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A lot of people are saying this is a bad deal because you don't get to keep your entire TC when you leave the region - you effectively end up losing more TC in

A lot of people are saying this is a bad deal because you don't get to keep your entire TC when you leave the region - you effectively end up losing more TC in the long run. True but like... you also can have way lower expenses for housing... and if you move to a state with no income tax, you might not even lose almost any net income. But - uh - I think a lot of people would be happy to keep 90% of their really high silicon valley TC if they moved to another region and they got a one-time $20K relocation bonus to top it off. I'm sure many people in SV would move if they thought they could keep 90% of their TC in another area. That said - it only stays true if they stick with Stripe. As soon as Stripe doesn't employ them - they're gonna be competing for remote-only workers wages (or whatever is local too I guess) unless they move back. I see these options as really good offers for those who really want to temporarily move somewhere else, like the company/manager/whatever they currently work for, and want to come back to the tech hub in 2-3 years (new parents? young/childless married couples? someone who misses their friends "back home"? Idk). For everyone else, I don't know why you'd move away unless you were already planning on it anyway. Your savings will be short term gained and you will lose all your friendships locally. You won't likely get to keep that $400K+ TC by sticking with permanently remote jobs or by not living in a tech hub city unless you never lose your job. (Uncommon) For people who hated living in NYC or SF Bay Area then maybe this is the winning ticket to help them kickstart their jump into another region. If Stripe IPOs - they could use that stock they earned for 2 years while working remotely to buy a house almost anywhere besides NY/SF. (Effectively meaning they don't need SF/NY income anymore because they have paid the most expensive part of housing off)

