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Old 09-02-2015, 07:32 AM   #21
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When I started working it seemed like $100k/year salary was a big deal, ...
I don't know when you started working...that's even a bigger factor than where you live.

The answer is "no" ($200K is not the new $100K) if you started working after 1994, and is "yes" if equal to or less than 1994. That is, if you think gauging the answer based on Medicare withholding salary limits is a valid assumption.

I considered the number of days where I got an end of year "raise" because I surpassed the Medicare salary limit a "big deal", but not until later in my career.

Through the magic of Exel I'll paste my justification.

Code:
       Medicare   Proportional
       w/h limit    increase to $200K
                      in 2015    
1980    $25.9    $43.7
1981    $29.7    $50.1
1982    $32.4    $54.7
1983    $35.7    $60.3
1984    $37.8    $63.8
1985    $39.6    $66.8
1986    $42.0    $70.9
1987    $43.8    $73.9
1988    $45.0    $75.9
1989    $48.0    $81.0
1990    $51.3    $86.6
1991    $53.4    $90.1
1992    $55.5    $93.7
1993    $57.6    $97.2
1994    $60.6    $102.3
1995    $61.2    $103.3
1996    $62.7    $105.8
1997    $65.4    $110.4
1998    $68.4    $115.4
1999    $72.6    $122.5
2000    $76.2    $128.6
2001    $80.4    $135.7
2002    $84.9    $143.3
2003    $87.0    $146.8
2004    $87.9    $148.4
2005    $90.0    $151.9
2006    $94.2    $159.0
2007    $97.5    $164.6
2008    $102.0    $172.2
2009    $106.8    $180.3
2010    $106.8    $180.3
2011    $106.8    $180.3
2012    $110.1    $185.8
2013    $113.7    $191.9
2014    $117.0    $197.5
2015    $118.5    $200.0
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Old 09-02-2015, 07:42 AM   #22
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So your sample is not representative of the entire market, nor do software engineers make up all of IT.


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I agree with you that Software Engineers do not make up all of IT, but generally the starting salaries of SE's are much higher than you have quoted. If one were in SF they would be even higher.
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Old 09-02-2015, 07:42 AM   #23
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In computers, 100k is just your average senior guy with 10 years experience on the right tech. 150 is kick ass dudes, and 200 is pretty rare, usually directors or large program leads.


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Eh, when my wife quit her job as a senior software engineer this year (not a project lead or really in charge of anyone), she was pulling in over $260k.
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Old 09-02-2015, 08:32 AM   #24
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Seems to me that take-home pay is what matters. Big taxes at the $200K - $400K level tend to shrink the thrill of it all.

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Old 09-02-2015, 08:43 AM   #25
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Seems to me that take-home pay is what matters. Big taxes at the $200K - $400K level tend to shrink the thrill of it all.

Amethyst
+1 $260K - $60K federal - $10K SS + Medicare, now you are talking $190K Subtract about $40K more out of that for living in a high cost area to make this money and you are at $150K It is still a huge amount of money but not "lets buy a 60 foot yacht" type money by any means.
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Old 09-02-2015, 08:51 AM   #26
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Yes. It's new 100K for me. I made my first 200K in 1998 and it's still 200K..so with inflation it sure feels like 100K...
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Old 09-02-2015, 08:52 AM   #27
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I've lived in the SF bay Area all my life and generally I'd say $200k is the new $100k. While I'm not working anymore, it appears that $100k is a good income, $150K is very good and $200k is a high earner.
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Old 09-02-2015, 09:07 AM   #28
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Eh, when my wife quit her job as a senior software engineer this year (not a project lead or really in charge of anyone), she was pulling in over $260k.

Makes me wonder if I made the right decision going with a government job in a low income region. I graduated into the dot com implosion which played a big part in my decision. Back then I couldn't tell which internet company would survive or become roadkill. A safe and secure gov job with a COLA pension looked like a good bet at the time.

Oh well, I have 15 years vested in the pension. I'm not going to leave that until I am FI (probably 3 more years).
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Old 09-02-2015, 09:08 AM   #29
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Seems to me that take-home pay is what matters. Big taxes at the $200K - $400K level tend to shrink the thrill of it all.

Amethyst

Where I live there are no state income taxes and minuscule city taxes. It makes a big difference.

My brother makes almost $30k more than me in another state but his take home is about the same as mine after fed/state/city taxes. He lives in a big city while I essentially live in a suburb of one.
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Old 09-02-2015, 09:23 AM   #30
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I disagree with these numbers. DS tells me starting salaries for software engineers with 3 years experience are 120K in start ups not including stock options. Starting salaries are higher in established companies such as Google/Apple/Facebook, etc.
Sounds too high. It's been 4 years but I was at that kind of megacorp and we were on the same scale as the Silicon Valley people and I don't think salaries have soared that much. I could be wrong.

Not sure how accurate glassdoor is, but the numbers they show seem more reasonable.

