Sounds like this is a choice between being an employee of the new company or an independent contractor. Usually this is actually not a choice, as there are IRS requirements both ways. An independent contractor has more freedom to select one's own hours. If he is an employee, the employer actually pays half of that social security tax, whereas an independent contractor has to pay it all for themself. The 401K isn't that big a deal as the independent contractor is entitled to put money into a SEP IRA or other retirement plan that is likely more than the amount allowed in the 401k, and the SEP IRA contribution is also tax-deferred. The health insurance issue would swing me toward the employee option, option #1. This is expensive and it gets more expensive as you get older and inflation continues to rear its ugly head. In fact, that is a major factor that caused me to become an employee after some years as an independent contractor. Best wishes, Chris
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