Higher paying job in a high COL area - worth it?

[sarahbeth918]

I'm in a bit of a quandry, and hoping some of my fellow Mustachians can help me reason it out.

My husband and I are about 4-8 years from FIRE, based off our models. We live in Austin, TX (fairly low COL) and will have paid off our house and the last of the hubby's student loans by the end of the year, then are just pumping everything else towards FIRE.

We both work in the tech industry. The vast majority of the time, I like my job, which pays me well in the Austin market. Despite not looking for a new job, I got a call from a recruiter for a position that actually sounds pretty cool at another tech company. It would pay considerably better than my current job, but it's located in the Bay Area (super high COL). I'm now at the point in interviewing where they're wanting to fly me out for in-persons.

If we were to move, the hubby (also in tech) would likely be able to get a higher paying job fairly quickly in the Bay Area as well. All told, we would probably be able to increase our income by about 35%.

But: Nerdwallet says cost of living is 85% higher around San Francisco than it is in Austin. At least 10% of that income would now have to go to state income taxes, which we don't currently have in Austin. And b/c real estate out there is ridic, we'd become renters instead of owners (probably hanging on to the existing house in Austin as a rental property, but still.) And whenever we *are* able to retire, in 4-8 years, we'd be looking at a self-funded move back to a lower COL area, whereas if we retire in Austin, we'd likely just stay put.

Is there any scenario where it makes sense financially to make the move and take the new job? I'm thinking no, but I'm a little starstruck by the "target salary" they're discussing. Would love other opinions/analysis.

[inline five]

First I would wait to see if you get the job. Then if seriously considering it, bounce an offer off your current employer, you never know want they may offer.

Second it can make sense also to take a higher paying job albeit temporarily because you come across as a stronger candidate in the future for other jobs.

Third if the numbers work and you can put away more money despite the increase in costs it might be worthwhile.

My wife's company is based in San Jose. If she were to transfer there she'd get a 30% bump. What a lot of people do is transfer there and then transfer back to a lower COL location a few years later but negotiatiate to keep their higher pay when they do so.

[LWYRUP]

Is the job more interesting?  Or would it be more stressful?

Do you have lots of family and friends in Austin?

[wageslave23]

For what it's worth, two different people, not mustachians, have told me that a family cannot survive in San Francisco on $200k.  One was offered a 30% raise and turned it down. The other lives there on a HUGE salary and said his mortgage 3-4x the rent he was paying for a similar house in not cheap suburb of Chicago.  So I would it needs to be almost double an Austin salary to be worth it.

[LWYRUP]

Generally the kids vs. no kids distinction is crucial.  Without kids you can cram into a studio apartment or rent an RV or whatever.   With kids that's all much less palatable. 

[ysette9]

I think that if you are talking about a dual-career tech family that the Bay Area is a great place to be. I say that as one half of a dual-career tech couple. Yes, housing is expensive but the career opportunities and salaries can’t be beaten. Don’t buy a house; that doesn’t make any sense. Find a small-ish place to rent and sock away a ton of money. Keep your place in Austin and rent it out as someone else suggested so you don’t lose a toe in that market, of housing prices do go up there as I have read.

The Bay Area is a fantastic place to live and would be a great career move, for experience and increasing hour income. A friend of mine came here for a year from Denver and it proved to be a nice salary bump and have her more experience.

If you can do housing correctly you can save in other ways and invest the difference. You don’t need to pay an arm and a leg to cool a house, for example. Produce is often cheaper because it is all grown in CA. Entertainment options are vast and free if you enjoy the outdoors, and who doesn’t enjoy the outdoors when the weather is some version of perfect year-round?

Good luck!

[cchrissyy]

you are only 4-8 years to FIRE as it is.   If you like your job, stay put.  but if you like the adventure or the change of scenery, I think it's an excellent idea to come to California and turn that into oh, 2-4 years instead. I especially say that because there are 2 of you who would both earn so much more.   Keep your house so you can come back to it, rent something in CA, and finish out your career by socking away the extra money and retiring sooner.

[Tabaxus]

As much as I would love to live somewhere with perfect weather, COL in the San Fran area is just unfathomable to me (and I'm a biglaw attorney, so I'm right up there with the tech kind of salary, though spouse is not).  You will end up vastly behind, I think, taking a 35% pay increase to move from Austin to San Fran, and that's assuming you MASSIVELY downgrade your living situation (which may or may not be ok for you--kids vs no kids matters a lot to this I imagine).  Your commute is also likely to become longer, though maybe not worse.