Google Salaries | Glassdoor
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Old 09-02-2015, 09:26 AM   #31
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I'd give Glassdoor more credence than the few "mine is bigger than yours" posts here, lol!
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Is $200k the new $100k?
Old 09-02-2015, 09:42 AM   #32
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Is $200k the new $100k?

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I'd give Glassdoor more credence than the few "mine is bigger than yours" posts here, lol!

+1, a lot of very myopic posts here. I travel the country consulting to CIO/CTO's in medium/large business and government, helping reduce labor costs with capital spend, with full access to the corps labor costs per position, but what do I know about salaries.


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Old 09-02-2015, 10:01 AM   #33
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Is $200k what it takes now to say you've made it?
I remember the old rule of thumb where "making it" takes an annual salary more than one third of the median home price in your town or city, so it's a bit higher than that where I live. Of course these days with dual incomes and low mortgage rates maybe it doesn't need to be this high?
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Old 09-02-2015, 10:32 AM   #34
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IMO, $200K is a helluva salary, even in SF or NY.
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Old 09-02-2015, 12:03 PM   #35
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I remember the old rule of thumb where "making it" takes an annual salary more than one third of the median home price in your town or city, so it's a bit higher than that where I live. Of course these days with dual incomes and low mortgage rates maybe it doesn't need to be this high?
Median home price in our zip is around $685K. I guess you don't have it made if you're only getting $200K much less $100K.

A $100K salary in high COL areas certainly doesn't feel like it's enough if you need to save for down payment, retirement and emergency funds at the same time. I make less than that so I'm prioritizing tax advantaged retirement savings. If house prices drop to reasonable levels, then I'd consider a 401K loan and raiding the Roth.
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Old 09-02-2015, 12:21 PM   #36
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Old 09-02-2015, 12:32 PM   #37
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Makes me wonder if I made the right decision going with a government job in a low income region. I graduated into the dot com implosion which played a big part in my decision. Back then I couldn't tell which internet company would survive or become roadkill. A safe and secure gov job with a COLA pension looked like a good bet at the time.

Oh well, I have 15 years vested in the pension. I'm not going to leave that until I am FI (probably 3 more years).
Rather than gaze wistfully at the greener grass of industry salaries you can value your pension directly as part of your compensation. Friends of mine teaching college in the CA state system make about $100K/yr, and sometimes make envious comments about the somewhat higher salary I receive in industry (though my pension is much worse and will freeze after this year). The annual pension they will receive, however, increments by about $5K for each additional year they work. The value of a $5K pension as an annuity is about $70K (depending somewhat on the age of the recipient). So I believe they could think of their total compensation as comparable to that of someone making $170K with no pension - right in the range of what their industry peers make.

And suddenly the disparity between industry and government compensation levels disappears (if not reverses).
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Old 09-02-2015, 12:43 PM   #38
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Rather than gaze wistfully at the greener grass of industry salaries you can value your pension directly as part of your compensation. Friends of mine teaching college in the CA state system make about $100K/yr, and sometimes make envious comments about the somewhat higher salary I receive in industry (though my pension is much worse and will freeze after this year). The annual pension they will receive, however, increments by about $5K for each additional year they work. The value of a $5K pension as an annuity is about $70K (depending somewhat on the age of the recipient). So I believe they could think of their total compensation as comparable to that of someone making $170K with no pension - right in the range of what their industry peers make.

And suddenly the disparity between industry and government compensation levels disappears (if not reverses).
That's how I look at it. Industry pays better in your working years, government pays better in your retirement years.
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Old 09-02-2015, 01:01 PM   #39
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That's how I look at it. Industry pays better in your working years, government pays better in your retirement years.
More control in industry though over retirement savings. Some EU countries have cut pensions by 10%, sometimes even 25% past few years.
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Old 09-02-2015, 01:16 PM   #40
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Friends of mine teaching college in the CA state system make about $100K/yr, and sometimes make envious comments about the somewhat higher salary I receive in industry (though my pension is much worse and will freeze after this year). The annual pension they will receive, however, increments by about $5K for each additional year they work. The value of a $5K pension as an annuity is about $70K (depending somewhat on the age of the recipient). So I believe they could think of their total compensation as comparable to that of someone making $170K with no pension - right in the range of what their industry peers make.

And suddenly the disparity between industry and government compensation levels disappears (if not reverses).
The $5K a year in pension at $100K annual salary seems unusually high. I think even public safety officers only get 3% per year max.

For our retirement system, we get 2% so at $100K salary, that's more like $2,000 pension per year of service. Another thing, we don't contribute to social security but have mandatory DB plan contributions. Our contribution is 10% vs 6.2% for SS. With private companies, I remember reading somewhere that DB plan benefits and 401k match is on top of the salary. The COLA on our pension is good but isn't quite as generous as SS. COLA is either CPI or 2% whichever is lower.

That said, the fringe benefits are really nice (holidays, medical, sick leave, vacation).
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