an impact on your budget—unless you choose to replace the loss with money from your salary. The bottom line: Whether you receive benefits through work or not, make retirement saving a priority. If you need some tips to get started, here’s how to make a retirement budget.

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