5% down on $600,000 is still $30k, which is at least six months’ salary for many, many people. I know HN skews wealthy but the average median family income in California is $75k. Good luck!
> Assuming $500k in a big coastal city: $285k after taxes
In Californian coastal city, that is, or in NYC. It’s $305k in New Jersey, and $335k in Washington. And that is if you’re single. If you’re married, with $500k you’re looking at $325k after tax in California/NYC, $338k in NJ, and $366k in WA.
I think your salary estimates aren't high enough. In California you're paying around 35% in state/fed income taxes, which means that with $225k gross you have $145k net of taxes and under $100k after living expenses. With $325k gross you're $160k after taxes and living expenses. Even starting at the top of your range, it gets you just over halfway there before investment gains.
The take home in California would be $20k+ per month. Income tax for a single person would be 40% and if married it'd be 32%. That's not counting any deductions you could do or $401k match.
edit: The comp is also not counting stock appreciation which historically was a lot. If you joined Apple in 2019 with a $200k in annual RSUs over 4 years then this year you'd be making $800k from those RSUs. So likely over a million in total tax reportable income.
Agreed. For a married couple at $300k in the bay area, less than $90k goes to taxes, and that's assuming just standard deduction. Realistically, if you're paying $6k/month for housing not including insurance, you're probably itemizing another $5-$10k above the standard deduction. And at $300k, you're hopefully maxing out a $19k 401k contribution pretax. Probably you'd be spending <$80k/year in tax.
Your tax calculation is low I think - looks like $250k would put you in the 33% band, let alone any other regional tax calculations.
$60k/year spending for the rest of your life is very ambitious for a high CoL area. I don't think you're accounting for medical insurance, car ownership, home ownership fees, children, a spouse that earns less than you, etc etc. Costs go up as you get older.
I also don't think you've accounted for inflation.
Please also keep in mind that huge Google/Facebook/Bay Area salaries are a historical anomaly and will not persist throughout your entire career.
I made that much for 4 years and have a total of 10 years work experience. I’m nowhere near retired. And I’ve been single the entire time.
$500k is more like $275k after taxes. Assuming $60k/yr in living expenses, which is pretty frugal in the Bay Area, that’s barely over $1M in savings in 5 years. Let’s say $1.3M after return on investments over 5 years.
Nowhere close to retirement money anywhere in the US.
$200k as a solo person without kids gets you a fine life even in bay area. If you are a couple making $400k, you can even have kids and still be all right.
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.
That’s 96k per year. Assuming 20k in taxes and 10k in health insurance (both very generous numbers), that’s still 66k per year. Outside of some Californian cities, 66k is more than enough to lead a comfortable life on.
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