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Comment by loumf | Hacker News Reader

For savings, the only thing that matters is the delta between expenses and income. I live in rural Massachusetts and had no problem maxing 401k for 20 years. I used to live in NYC and the delta is way higher here even though the raw salary was higher in NYC.

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I'll copy/pasta my response to someone else who made a similar response:

Let's say in SF you get $150k and put 10% away with a 5% match. That's $22,500 per year you're socking away into your 401k. If you live in Orlando and you're making $90k/yr and put 10% away with a 5% match that's $13,500, a net loss of $9k every year in early retirement savings. After compound growth over 40 years of maturity that's going to be a TON of cash. As long as you don't plan on RETIRING in SF, you're much better off working there.

You're talking past each other. The point is that in other places you can save a larger fraction of your income such that you're actually saving more money in dollar terms living in rural MA than living in SF. SF is hilariously expensive compared to any other major city in North America.

Why base your saving % on your salary? Again, delta is all that matters.

From my experience, that delta is higher in low expense areas. The assumption I'm making is that the typical HN'er is a top performer who can demand top percentile salary in any market, or work remotely.

The hack I recommend is getting SF salary in low-cost area.

However, I am quite certain I save considerably more than $9K each year by not living in SF, so I'd still be better off with the $90K income.

No, because in his scenario, in SF you just made $54,000 more before taxes and after 401K contributions. I have no clue what Florida tax rates are, but there is no way that after taxes that is not at least $27k more earned in SF.

Florida has no state income tax for individuals. http://www.stateofflorida.com/Portal/DesktopDefault.aspx?tab... https://en.wikipedia.org/wiki/State_income_tax#States_with_n...

It is only correct if the random SF and Florida salaries are correct.

I work in rural MA and make considerably more than the given SF salary (non-remote). The SF salary is probably better on average (the 50 percentile), but I stand by my statement that top performers can command SF salaries in any market. Even if you can't find something local, there are a ton of remote options.

That's a big if. Why would you not max out your contribution?

What you said makes sense to me on its own, but there's more to it than that. If your cost of living is much lower in Orlando, perhaps you can save 20% of your $90k income instead of 10% of the $150k income.

I really enjoy owning a house. I wouldn't be able to afford it in SF. I bought a nice 3/2 in Orlando for only $110k a couple years ago. My dog loves it too. :) So there's also that.

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