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> As if I don't understand how compounding my raise percentage works over the course of my career That only helps if your raise percentage exceeds inflation. O

> As if I don't understand how compounding my raise percentage works over the course of my career That only helps if your raise percentage exceeds inflation. Otherwise, you could actually find yourself worse off. e.g: $100K earnings + 2% $50K living + 3% -------------------- $59,756K after living expenses after 30 years. $70K earnings + 2% $20K living + 3% -------------------- $77,177 after living expenses after 30 years.

ImprovedSilence 14y ago
That's true, and you make good points. I guess another factor is raise percentage, in this industry, I've never heard of a 2% raise unless they're thinking of letting you go... (or you've got 15 yrs under you belt, by which point lets hope you're making enough already) But I bet that's different the farther out you go from cities.... I wonder if there is a correlation with getting crummier raises in the lower cost of living areas as well?
- randomdata 14y ago
  The 2% was made up for demonstration purposes, I'm not really sure how it plays out in the real world. It is a good question. Though consider this: $70K + 5% [1] $50K living + 3% ----------- $2.5M saved after 30 years [2] $70K for life $20K living + 3% ----------- $2.7M saved after 30 years Even a decent rate may not be all it is cracked up to be. [1] For the first 15 years, whereafter you suggest it could plateau (at around $140K, in this case, which doesn't seem unreasonable given the current market and historic income increases) [2] Assumes all non-living expense allocated income is invested at 5%.
- vonmoltke 14y ago
  > * I guess another factor is raise percentage, in this industry, I've never heard of a 2% raise unless they're thinking of letting you go...* Sounds like you have never worked for a large defense contractor. The "standard" raise given to ~70% of the engineers last year (my last review cycle working for that company) was 2.1%.
  - ImprovedSilence 14y ago
    So I work in the same industry, and I'd suggest shopping around some companies if possible, or explore the "consulting" side of things (which can still be very technical), but much more lucrative... I'm sure you can get a good pay bump just from a company switch too.

ImprovedSilence 14y ago

That's true, and you make good points. I guess another factor is raise percentage, in this industry, I've never heard of a 2% raise unless they're thinking of letting you go... (or you've got 15 yrs under you belt, by which point lets hope you're making enough already) But I bet that's different the farther out you go from cities.... I wonder if there is a correlation with getting crummier raises in the lower cost of living areas as well?

randomdata 14y ago
The 2% was made up for demonstration purposes, I'm not really sure how it plays out in the real world. It is a good question. Though consider this: $70K + 5% [1] $50K living + 3% ----------- $2.5M saved after 30 years [2] $70K for life $20K living + 3% ----------- $2.7M saved after 30 years Even a decent rate may not be all it is cracked up to be. [1] For the first 15 years, whereafter you suggest it could plateau (at around $140K, in this case, which doesn't seem unreasonable given the current market and historic income increases) [2] Assumes all non-living expense allocated income is invested at 5%.
vonmoltke 14y ago
> * I guess another factor is raise percentage, in this industry, I've never heard of a 2% raise unless they're thinking of letting you go...* Sounds like you have never worked for a large defense contractor. The "standard" raise given to ~70% of the engineers last year (my last review cycle working for that company) was 2.1%.
- ImprovedSilence 14y ago
  So I work in the same industry, and I'd suggest shopping around some companies if possible, or explore the "consulting" side of things (which can still be very technical), but much more lucrative... I'm sure you can get a good pay bump just from a company switch too.