Only you can make this call but this seems tough.

[JLee]

I would probably not make that move unless I wanted to for the job.

I left a LCOL area (Phoenix) for HCOL (northern New Jersey), but it was a 60% bump (85% bump if you factor in my first full year with bonus included) and also a job that presented a huge opportunity that I was unlikely to find anywhere else.

[NorCal]

I live in the Bay Area, and I wouldn't do it. 

The details matter for a more specific recommendation.  If you were in your early twenties and planning to live with roommates, I would say go for it.  If you're looking for a single family home and a place for kids to go to school, run away as fast as you can.

[MonkeyJenga]

If you get the offer, run the numbers of moving vs staying. How many years to FIRE in SF, how many years to FIRE in TX? Get some sample expense data based off of rental ads. If you don't have a lot of stuff, paying to move back to Austin won't be a big deal.

Try to get more out of your current employer if you get the offer. And try to get more out of the recruiter.

I spent my career in NYC, and it was completely worth it. I got to six figures fairly quickly without a degree, and I kept my expenses reasonable. The last year there was cheaper than I can probably do in any other city, actually. SF is harder to find deals that are accessible to public transit, though, and if you're "only" getting a 35% increase, it may not be worth it. Without knowing your current salary, I can't say.

[chasesfish]

Let me add a few things in here, give you my story, and throw a few more things in to consider:

You have to decide if the move is for your career.  Is this something that you want to do?  Will you regret not pursing the opportunity later? 

Does the excitement of trying the Bay Area appeal to you?  Austin is awesome, so is the Bay Area, but very different?

Will the network you create lead to some interesting consulting/hobby work once you've fully funded what you are looking at?

Is the company solid and do they have a SERP? (Supplemental Executive Retirement Plan, a private version of a 457).   This can dramatically offset the higher cost/taxes if used right.  I have one in my higher level role and defer 42% of my salary pre-tax.  Its paid out over 15 years monthly once I lead.  I've socked away a bit of money in there and its an awesome way to fund early retirement.

Quick story:

My wife and I were 3-5 years out from FI and both working full time.  We had hit ceilings in our current career, but were in a pretty low cost of living situation (minus taxes) in a low cost suburb of Atlanta.   I had an opportunity to move and breakthrough the corporate ceiling I was at and my wife was frustrated with her job and used the opportunity to retire.   We now live in-town in Dallas, TX, some good and some bad on the cost.  4 years later, it was actually a double move, turn around one office then move again.  I now run a decent size team and accomplished a lot professionally. 

I still couldn't tell you whether or not we'd do it again.  I'm thrilled about the experience/connections I made, I fulfilled a lot of "personal ego" about being starstruck on the position, and it continues to appeal to my ego that they would want me to do something higher up.  Personally its been tough, especially with a medical issue that came up for my spouse.

That being said:

- I thought this might be a financial decision, it wasn't.  Moving is expensive, higher COL livings really are higher COL, especially since you'd be going to a state with hidden taxes everywhere and an area with crazy rent inflation.

- You are already protected from the biggest rising cost in Austin and every good size city in Texas, housing inflation.  I agree with your decision not to sell the house.

- This must be a career/location decision.  I understand the appeal of doing status quo vs doing something else, especially in those last couple years where market returns begin mattering a lot more than how much you put in.

Good luck in your decision

[sarahbeth918]

Thanks for all the great comments here.

This was just what I needed to turn away from the sticker shock & ego boost of the potential salary and remember that we should be optimizing for happiness, not for money. I'm happy where I am now, and on a stable, low-risk path to be even happier in a few years when we FIRE.

If I was to take the job in the Bay Area, I may or may not like the new job, may or may not like the new team, would likely be injecting a lot more stress into my work situation (at least until I was established in the new job), may or may not enjoy living in NorCal, would definitely be further away from family, and may or may not be able to continue to put away money at the very high rate at which we are now, potentially impacting our eventual FIRE date. That's a whole lot of potential risk to happiness that I'm not willing to take right now when overall, we're already quite happy.

Thanks for the help in sorting that out!