Opportunity knocks

[Target59]

I've got a recruiter after me to move to Chicago for a job that would be a substantial upgrade in salary, responsibility, and (I think) enjoyment. We haven't talked money yet, so I'm trying to set a number that it would take to get me to move to a place I'm not thrilled about and take the risk of a new position. I've very stable in my current role. I would be interested in thoughts about how much I should require to move. Here's my situation:

I'm 54 and planning to FIRE at 59. I'm married with 1 child who lives nearby with our grandson. We like the area (Pacific Northwest) and would retire back here. Our outdoor hobbies are very convenient to where we live.

The package would include generous relo and pay realtor fees to sell our house, which were planning to do soon anyway. On our current pace, Firecalc has us at $85k/year retiring at 59. That will accommodate our lifestyle including medical coverage, but we would like a bit more to be able to travel more. How much would you require the firecalc number to increase to go through the hassle and live away from "home" for 5 years?

 

[Aiming_4_55]

Congrats on the opportunity, I think. It's in the recruiter best interest to convince you to seriously consider the job and if you haven't talked money yet, you should understand the targeted range for the job. You might be wasting your time talking and thinking about it, if it's not really much more.

I assume you are not happy with your current job and/or you don't think the job will last the next 5 years, thus you have been searching and interviewing.

I would suggest comparing cost of living where you are at and the new location first and determine what is a break-even point, dollar for dollar. Then I would even look at the pay range for the job you have and want. Personally, you are not relocating for a personal need, just the job, so I would want to stay in the 75% or higher of the pay range, check Salary.com. For me, it would have to be 25% more total comp for me to consider the move.

You have some hidden costs:
How does this impact the wife's work or home life?
How often will you or the wife want to visit the grandson? How much will that cost?
How much will it cost to relocate back?
Does the new job require more days and hours on the job with more stress?
Will your current area or new area appreciate more over the next 5 years?
Will you rent or buy in the new area?

Those would be my general questions to start.

 

[cathy63]

I can't give a number, but a few thoughts came to mind as I was reading this:

- if you're in WA (you just said PNW, so I'm guessing), you'll have to go from $0 state tax to paying IL state tax

- winter is expensive in the midwest -- heat, clothing, snow tires, snow removal, etc -- another thing to factor in

- if you sell your house in the current market, and buy something for 5 years in IL, will you be able to buy the retirement home you want when you come back if property values continue on their current tracks in both places? This used to be a big trap for people who lived in CA and got transferred to TX for a few years (back before property values in TX started going up too); I don't know if it applies in your case, but it's worth looking into.

 

[6miths]

Going to be interesting to hear the responses to this query.

The two times that we changed jobs it had much more to do with enhancing quality of life and family situation than money. It seems that this would be a move for opposite reasons - increasing income and perhaps a slight bump in job satisfaction (though it isn't clear that you are unhappy where you are) at the expense of family and quality of life (although perhaps temporary if you are retiring back to the PNW). It sounds like you are so close to FIRE and on track and in a good place lifestyle and family wise, that I personally would have a tough time making the move unless the impact of possible increased job satisfaction is more of a factor than it seems to be. Bird in the hand and all that. I wouldn't underestimate the negative impact on moving away from your child and grandchild. This was our biggest regret in moving our young children away from their grandparents (your situation is quite a bit different though). If your plan at retirement was to downsize your primary residence then there might be an upside to moving now but if you are in your forever home now then it is a negative. It is unlikely that your new employer will pay relocation and real estate costs when you FIRE in 5 years so you will be out those. What guarantees will you have with your new employer? If you hate it, or they hate you... it could really mess things up.

Also, goes without saying that you will have to take into account the tax, COL, commute, safety issues of Washington/Oregon (or better yet border area) versus metro Chicago.

 

[MooreBonds]

I've got a recruiter after me to move to Chicago for a job that would be a substantial upgrade in salary, responsibility, and (I think) enjoyment. We haven't talked money yet, so I'm trying to set a number that it would take to get me to move to a place I'm not thrilled about and take the risk of a new position. I've very stable in my current role. I would be interested in thoughts about how much I should require to move. Here's my situation:

I'm 54 and planning to FIRE at 59. I'm married with 1 child who lives nearby with our grandson. We like the area (Pacific Northwest) and would retire back here. Our outdoor hobbies are very convenient to where we live.