rch 6y ago
They could probably buy a house now, in the right location.
cma 6y ago
There is a good chance state income tax will become deductible again after the election and it won't be quite such a savings.
nostrademons 6y ago
> I'm sure many people in SV would move if they thought they could keep 90% of their TC in another area. I dunno about Stripe, but a lot of folks at Google (and presumably the other FAANGs in the region) have had that option for a decade or more. I've had friends I met at Google Mountain View move to Ann Arbor, Boulder, Toronto, Tel Aviv, Boston, Seattle, etc, usually to be close to family when they're having kids. You do get CoL-adjusted but 90% of SV salary is pretty typical. Only restrictions are that you have to be a solid performer beforehand, and you have to find a team that's either in that location or that's willing to have you work remotely (many teams are happy to have remote workers, particularly ones who are high performers). > If Stripe IPOs - they could use that stock they earned for 2 years while working remotely to buy a house almost anywhere besides NY/SF. (Effectively meaning they don't need SF/NY income anymore because they have paid the most expensive part of housing off) That's the case for most people who have worked for ~5-10 years at a Silicon Valley company. When 2009 hit I had a bunch of coworkers who joked about buying up whole city blocks in Detroit and plopping down a Google office and an intentional-living commune there. A lot of mid-career engineers at a FAANG could buy a house for cash in most parts of the U.S. and then have enough left over to retire, but choose not to because at that point they've put down roots in the Bay Area (and gotten addicted to the weather and culture).
- RussianCow 6y ago
  > I dunno about Stripe, but a lot of folks at Google (and presumably the other FAANGs in the region) have had that option for a decade or more. ... Only restrictions are that you have to be a solid performer beforehand, and you have to find a team that's either in that location or that's willing to have you work remotely (many teams are happy to have remote workers, particularly ones who are high performers). Anecdotally, I have never heard of anyone getting a job at a FAANG with that kind of salary working remotely from day 1. On the other hand, I have met several people who started on-site but switched to working remotely later. I'm not saying it's not possible to do the former, but it seems like it's way easier to work remotely for a FAANG if you've already proven yourself, which obviously doesn't work if you have already moved to a lower CoL area and are looking for work.
  - 6y ago
kgabbott 6y ago
> and if you move to a state with no income tax, you might not even lose almost any net income. If you relocate from NY to a no tax state, but are still basically working for the NY office, you might be taxed as a telecommuter in NY and still need to pay NY income tax. I'm not sure how this works for a multi-state company like Stripe, but I've had to do this when I transitioned to working remotely for a NY based startup.
philsnow 6y ago
> A lot of people are saying this is a bad deal because you don't get to keep your entire TC when you leave the region - you effectively end up losing more TC in the long run. True but like... you also can have way lower expenses for housing... and if you move to a state with no income tax, you might not even lose almost any net income. It's easier to think of your "total compensation" without taking into account cost of living. Lots of people (esp tech folks) don't have a personal budget and don't keep track of their costs / expenses in nearly the same level of detail that they keep track of their income. The conventional wisdom on HN (for people who aren't going to be founding companies) is that if you join bigco FAANGs and bounce around among them for 20-30 years, you'll end up with way higher expected net worth by retirement than if you play the startup lottery. Part of this is because of the power of compound interest. You can get that engine started in your early 20s and pour a lot of your "spare" money into it, especially you don't have kids yet. This same argument applies to lowering your costs. If you live in SF, you could easily be paying $40k/y in rent or $100k/y on a mortgage. If you buy in a small town with 90% of a bay area comp package, you could be plowing all your housing savings into the compound interest machine. edit: $/y instead of $/mo
- jakear 6y ago
  /yr, surely?
  - philsnow 6y ago
    ha, I misread your reply and came into this comment box all ready to say "no really mortgages can be like $100k/y there", but then actually read what I typed.
- deleted 6y ago
  [deleted]
- novok 6y ago
  Taxes are bigger, but rent is the only real major difference in costs, and your income starts outpacing whatever the rent difference is between say SF vs Seattle or Reno relatively quickly. Quantified it's about $20-50k/yr in pretax income. $20k being the single person and $50k being the person with kids who goes to public schools. Definitely a good thing to do during covid times, but you might want to move back after covid is over.
vmception 6y ago
> Your savings will be short term gained and you will lose all your friendships locally. Haha not exactly preaching to the choir here. We all are aware of what sacrifices we make and don't change course for those things. Its always "lets see what it's like over here, oh cool mountains! oh cool, beaches, oh cool new IPAs" or whatever. Try not to get completely isolated with age and figure it out!
joshxyz 6y ago
What the fuck is a TC man Edit: Total Compensation on an annualized, repeatable basis. Usually used in the context of compensation packages in the software industry with companies such as Google and Facebook. Thanks https://www.urbandictionary.com/define.php?term=tc https://www.urbandictionary.com/define.php?term=tc Motherfuck
- hartator 6y ago
  Total compensation?
- zhoujianfu 6y ago
  Total Compensation I figured out.
- tdeck 6y ago
  When people spend too much time on Blind they don't realize this term isn't something everyone knows :)
  - three_legs 6y ago
    And what is Blind?
Y-bar 6y ago
> a state with no income tax Please excuse a non-american asking a question, but doesn't this mean that no money gets paid into retirements as well? Or is that a federal tax?
- altdatathrow 6y ago
  There's a 6.2% federal tax for a government-backed pension (social security) that may or may not be around by the time people need it. Most Americans are responsible for their own retirement funding, usually via an employer sponsored plan (401k and others) Either way, it has nothing to do with a state-level income tax.
  - iso947 6y ago
    whats federal income tax on 400k? Any other Federal taxes on top of income tax and socials
    - reducesuffering 6y ago
      72-111k depending on marital status, house mortgage, and retirement savings. Typically 100k. There’s also ~15k for FICA: Social Security (small 65+ pension) and Medicare (65+ healthcare)[0] Any other federal taxes to the individual are insignificant or investment related. [0] https://smartasset.com/taxes/california-tax-calculator#pfVHM4NTGB https://smartasset.com/taxes/california-tax-calculator#pfVHM...
- philsnow 6y ago
  sibling comment answered your question, but I'll turn it around and ask, how is it elsewhere? Are retirement contributions compulsory?
  - Y-bar 6y ago
    About 18% of your income (including social security payments if you are unemployed) are compulsory and set of for your retirement, on top of that many employers may make a tax-deductible 4% payment into the employees private retirement fund.
twblalock 6y ago
Yeah housing is cheaper in other areas. But everything else costs the same. An iPhone or a Honda Civic costs the same everywhere in the US. Leaving the Bay Area will lower your housing costs, but everything else you buy will take up a larger percentage of your income than it did before. Plus you'll be making less money -- in some cases, a lot less. Run the numbers and you might find out that even after paying for a Bay Area mortgage you would have more money in retirement in California than you would in a cheaper place. Don't move for cost savings. The economic benefits are not as strong as they appear to be. Only move somewhere if it's actually where you want to live.
- apexalpha 6y ago
  Sure, but you generally don't buy a new iPhone or Honda Civic every month, while your mortgage/rent is due every month again. Furthermore, it is not only housing cost that is lower outside major cities. Your hairdresser also has higher rent in a major city, as do her suppliers. There's more traffic so goods take longer to deliver. This is besides the fact that other states/places can and often do have lower taxes on goods than major cities. So your iPhone might actually be cheaper as well. Everything is more expensive in a major city because everyone has more expenses and passes those on.
  - Der_Einzige 6y ago
    People finance their cars, and increasingly even their phones these days. You DO make monthly payments on your car (and sometimes your phone)
  - lsiebert 6y ago
    Sales taxes generally go up in states with low income taxes fwiw.
    - Zach_the_Lizard 6y ago
      A lot of the high tax states have high taxes in multiple categories. Moving to a high sales tax, low income tax state might actually "reduce* your sales tax. NYC, where I live, has an 8.875% combined sales tax. And a high income tax. Texas, meanwhile, has a maximum combined rate of 8.25% and no income taxes. High property taxes. Moving to Texas would cut the sales tax I pay.
brobdingnagians 6y ago
A lot of people are leaving California anyways, and economies in other states are booming, so jumping on that ship with good compensation, even for the short term, is a win-win for anyone who is looking to get out while the getting is good. I know someone who moved _to_ California from another state a few years ago and got the truck virtually for free because the truck company had so many more people going in the opposite direction. But then they paid very high prices for the truck when they left.
- dragonwriter 6y ago
  > A lot of people are leaving California anyways Yeah, but the out-migration is largely at the low-end of the economic scale; with net in-migration at the high end.
  - maxlamb 6y ago
    This was true in the past but this year with covid and the fires it’s likely the high end will see a big out-migration as well... https://www.theguardian.com/us-news/2020/sep/12/san-francisco-tech-workers-leaving-rent-covid-remote-work https://www.theguardian.com/us-news/2020/sep/12/san-francisc...
    - dragonwriter 6y ago
      That article neither says nor supports your “it’s likely that” conclusion (which is about San Francisco not CA as a whole, and is almost entirely speculative back and forth between different advocacy group spokespeople.)
      - bobwall 6y ago
        Ben Shapiro, Elon Musk, and Joe Rogan all are on the high end, and all have headed out. I also headed out, but I am only on the high end in terms of total world population, but they are real high enders fleeing the myriad of issues coming to a head in good ole CA in 2020.
ScottBurson 6y ago
> As soon as Stripe doesn't employ them - they're gonna be competing for remote-only workers wages (or whatever is local too I guess) unless they move back. And on top of that, they may have to accept a non-compete clause in their employment contract. All in all, they have a pretty strong incentive to remain a Stripe employee as long as possible. Stripe probably likes this.
dmode 6y ago
I think people misunderstand the SV salary situation. If you are a mid to senior level, you are pulling $400k annually, with daily pings from recruiters at Facebook, Google, Netflix, Airbnb, Instacart, Uber, Twitter etc., cost of living is the least of your concerns.

