5 ms·

Career growth and networking opportunities is unprecedented there. Plus, if the salaries are higher in proportion to the costs of living, then your 10% (or what

Career growth and networking opportunities is unprecedented there. Plus, if the salaries are higher in proportion to the costs of living, then your 10% (or whatever) savings you put aside will be much bigger. I crunched the numbers before we moved to SF and even paying 10x more rent for 3x more salary worked out ok.

soared 8y ago
People tend to forget that if you contribute 10% of your salary to a retirement account, that 10% in CA is massively bigger than the same 10% anywhere else. Even if you technically lose on cost of living, you can win with proper savings strategies.
- madengr 8y ago
  “if” is the issue. Most people won’t contribute 10%, and that too has a tax ceiling. I contribute 15%, and I still hit the 18k limit, moving into after tax. Make too much to contribute to a Roth also. I’m in a flyover state, and tech salaries in SF are going to be even more limited. I just save it as cash for my kids college.
  - thatfrenchguy 8y ago
    Working in tech, if you don't max out your 401k, what are you doing ?
    - madengr 8y ago
      Agreed. Just iterating that 10% easily hits the limit of traditional retirement savings, and one has to use different avenues to have equivalent retirement income of a tech salary.
  - TomVDB 8y ago
    There is nothing that prevents you from putting after-tax money in a regular Vanguard fund? The tax advantages option are just gravy.
- scarface74 8y ago
  That’s true mathematically. But, after we get finished paying for our son’s college, out of free cash flow, we will easily be able to save 20% of my income and enjoy our five bedroom, 3-1/2 bath, 3000 square foot home in the burbs for which we pay around $2100 a month... Did I mention, that we should also be able to save most of my wife’s income or just fritter it away on vacations? I’m no special snowflake any senior developer who lives in my metro area could easily do the same thing.
- elif 8y ago
  I don't think 10% flat rate is a safe assumption... I've been working in a different market for about 10 years. I have owned my house outright for the last four, leaving me with about 5 years of salary in savings + retirement, so i guess that'd be about 50% per year overall, not 10%. Everyone I know in SF is still renting.
- goobynight 8y ago
  Win with proper savings strategies? This all assumes that you can't get the same pay (or at least close enough) elsewhere, which is an OK rule of thumb, but not true in all cases. How about trying those saving strategies outside of the bay while still on a very good tech salary? My current apartment would also be incomprehensible in the Bay Area. Luxury 1 bd, new construction, walking distance to the office, pool, Friday night car service, 24/7 concierge, pet friendly, on-site maintenance, and more for under $2k. They also threw in a free month of rent, no deposit... I'm stashing away plenty in savings too. Big tech has expanded beyond the Bay and will continue to do so. They've realized they can pay the same or a bit less and the employees can keep more. They also get to attract people that don't want to live in SF, the Bay, or CA in general. Not to mention state tax incentives that states are handing out. They're literally offering for people to move out of our non-Bay office with the same package. Those staying are paying a die-hard Californian tax and it is an expensive one.

soared 8y ago

People tend to forget that if you contribute 10% of your salary to a retirement account, that 10% in CA is massively bigger than the same 10% anywhere else. Even if you technically lose on cost of living, you can win with proper savings strategies.

madengr 8y ago
“if” is the issue. Most people won’t contribute 10%, and that too has a tax ceiling. I contribute 15%, and I still hit the 18k limit, moving into after tax. Make too much to contribute to a Roth also. I’m in a flyover state, and tech salaries in SF are going to be even more limited. I just save it as cash for my kids college.
- thatfrenchguy 8y ago
  Working in tech, if you don't max out your 401k, what are you doing ?
  - madengr 8y ago
    Agreed. Just iterating that 10% easily hits the limit of traditional retirement savings, and one has to use different avenues to have equivalent retirement income of a tech salary.
- TomVDB 8y ago
  There is nothing that prevents you from putting after-tax money in a regular Vanguard fund? The tax advantages option are just gravy.
scarface74 8y ago
That’s true mathematically. But, after we get finished paying for our son’s college, out of free cash flow, we will easily be able to save 20% of my income and enjoy our five bedroom, 3-1/2 bath, 3000 square foot home in the burbs for which we pay around $2100 a month... Did I mention, that we should also be able to save most of my wife’s income or just fritter it away on vacations? I’m no special snowflake any senior developer who lives in my metro area could easily do the same thing.
elif 8y ago
I don't think 10% flat rate is a safe assumption... I've been working in a different market for about 10 years. I have owned my house outright for the last four, leaving me with about 5 years of salary in savings + retirement, so i guess that'd be about 50% per year overall, not 10%. Everyone I know in SF is still renting.
goobynight 8y ago
Win with proper savings strategies? This all assumes that you can't get the same pay (or at least close enough) elsewhere, which is an OK rule of thumb, but not true in all cases. How about trying those saving strategies outside of the bay while still on a very good tech salary? My current apartment would also be incomprehensible in the Bay Area. Luxury 1 bd, new construction, walking distance to the office, pool, Friday night car service, 24/7 concierge, pet friendly, on-site maintenance, and more for under $2k. They also threw in a free month of rent, no deposit... I'm stashing away plenty in savings too. Big tech has expanded beyond the Bay and will continue to do so. They've realized they can pay the same or a bit less and the employees can keep more. They also get to attract people that don't want to live in SF, the Bay, or CA in general. Not to mention state tax incentives that states are handing out. They're literally offering for people to move out of our non-Bay office with the same package. Those staying are paying a die-hard Californian tax and it is an expensive one.