Most lucrative area of Software Engineering

[Anonymous]

[quote=AN][quote=deadzone]Once again, I’m asking if anybody here currently makes 175K base salary for a corporate engineering position in a purely technical role (i.e. no management or supervisory responsibility).

I’m not suggesting this is impossible, but I do believe that is an uncommonly high salary for San Diego at least. I would be interested in a tangible example of this if there is anybody on this board. I do not need to see your pay stub, I will believe you.[/quote]
No one will tell you how much they’re getting paid. But I did give you plenty of data points.[/quote]

Why not? If I made 175K I would be proud of it. If we can find an actual real person on this board who makes that salary, they can call BS on FLUs flawed take home pay calculation.

Your data points aren’t tangible examples so of no value to my specific question.

[plm]

with 175K salary, maxed out 401K and no ESPP or flex spending, that first 8K/mo number is the right number. I want to clarify though that its not me making the 175K salary.

[Coronita]

[quote=plm]with 175K salary, maxed out 401K and no ESPP or flex spending, that first 8K/mo number is the right number. I want to clarify though that its not me making the 175K salary.[/quote]

Ok. Without ESPP and flex spending, and with a pre-tax traditional 401k (not Roth 401k that is after tax)then yes, that’s probably close to it. Again I want to clarify, hypothetically of course.

[an]

[quote=deadzone]Why not? If I made 175K I would be proud of it. If we can find an actual real person on this board who makes that salary, they can call BS on FLUs flawed take home pay calculation.

Your data points aren’t tangible examples so of no value to my specific question.[/quote]Not everyone is like you.

Why would my data points aren’t tangible? It’s a direct answer to your question. Some people would be will to state their pay when it’s anonymous. Which is exactly what my data show. Why does it matter if one of the people here is making that much and be strictly technical?

[kev374]

[quote=bobby]
1.she’s a daughter of the CEO, COO, VP, managing director (it’s not what you know, it’s who you know)
2. she’s a superstar and they want to recruit her (ie your assessment of her is wrong)
3. your skill is just a little more than hers, hence your slightly higher pay (see first line of my post)
4. you don’t know how to negotiate your salary despite being a much superior coder
[/quote]

#1 is wrong, she is not
#2 is wrong, she eventually got laid off because she was so bad and the manager could not take it anymore
#3 is wrong because I know people in my field at my level who actually make less than me
#4 is wrong because of #3, I am making more than a lot of my peers and am at least in the 75-80th percentile of the pay for my position.

I am not saying I am not compensated according to the market, what I am saying is that the MARKET itself does not pay according to the difficulty level of the job compared to other jobs I know that need less expertise and pay more.

[an]

[quote=kev374]I am not saying I am not compensated according to the market, what I am saying is that the MARKET itself does not pay according to the difficulty level of the job compared to other jobs I know that need less expertise and pay more.[/quote]It’s not about difficulty of the job. It’s purely about supply and demand.

[Coronita]

.

[svelte]

[quote=AN]
It’s not about difficulty of the job. It’s purely about supply and demand.[/quote]

That’s exactly right.

I was going to post: there are a few SW specialties in SD that can get $175K, but those salaries are due to there not being enough skilled people to meet demand.

So what motivation – at all! – do those people have to get on a public forum and crow about their sweet spot? That would encourage people to transition to that niche and drive down their salary!

Also…slicing it by technical skill is fine, but I think there is more of a salary variation in general by slicing it another way: by industry.

[Coronita]

[quote=deadzone]FLU, your math is way off if you think W2 take home pay is only $5500/month on 175K salary. I think you are off by a factor of two. Take home pay every 2-week pay period would be about that.

And anyone with that take home pay would be able to lead a VERY nice lifestyle.[/quote]

Ok, enough, ok….

Here’s is a hypothetical paystub from a few years ago. It’s hypothetical because it’s not necessarily mine. It could be a cousin’s, spouse, relative, etc. In any case, it’s outdated and a few years old. The paystub is a march paystub. And it’s outdated, so wouldn’t even reflect current market conditions, whatever that may be (less or more).

[img_assist|nid=25643|title=shit|desc=|link=node|align=left| width=400]

The point of this is illustrate, that as I mentioned, taking all the deductions (some of which is in your benefit), the net pay per period is *not* a license to live a life of luxury, at least not for the first 6-8 months.

For the time being, ignore the shitty cash bonus and restricted stock.(Obviously, this didn’t come from Intuit, and that company had a bad year that year, in which everyone’s bonus and stock grants were in the toilet). Although the base a few years ago is $6k short of your magically $175k (take regular rate of 80 hours * 26 pay periods per year), again this is a few years back, and you can extropolate what it would be in present day with annual increases and additional years of experience, even if you want to go as low as a 2% per annual increase which would be insulting at best.

Anyway,
*$1900/pay period goes to fed/state/medicare taxes and sdi.
* ALSO, keep in mind this is what happens when you claim “5” as your fed/state exemptions, which you can only do if you dependents and itemized deductions like am mortgage. Otherwise, you’re most likely claiming 1 or 2, which would most likely increase your tax bill to around $2100
*$60 goes to medical insurance, which is low (company has a decent health plan for PPO family coverage.) This is usually a lot more elsewhere.

The rest of the deductions again are for your benefits, but most of which you can’t do anything with for a long long time.
$180 for flex spending/depedent care (pre tax)
$715 is pre-tax 401k..Can’t touch it to 65….
$455 is roth 401k that is AFTER tax. Can’t touch it to 65….
$975 is towards ESPP which you can’t touch for 6 months, and even if you sell before 2 years, that’s taxed at ordinary income, not capital gains tax rate.

