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If they are in the US they are going to pay ~30-35% depending on married vs. single for income from $300-400k (less on the first $300k). This is also all income

If they are in the US they are going to pay ~30-35% depending on married vs. single for income from $300-400k (less on the first $300k). This is also all income they could invest given they don't need it to support their lifestyle. Even it it were only $50k this is huge since they could accelerate retirement because it would increase the amount they invest annually by 2-3x. It's a lifestyle choice for sure but this money would have a significant impact.

TameAntelope 5y ago
$50k/yr doesn't really accelerate retirement as much as it would seem. You probably spend at least some of that on lifestyle creep, and if you're at $300k/yr already, you've likely already gone about as far as you can in tax advantaged savings sources. I'd probably still take it, but I'll admit I'm a bit more money motivated than the average person.
- lazide 5y ago
  If you’re comfortable-but-barely-stable relationship wise, that extra money would cost you a whole lot more in ensuing legal fees. Not counting the emotional pain and suffering.
  - paulryanrogers 5y ago
    Are you saying the extra money and travel could contribute to divorce?
    - lazide 5y ago
      I’m saying extra money in exchange for instability/changes and less work life balance can easily strain even previously rock solid relationships that are solidly in agreement about and aligned towards those goals. if someone has a relationship where there are not shared goals of more money and change/excitement? Well, if you think you’d end up ahead on the money side at the end of that fallout, you’d be fooling yourself.
- dpark 5y ago
  That’s nonsense. You certainly could spend that on lifestyle creep, but you don’t have to (and probably shouldn’t). Investments also do not have to be tax advantaged to be lucrative. Your argument about an extra 50k could be applied to literally any raise.
  - TameAntelope 5y ago
    Getting an additional $50k hits differently when you're making $300k already vs. $50k. Your first $50k is worth so much more to you than your second, or third... or seventh. When you already have $300k/yr, your life doesn't change by getting an additional $50k/yr. When you only have $50k/yr, your life completely changes when you get an additional $50k/yr. People who are in the $300k/yr. position have the luxury of choosing other things besides making more money, which is what this person we're talking about was able to do. To put it another way, how much longer will he live, if his stress levels are reduced substantially by opting to not take that new job?
    - dpark 5y ago
      You’re saying that someone getting a 33% raise won’t be affected by the extra money. This is absurd for people who are making a good professional income. We’re talking about someone making $300k, not Bill Gates. This is still well within the realm of $100k/year being very meaningful. 50k post tax is enough for someone currently maxing out their retirement (including mega backdoor 401k) to nearly double their retirement investment. This could cut time to retire in half. Or it’s enough to comfortably put their kids through college in a few years. Or easily pay for private school for your kids. Or it’s enough to pay for vacations that were previously out of reach. Or enough to massively upgrade houses (assuming you want to succumb to lifestyle inflation). An extra 50k post-tax is absolutely a lot of money to someone currently bringing home about 210k post tax.
      - TameAntelope 5y ago
        Sorry, but it just isn't, and I can say that from personal experience. Yes, the % amount looks high, but your 400th thousand dollar just isn't as impactful as your 100th thousand dollar. 50k post tax is not enough for someone currently maxing out their "retirement" to "nearly double their retirement investment, that isn't correct. The point is, after a certain absolute dollar number, additional dollars are incrementally less valuable, which makes questions like, "What does this do to my happiness?" a lot more relevant. Even if it allows you to retire meaningfully earlier, so what? Dying at 65 because you were stressed is definitely not worth it.
lazide 5y ago
If they are in (or would move to) California don’t forget to tack on another 10-11%ish in state income taxes for that bracket and on amounts spent directly on non-capital assets 10% sales tax. Which is about 50%
jjav 5y ago
> If they are in the US they are going to pay ~30-35% That raise is on top of their salary so the additional dollars are taxed at the highest rate. For taht example executive, federal tax alone on the additional dollars is 35% most likely (35% for sure if single, probably 35% if married with a working spouse earning less). Then add state tax which here would likely be 10.5% and then add medicare tax at 2.35% and there may also be unemployment insurance tax and perhaps other assorted smaller deductions. So yes, for additional dollars from a raise a good rule of thumb is that only 50% can reach you.