The package would include generous relo and pay realtor fees to sell our house, which were planning to do soon anyway. On our current pace, Firecalc has us at $85k/year retiring at 59. That will accommodate our lifestyle including medical coverage, but we would like a bit more to be able to travel more. How much would you require the firecalc number to increase to go through the hassle and live away from "home" for 5 years?

As others have noted, consider all costs to not only relocate to CHicago, but then to relocate back (higher income taxes, closing costs, time to search for a house/rental, moving costs (which could be substantial moving across the country two times, even if you have relo allowance to Chicago), weather (potentially big issue compared to PNW weather)...Have you tried looking in your current area for other opportunities that might have a salary increase without the moving hassle and expenses both ways? What are the benefits package like - is health insurance and other benefits/retirement the same or better than your current employer? Would you simply stay in a rental in Chicago, given you would only be there a few years, and real estate commissions to sell in Chicago to move back could easy be $25,000+ (which is an AFTER-tax hit, meaning you'd need to earn maybe $40,000 just to pay for the real estate commissions to move back to PNW if you bought in Chicago). If you are doing a rental in Chicago, will you have to store or sell stuff to fit in a smaller rental, then have to buy new furniture when you retire? There's another several thousand after-tax expense. Any other costs like having to buy more airfare to visit family/vacations while in Chicago?

And don't forget the exponential decreasing curve once you hit the inflection point - you have to add exponentially larger amounts to the initial portfolio to really make a large impact to your 4% (or whatever % you pick) SWR amount.

If my current portfolio could have a 3.5% SWR value of about $85k and that was enough (with some fluff built in), I'd want at least $5k/year more in my FIRE budget to deal with the hassle of moving (which could pay for a decent vacation each year), assuming you really like the PNW. Which means you'd need a huge increase in pre-tax salary to add enough after-tax money to the portfolio to pay for that, along with all of the other after-tax impacts to living in Chicago.

 

[lhamo]

Look outside -- do you REALLY want to give up 6 months of this weather? I mean, yes, the winters here suck, but from what I have heard from friends who live in Chicago the winters there suck even more (ice/snow/slush on top of the endless grey). I would also be wary of exchanging the rapidly appreciating PNW property market for Chicago. And the extra taxes suck.

 

[Al18]

Before making a move to IL, I recommend investigating the tax situation in IL. If you're being offered a state job, I'd be especially concerned - many governments in IL seem to be on the verge of bankruptcy according to Pension Tsunami

 

[njhowie]

If you are only 5 years until retirement, I say to simply stay put. Thank the recruiter, tell him/her to stay in touch, just in case you get terminated for some unexpected reason.

If you are trying to come up with a number to get you to move, then make it an almost ridiculous amount, how about double your current salary as the starting point, and let them talk you down to 75% above current salary.

Are you prepared to be living far away from the family? Instead of being able to see them at will, maybe it's only going to be a couple times a year.

Lastly, are you in any position to approach current employer for a raise or get a little something extra out of them? Have they recently given you a bump in salary? The job market is tight these days, employers do understand that there is competition for top-notch employees, and most understand that they are going to have to begin making concessions to hold on to their top performers, or be prepared to find replacements - which is generally a long and expensive process...they take the chances of going with an unknown person, and the possibility that the replacement doesn't work out. More times than not, it's financially easier and less risky for the employer to simply give the current employee some kind of raise, bonus, or other incentive for staying on.

 

[Aerides]

5 years you'll be away from your grandson growing up would be a deal breaker, if not for you, but perhaps for your wife? Yes, I know visits/holidays, but there's a big difference between being in the same town vs. 5 states away.

 

[ERD50]

Look outside -- do you REALLY want to give up 6 months of this weather? I mean, yes, the winters here suck, but from what I have heard from friends who live in Chicago the winters there suck even more (ice/snow/slush on top of the endless grey). I would also be wary of exchanging the rapidly appreciating PNW property market for Chicago. And the extra taxes suck.

But the compensation is hot, humid summers!


If the money's right (after taxes and COL differences), it's worth considering IMO. I'd rent rather than buy for 5 years though.



Heck, even if you don't like it (and I suspect you will like at least some aspects of it, for all the negatives, Chicago does have a lot to offer), it's a change of pace, and 5 years isn't forever. If you really hate it, you might be able to duck out early.



-ERD50

 

[eytonxav]

You said you are stable in your existing position. Does that mean happy or somewhat discontented? If happy with the current job, it seems with 5 years until retirement and living where you want to be and with family nearby, why move to an unknown situation and locale even for more money.

