I see these mind boggling sums in the Valley, $300.000, $600.000, can you please translate: how much does that net you per month, after taxes, reasonable healthcare and rent, ideally no further than 1 hour commute and free of black mold?
L6 at Amazon, single, no kids:
~$400K TC $33,333 per month gross
About $100K in federal tax, no state income tax in WA. $8333 per month
Healthcare: $34 a month for an HSA plan. $3,650 over the course of the year goes into the HSA, including the employer portion. That ends up being about $205 out of my pocket. This is a bit complicated if you're not American and familiar with the different account types but it's basically money you're saving that's not taxed, but you can only use it for healthcare expenses.
$3000 max out of pocket per year for medical expenses. For all intents and purposes you can assume that's the most I'll ever pay. Out of network stuff makes it more complicated, but my network has essentially everyone. $250 a month, but you can use the HSA funds from above, so net $0.
Rent: In the Seattle area a newish one bedroom that's about 50-60 m^2 will run you say, $2200 a month. You can go cheaper or more expensive, but that will get you something that's plenty nice. Commute is extremely dependent on exact location, but if you're in the city, the majority of it has a commute time of less than an hour.
$33,333 -$8333 -$34 -$205 -$2200 = $22,561 income remaining.
I think you'd be able to survive :)
Obviously doesn't account for internet, a phone, a car, utilities or anything else, but that's maybe another $2K a month on the high end.
My salary is just above $200k. After 6% contribution to retirement (max my employer will match), and $25k a year set aside for employee stock purchase program (max I can set aside - our ESPP is really good), I get just under $10k a month in direct deposit.
My rent is $3k a month. My discretionary spending is also around $3k a month. So I save $4k a month (in cash).
I also get around $350k in stock compensation. A bunch get sold off to cover taxes, but I don't sell anymore, as I believe in the company, and it has done well in the last 2 years.
Altogether, I save above $250,000 a year - in vested stock, and cash.
Yeah that is playing on easy. Now try with a big suburban home, private schools, and wife who needs a lot of healthcare.
Add two kids, each 2k/mo/child in daycare.
That's 7k/month extra.
Still leaves you a nice chunk though.
That’s if you’re buying $1.3M house. There are plenty of good houses to be had in Seattle for $900k.
Maybe you are right, then the math changes, but only slightly?
Note I didn't even get into IRAs, 401k, Megabackdoor Roths, etc.
For one healthcare is usually not an issue because you have a good health plan with an out of pocket maximum. Your employer pays the premiums. Out of pocket you’re looking at about $10k/yr on the higher end, barring big medical problems or issues with your insurer (sadly, always a possibility). Let’s call that $1k/month.
Rent also depends a lot on how many bedrooms you need and how fancy you want to go. Let’s say it’s $2.5k/month (including utilities).
At $300k/yr in California you’re taking home about $180k/yr. So that’s about $15k/month after tax and $11.5k/month after rent and healthcare (you really aren’t likely to spend that much on healthcare. More on rent if you have kids). Not including of course things like 401k which can both lower your taxable income and get extra money from your employer
Over $200k per year in take home pay after most expenses.
Rough numbers, my monthly salary is ~$10k/mo (after tax) and I vest ~$50k in stock every 3 months (also after tax)
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.