TameAntelope 5y ago

$50k/yr doesn't really accelerate retirement as much as it would seem. You probably spend at least some of that on lifestyle creep, and if you're at $300k/yr already, you've likely already gone about as far as you can in tax advantaged savings sources. I'd probably still take it, but I'll admit I'm a bit more money motivated than the average person.

lazide 5y ago
If you’re comfortable-but-barely-stable relationship wise, that extra money would cost you a whole lot more in ensuing legal fees. Not counting the emotional pain and suffering.
- paulryanrogers 5y ago
  Are you saying the extra money and travel could contribute to divorce?
  - lazide 5y ago
    I’m saying extra money in exchange for instability/changes and less work life balance can easily strain even previously rock solid relationships that are solidly in agreement about and aligned towards those goals. if someone has a relationship where there are not shared goals of more money and change/excitement? Well, if you think you’d end up ahead on the money side at the end of that fallout, you’d be fooling yourself.
dpark 5y ago
That’s nonsense. You certainly could spend that on lifestyle creep, but you don’t have to (and probably shouldn’t). Investments also do not have to be tax advantaged to be lucrative. Your argument about an extra 50k could be applied to literally any raise.
- TameAntelope 5y ago
  Getting an additional $50k hits differently when you're making $300k already vs. $50k. Your first $50k is worth so much more to you than your second, or third... or seventh. When you already have $300k/yr, your life doesn't change by getting an additional $50k/yr. When you only have $50k/yr, your life completely changes when you get an additional $50k/yr. People who are in the $300k/yr. position have the luxury of choosing other things besides making more money, which is what this person we're talking about was able to do. To put it another way, how much longer will he live, if his stress levels are reduced substantially by opting to not take that new job?
  - dpark 5y ago
    You’re saying that someone getting a 33% raise won’t be affected by the extra money. This is absurd for people who are making a good professional income. We’re talking about someone making $300k, not Bill Gates. This is still well within the realm of $100k/year being very meaningful. 50k post tax is enough for someone currently maxing out their retirement (including mega backdoor 401k) to nearly double their retirement investment. This could cut time to retire in half. Or it’s enough to comfortably put their kids through college in a few years. Or easily pay for private school for your kids. Or it’s enough to pay for vacations that were previously out of reach. Or enough to massively upgrade houses (assuming you want to succumb to lifestyle inflation). An extra 50k post-tax is absolutely a lot of money to someone currently bringing home about 210k post tax.
    - TameAntelope 5y ago
      Sorry, but it just isn't, and I can say that from personal experience. Yes, the % amount looks high, but your 400th thousand dollar just isn't as impactful as your 100th thousand dollar. 50k post tax is not enough for someone currently maxing out their "retirement" to "nearly double their retirement investment, that isn't correct. The point is, after a certain absolute dollar number, additional dollars are incrementally less valuable, which makes questions like, "What does this do to my happiness?" a lot more relevant. Even if it allows you to retire meaningfully earlier, so what? Dying at 65 because you were stressed is definitely not worth it.

lazide 5y ago

If they are in (or would move to) California don’t forget to tack on another 10-11%ish in state income taxes for that bracket and on amounts spent directly on non-capital assets 10% sales tax. Which is about 50%

jjav 5y ago

> If they are in the US they are going to pay ~30-35% That raise is on top of their salary so the additional dollars are taxed at the highest rate. For taht example executive, federal tax alone on the additional dollars is 35% most likely (35% for sure if single, probably 35% if married with a working spouse earning less). Then add state tax which here would likely be 10.5% and then add medicare tax at 2.35% and there may also be unemployment insurance tax and perhaps other assorted smaller deductions. So yes, for additional dollars from a raise a good rule of thumb is that only 50% can reach you.