 

[OldShooter]

IL and Chicago are both almost certainly heading into bankruptcy. That makes the tax situation and the housing resale situation very hard to predict. Said another way, a decision to move to Chicago is not just a decision to "move to another state," so I'd encourage you to consider the special risks.

 

[tony d tiger]

Similar situation to yours, but no grandchildren; I took a 1 year post in Korea and it's turned out well for me. Weigh your pro's and con's - make an informed decision and execute. Be prepared for the spouse to change heart; remain flexible but focused - everything happens for a reason.

 

[Target59]

I'm the OP. Thanks for the feedback. A clarification: My current position is very stable, but I'm bored and sometimes frustrated. I can do it another 5 years if necessary, but a fresh opportunity would be fun. The new opportunity would move me from upper middle management to upper management. Also, I know the new CEO of the company that's recruiting me. We've been friends for a long time and he wants me on the team. How bad he want$ me remains to be seen.


At this point, I don't think I would do it unless the job will be much more fulfilling, I have a contract that protects me if something goes haywire, and it moves the Firecalc needle by at least $7500 per year.


I'll keep you posted.

 

[MooreBonds]

I'm the OP. Thanks for the feedback. A clarification: My current position is very stable, but I'm bored and sometimes frustrated. I can do it another 5 years if necessary, but a fresh opportunity would be fun. The new opportunity would move me from upper middle management to upper management. Also, I know the new CEO of the company that's recruiting me. We've been friends for a long time and he wants me on the team. How bad he want$ me remains to be seen.

If you have a connection like that, use every opportunity you can to have them pay for as much as you can pre-tax. Like see if they can agree to 6 flights/year back home to see the family, as well as any other perks/benefits they can pay for to reduce your tax impact and make it more favorable (although with a larger organization, it can be tough to do that). Also, any opportunity to travel w/ the new company (business trips or conventions), and bring your wife along and let the company pay for some trips (your flights/hotel) that your wife could just pay for her airfare for?

 

[Scuba]

The issue of moving back to the PNW after 5 years away really needs to be thought through. We moved from So CA to PA for about 3 years. Initially we kept our home in CA and rented it out, but after about 18 months we sold it for a very substantial profit. However, when we moved back to CA about a year after selling it, we had to pay $300K more for a smaller place in the same area. The other thing I hadn’t fully appreciated is that if we had kept our original CA home, our property tax base would be about half of what it is now. Thus our property taxes are around $7K/year more than they would have been if we had not relocated.

I suspect moving from the PNW and then moving back could have similar consequences for you. We were still able to RE, but had to work longer than originally planned to compensate for these costs.

 

[jollystomper]

As others have said, a lot can happen with real estate in 5 years. Plus there is additional stress just in the act of moving, even if you are able to sell and return. I would only consider taking the new position if it paid enough to allow you to rent in Chicago, keep your current home, pay for frequent trips back, and still allow you to sock away much more than you are able to now and (if you choose) RE earlier than your current plans.

 

[freedomatlast]

I was in a similar situation about five years ago. I decided to decline the offer to move to the mid-west for higher pay, and now I'm glad I did. It just wasn't worth the stress and risk to me being that close to retirement.

 

[mrfeh]

Just my opinion - I wouldn't relocate under these circumstances unless the pay increase was really, really big. Like 2x.

 

[Jerry1]

I’m in the stay put camp. Five years of a grand child’s life is a lot. I’m also in the camp that to answer your question, it would take a lot. Even then it’s not life changing money in and of itself. If you’re making $200K and you get $300K, for five years, that’s $500K more. Now net out all the additional expenses. Let’s be generous and say that’s only $100K. So you net $400K. How would that change your life (only you can answer) but I think, not much. Further, you could just work a couple more years and not go through all the relocation and time away from family.

There’d have to be something much better than more money for me to do that. For example, I’ve always lived in Michigan. If I could go to Hawaii for five years . . .then maybe I’d think about it. Life experience > money, especially once you’ve become financially secure.

 

[ImThinkin2019]

I lived in the Chicago area for about 15 years. Myself and everyone else I know who has lived there has loved it. Chicago is a very nice city, the people in the area are nice, and there is a lot to do. So you might enjoy living there for a while. Be prepared for high property taxes, though. The house we lived in last sold for $400K and the taxes were $12K.