rch 6y ago

They could probably buy a house now, in the right location.

cma 6y ago

There is a good chance state income tax will become deductible again after the election and it won't be quite such a savings.

nostrademons 6y ago

> I'm sure many people in SV would move if they thought they could keep 90% of their TC in another area. I dunno about Stripe, but a lot of folks at Google (and presumably the other FAANGs in the region) have had that option for a decade or more. I've had friends I met at Google Mountain View move to Ann Arbor, Boulder, Toronto, Tel Aviv, Boston, Seattle, etc, usually to be close to family when they're having kids. You do get CoL-adjusted but 90% of SV salary is pretty typical. Only restrictions are that you have to be a solid performer beforehand, and you have to find a team that's either in that location or that's willing to have you work remotely (many teams are happy to have remote workers, particularly ones who are high performers). > If Stripe IPOs - they could use that stock they earned for 2 years while working remotely to buy a house almost anywhere besides NY/SF. (Effectively meaning they don't need SF/NY income anymore because they have paid the most expensive part of housing off) That's the case for most people who have worked for ~5-10 years at a Silicon Valley company. When 2009 hit I had a bunch of coworkers who joked about buying up whole city blocks in Detroit and plopping down a Google office and an intentional-living commune there. A lot of mid-career engineers at a FAANG could buy a house for cash in most parts of the U.S. and then have enough left over to retire, but choose not to because at that point they've put down roots in the Bay Area (and gotten addicted to the weather and culture).

