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It sounds like you are using a CoL in ratios, not in terms of real dollar adjustments (salary minus costs). If you buy things online, or save to move to another

It sounds like you are using a CoL in ratios, not in terms of real dollar adjustments (salary minus costs). If you buy things online, or save to move to another area, cost of living adjustments as a ratio don’t make as much sense. Unless the area is extremely cheap, you have lots more costs than me for things like childcare and housing, and you were paid above the GS payscale, that is. Back of the envelope calculations for me seem to show you can comfortably save over 200k, or more than an entire GS salary at 500k in the Bay Area a year in real dollar terms. I don’t know how to weight for pension value or stability but that’s a lot. That being said, it’s hard to put a number on an area and commute you like.

bumby 6y ago
The numbers I used were direct costs across a number of categories. Much of the discrepancy is housing costs. Others like transportation and healthcare factor in, but are not nearly as big. Pension is a bit more difficult to compare because defined benefit pensions are hard to compare to direct stock or 401k due to volatility of the latter, but a rough rule of thumb is they are worth roughly 8%-10% of equivalent annual salary. They also depend widely on when you join the govt.
- mattnewton 6y ago
  But your total projected CoL was really over 300k in the Bay Area though? You can spend 120k on a mortgage, 80k on taxes, 20k on food, 10k on commuting, 30k on miscellaneous additional costs and 40k on childcare and still have 200k left over on a 500k salary.
  - bumby 6y ago
    It’s nearly $100k more a year just for a median home mortgage, so I don’t think it was ludicrous. Local and state income taxes are essentially triple as well. I don’t think $80k will cover property, Federal, State, and local taxes at that level. Those taxes exacerbate the pre-tax income necessary to cover that median mortgage. Again, I’m sure I could get by just fine on under $300k in SV. But it’s still not comparable in terms of being as comfortable. For example, if I really wanted to pay off that median home in five years it’s possible elsewhere; I don’t think that’s a reasonable option in SV.

bumby 6y ago

The numbers I used were direct costs across a number of categories. Much of the discrepancy is housing costs. Others like transportation and healthcare factor in, but are not nearly as big. Pension is a bit more difficult to compare because defined benefit pensions are hard to compare to direct stock or 401k due to volatility of the latter, but a rough rule of thumb is they are worth roughly 8%-10% of equivalent annual salary. They also depend widely on when you join the govt.

mattnewton 6y ago
But your total projected CoL was really over 300k in the Bay Area though? You can spend 120k on a mortgage, 80k on taxes, 20k on food, 10k on commuting, 30k on miscellaneous additional costs and 40k on childcare and still have 200k left over on a 500k salary.
- bumby 6y ago
  It’s nearly $100k more a year just for a median home mortgage, so I don’t think it was ludicrous. Local and state income taxes are essentially triple as well. I don’t think $80k will cover property, Federal, State, and local taxes at that level. Those taxes exacerbate the pre-tax income necessary to cover that median mortgage. Again, I’m sure I could get by just fine on under $300k in SV. But it’s still not comparable in terms of being as comfortable. For example, if I really wanted to pay off that median home in five years it’s possible elsewhere; I don’t think that’s a reasonable option in SV.