Ideal TC in Austin translating to 240k in Bay Area
Context: Single guy (on H1B) with no mortgage and intention of buying house. Planning for a potential move to Austin. Seen a lot of posts on Blind where people suggest 150-160k in Austin is as good as 240-250k in Bay. Math: Trying to break it down in terms of taxes, housing and CoL Based on smartasset paycheck calculator to compute taxes, I find that the taxes are approx 10% less in TX, making after taxes income of 240k as 150 vs 172 roughly in Bay Area and Austin respectively. Coming to the after tax income (as computed above), housing and utilities comprise a fair 30% of total monthly income in Bay Area (assuming a studio/1br rent). The same is roughly 50% cheaper in TX. This makes income after living expenses as 105 vs 146 roughly in Bay Area and Austin respectively. If we account these two major differentiators, as per my math, 240 in Bay Area comes out to be 200k in Austin, TX. Would love to get more thoughts, addressing flaws and feedback around the high-level math. YoE: 4.5 with MS TC: 240
Austin is roughly 25% cheaper. It used to be about 40% cheaper but due to companies moving here, the cost of living has gone up. So you need atleast 180 for an equivalent salary.
Electricity and rent are far cheaper, but public transit and land sprawl can fuck you. I recommend everyone in Austin get a car and consider that in how it affects your comp. If you want to live near downtown, median rent is going to be 2k-4k range (includes 2+ bedroom). That reduces the need for a car, but groceries and other errands will still factor into that. You can get a great 1br/1ba for $1.2-1.7k outside of the downtown area. With 4.5 years at MS, I think you can do better than 150. Agree with suggestions for a floor closer to 180
Your goal should be to save the same or more in Austin. Run the numbers.
^^ this. Small addition you should be able to save same or more while maintaining similar or better life style.
+1 what matters is what you can save at the end of day
The problem with calculators is they don’t take into account that your lifestyle will likely be drastically different. Sure that 1br in the BA that you spend 3k on is gonna morph itself into an ultra luxury 2b2ba in Austin that comes in at the same price. Sure you could go find a 1br for $1200 in Austin, but the fact is you won’t. If you keep all else the same, the calculators are probably right, but if you factor in you’re making over 150k chances are you aren’t buying a used Honda Civic when you land in Texas
What? You can easily find a 1bed in Austin for $800
Let me try running the math using adp salary paycheck. Assuming 250k in BA and 160k in Austin. The calculator is telling me my annual take home is 150k applying CA tax + federal, while the annual take home is 118k applying only federal since there is no state tax in Texas. This is without any 401k or HSA contribution to make the math simple. Now you said 30% of that are just sunk cost in BA, which leave you about 100k. In Texas, 25k would get you about the same quality of apartment. So for Austin, your take home after housing and utilities is 118k - 25k = 93k, compare to a 100k in BA. Thought ?
Austin is much more boring that Bay area. Take at least 200k$. Your going to need it for the monthly flights out of Texas to maintain sanity!
Its not boring by a long shot. What makes a place interesting is having friends. Plenty of stuff to do if you have them.
Thats just my perspective. I lived in Austin before this.
200k is much more reasonable than 150k I can't think of any justification how 150k in Austin is equivalent to 240k in Bay area.
Thank you for the agreement.
See the house price. Triple ...