RussianCow 6y ago
> I dunno about Stripe, but a lot of folks at Google (and presumably the other FAANGs in the region) have had that option for a decade or more. ... Only restrictions are that you have to be a solid performer beforehand, and you have to find a team that's either in that location or that's willing to have you work remotely (many teams are happy to have remote workers, particularly ones who are high performers). Anecdotally, I have never heard of anyone getting a job at a FAANG with that kind of salary working remotely from day 1. On the other hand, I have met several people who started on-site but switched to working remotely later. I'm not saying it's not possible to do the former, but it seems like it's way easier to work remotely for a FAANG if you've already proven yourself, which obviously doesn't work if you have already moved to a lower CoL area and are looking for work.
- 6y ago

kgabbott 6y ago

> and if you move to a state with no income tax, you might not even lose almost any net income. If you relocate from NY to a no tax state, but are still basically working for the NY office, you might be taxed as a telecommuter in NY and still need to pay NY income tax. I'm not sure how this works for a multi-state company like Stripe, but I've had to do this when I transitioned to working remotely for a NY based startup.

philsnow 6y ago

> A lot of people are saying this is a bad deal because you don't get to keep your entire TC when you leave the region - you effectively end up losing more TC in the long run. True but like... you also can have way lower expenses for housing... and if you move to a state with no income tax, you might not even lose almost any net income. It's easier to think of your "total compensation" without taking into account cost of living. Lots of people (esp tech folks) don't have a personal budget and don't keep track of their costs / expenses in nearly the same level of detail that they keep track of their income. The conventional wisdom on HN (for people who aren't going to be founding companies) is that if you join bigco FAANGs and bounce around among them for 20-30 years, you'll end up with way higher expected net worth by retirement than if you play the startup lottery. Part of this is because of the power of compound interest. You can get that engine started in your early 20s and pour a lot of your "spare" money into it, especially you don't have kids yet. This same argument applies to lowering your costs. If you live in SF, you could easily be paying $40k/y in rent or $100k/y on a mortgage. If you buy in a small town with 90% of a bay area comp package, you could be plowing all your housing savings into the compound interest machine. edit: $/y instead of $/mo

jakear 6y ago
/yr, surely?
- philsnow 6y ago
  ha, I misread your reply and came into this comment box all ready to say "no really mortgages can be like $100k/y there", but then actually read what I typed.
deleted 6y ago
[deleted]
novok 6y ago
Taxes are bigger, but rent is the only real major difference in costs, and your income starts outpacing whatever the rent difference is between say SF vs Seattle or Reno relatively quickly. Quantified it's about $20-50k/yr in pretax income. $20k being the single person and $50k being the person with kids who goes to public schools. Definitely a good thing to do during covid times, but you might want to move back after covid is over.

vmception 6y ago

> Your savings will be short term gained and you will lose all your friendships locally. Haha not exactly preaching to the choir here. We all are aware of what sacrifices we make and don't change course for those things. Its always "lets see what it's like over here, oh cool mountains! oh cool, beaches, oh cool new IPAs" or whatever. Try not to get completely isolated with age and figure it out!

joshxyz 6y ago

What the fuck is a TC man Edit: Total Compensation on an annualized, repeatable basis. Usually used in the context of compensation packages in the software industry with companies such as Google and Facebook. Thanks https://www.urbandictionary.com/define.php?term=tc https://www.urbandictionary.com/define.php?term=tc Motherfuck

hartator 6y ago
Total compensation?
zhoujianfu 6y ago
Total Compensation I figured out.
tdeck 6y ago
When people spend too much time on Blind they don't realize this term isn't something everyone knows :)
- three_legs 6y ago
  And what is Blind?

Y-bar 6y ago

> a state with no income tax Please excuse a non-american asking a question, but doesn't this mean that no money gets paid into retirements as well? Or is that a federal tax?

altdatathrow 6y ago
There's a 6.2% federal tax for a government-backed pension (social security) that may or may not be around by the time people need it. Most Americans are responsible for their own retirement funding, usually via an employer sponsored plan (401k and others) Either way, it has nothing to do with a state-level income tax.
- iso947 6y ago
  whats federal income tax on 400k? Any other Federal taxes on top of income tax and socials
  - reducesuffering 6y ago
    72-111k depending on marital status, house mortgage, and retirement savings. Typically 100k. There’s also ~15k for FICA: Social Security (small 65+ pension) and Medicare (65+ healthcare)[0] Any other federal taxes to the individual are insignificant or investment related. [0] https://smartasset.com/taxes/california-tax-calculator#pfVHM4NTGB https://smartasset.com/taxes/california-tax-calculator#pfVHM...
philsnow 6y ago
sibling comment answered your question, but I'll turn it around and ask, how is it elsewhere? Are retirement contributions compulsory?
- Y-bar 6y ago
  About 18% of your income (including social security payments if you are unemployed) are compulsory and set of for your retirement, on top of that many employers may make a tax-deductible 4% payment into the employees private retirement fund.

twblalock 6y ago

Yeah housing is cheaper in other areas. But everything else costs the same. An iPhone or a Honda Civic costs the same everywhere in the US. Leaving the Bay Area will lower your housing costs, but everything else you buy will take up a larger percentage of your income than it did before. Plus you'll be making less money -- in some cases, a lot less. Run the numbers and you might find out that even after paying for a Bay Area mortgage you would have more money in retirement in California than you would in a cheaper place. Don't move for cost savings. The economic benefits are not as strong as they appear to be. Only move somewhere if it's actually where you want to live.

apexalpha 6y ago
Sure, but you generally don't buy a new iPhone or Honda Civic every month, while your mortgage/rent is due every month again. Furthermore, it is not only housing cost that is lower outside major cities. Your hairdresser also has higher rent in a major city, as do her suppliers. There's more traffic so goods take longer to deliver. This is besides the fact that other states/places can and often do have lower taxes on goods than major cities. So your iPhone might actually be cheaper as well. Everything is more expensive in a major city because everyone has more expenses and passes those on.
- Der_Einzige 6y ago
  People finance their cars, and increasingly even their phones these days. You DO make monthly payments on your car (and sometimes your phone)
- lsiebert 6y ago
  Sales taxes generally go up in states with low income taxes fwiw.
  - Zach_the_Lizard 6y ago
    A lot of the high tax states have high taxes in multiple categories. Moving to a high sales tax, low income tax state might actually "reduce* your sales tax. NYC, where I live, has an 8.875% combined sales tax. And a high income tax. Texas, meanwhile, has a maximum combined rate of 8.25% and no income taxes. High property taxes. Moving to Texas would cut the sales tax I pay.

brobdingnagians 6y ago

A lot of people are leaving California anyways, and economies in other states are booming, so jumping on that ship with good compensation, even for the short term, is a win-win for anyone who is looking to get out while the getting is good. I know someone who moved _to_ California from another state a few years ago and got the truck virtually for free because the truck company had so many more people going in the opposite direction. But then they paid very high prices for the truck when they left.

dragonwriter 6y ago
> A lot of people are leaving California anyways Yeah, but the out-migration is largely at the low-end of the economic scale; with net in-migration at the high end.
- maxlamb 6y ago
  This was true in the past but this year with covid and the fires it’s likely the high end will see a big out-migration as well... https://www.theguardian.com/us-news/2020/sep/12/san-francisco-tech-workers-leaving-rent-covid-remote-work https://www.theguardian.com/us-news/2020/sep/12/san-francisc...
  - dragonwriter 6y ago
    That article neither says nor supports your “it’s likely that” conclusion (which is about San Francisco not CA as a whole, and is almost entirely speculative back and forth between different advocacy group spokespeople.)
    - bobwall 6y ago
      Ben Shapiro, Elon Musk, and Joe Rogan all are on the high end, and all have headed out. I also headed out, but I am only on the high end in terms of total world population, but they are real high enders fleeing the myriad of issues coming to a head in good ole CA in 2020.

ScottBurson 6y ago

> As soon as Stripe doesn't employ them - they're gonna be competing for remote-only workers wages (or whatever is local too I guess) unless they move back. And on top of that, they may have to accept a non-compete clause in their employment contract. All in all, they have a pretty strong incentive to remain a Stripe employee as long as possible. Stripe probably likes this.

dmode 6y ago

I think people misunderstand the SV salary situation. If you are a mid to senior level, you are pulling $400k annually, with daily pings from recruiters at Facebook, Google, Netflix, Airbnb, Instacart, Uber, Twitter etc., cost of living is the least of your concerns.