That leaves about $2200/period, or $4400/month for the first 6 months (yes, june july has 3 pay periods).

Now let’s just say someone does make $175k. And let’s say that $6k difference from this pay stub is completely tax free. That would put an additional $500/month on the person’s pocket (and clearly not all of that would be tax free). So you’re looking at $5000/month, and I’m adding an additional $500/month for padding…

So it would come out to be about $5500/month for the first half of the year, until you maxed out on your 401k’s, you hit the SDI tax limit, and medicare tax limit (which BTW went up starting in 2014), and you pick up the two extra pay periods in june and july.

Now with that, subtract $3000/month for mortgage+proptax+insurance or for some of you folks that insist on renting in Carmel V $4000/month. If you do the former, at least you get a tax writeoff, the latter you’re pretty much screwed in that none of it can be written off. No renter credit for your income level. That will leave you roughly $2000-2500/month, half of which you raise your family with, and the other half that goes toward the Porsche 911s car payment….HA HA, NOT, are you insane?…

So anyway, I hardly consider this living a life of luxury and a license to spend spend spend. This isn’t wealthy. This is middle class. This is what a W2 income looks like, and I’d be curious how it would stack up to say an attorney or doctor with equivalent number of years of experience. Not only would I suspect the gross income to be different, but the net income to be different, as many such doctors/attorneys/dentists aren’t on W2’s.

This is why I don’t understand why many of you are still so fixated on trying to figure out how to increase your W2 in the absence of any interest in the in-demand areas that would give you that marginal increase after taxes. Unless you are passionate about what you will be doing, you’ll be average at best and there will be someone that will be much more passionate than you about it that will most likely end up doing a much better job than you. And it changes. There are good years, there are bad years, and it averages out over time. Stick with what you are passionate about, and if it happens to not be in demand, you either find something you are passionate about that is in demand, or you stick with what you have, and if money is still a concern you spend your time saving your existing W2 AND putting it to use in more tax efficient ways to earn additional income, some of which you’ll fail trying, and some of which you will do ok. This is what Informercial “Rich Dad Poor Dad” has been trying to tell people: W2 income is the worst way to accumulate wealth relative to all the other ways that are much more tax efficient (although I think that guy is a fraud that just tries to sell his infomercials without telling people “how”, the basic premise of his message is pretty spot on).

This is also why I don’t understand why so many of you in the past have said that you would like to see an increase in capital gains taxes and dividend income, and that it should be taxed the same as sweat income. You basically want the government reduce/take away incentives that you can take advantage to help you secure your financial future without requiring you to put much labor in when you are old, sick, tired, whatever. Look at your W2 again. You don’t see a “pension” that is guaranteed for life like some get in the past do you? You don’t see a “guarantee” return as you do for some of the public pension plans do you? So basically you expect to continue to work indefinitely?

Anyway, I wish I learned that a decade ago. I wouldn’t nearly have spent as much time about my W2 as I would have on empire building passive income.

And yes, I brown bag my lunch every day. Because I have to watch how I spend.

[ltsddd]

flu,
wouldn’t you agree, though, that the bigger salary help facilitate your getting out of the rat race at a much younger age than a typical 9-5 salaryman?

[svelte]

[quote=flu]
So anyway, I hardly consider this living a life of luxury and a license to spend spend spend. This isn’t wealthy. This is middle class. This is what a W2 income looks like…
[/quote]

And if you’re married with a working spouse, it is only half the home’s income.

So now you need to double those numbers.

I know many, many professional couples living very comfortably.

[Coronita]

[quote=ltsdd]flu,
wouldn’t you agree, though, that the bigger salary help facilitate your getting out of the rat race at a much younger age than a typical 9-5 salaryman?[/quote]

It depends. It depends on how big a difference and how many hours extra you need to put in to get there. $21k gross pay difference is really like $13-15k after taxes, depending on what bracket you are in. The question is, how many hours/time are you going to have to dedicate to accomplish that. Will you have to be on the road all the time, away from family, stay late from work?

$13-15k difference over 10 years is $130-$150k extra person X would have over person Y. I hardly consider that a huge “advantage”. In fact, if I was making $21k less than my peer, I would be trying my darnest to squeeze every penny out of my $21k less salary to make it work for me, while the guy that makes $21k is probably spending most of his extra salary on useless crap. In the end, I wouldn’t be surprised if I come out ahead because I had more financial discipline than the guy that made $21k more. I think reality is that in many cases, people who make more end up feeling they are richer and end up spending more than they actually bring in. Oh sure, I make more salary now, I don’t need to worry about saving as much….I can afford switching cars every year or two… I can afford going on that nice vacation every year…. Either that, or I would have taken life’s pleasures in stages based on what is obtainable at this time. You don’t see me living in a $1.3+million home “starter home”, do you?

[Coronita]

[quote=svelte][quote=flu]
So anyway, I hardly consider this living a life of luxury and a license to spend spend spend. This isn’t wealthy. This is middle class. This is what a W2 income looks like…
[/quote]

And if you’re married with a working spouse, it is only half the home’s income.

So now you need to double those numbers.

I know many, many professional couples living very comfortably.[/quote]

True. double incomes, have it much better purely from a financial aspect. But then we’re talking about household incomes, not individuals. Don’t get me wrong. I’m not complaining. I’m just saying, this isn’t “rolling in the dough”….

[exsdgal]

[quote=flu]
Lol How the are you even doing that? [/quote]

flu, you caught me! The correct response should have been 6-8K a month. Towards the end of the year the take home is about 4K/pay, and next month it will be roughly 3K. For the first time this year the 401k was not fully maxed out, to increase take home for other activities. What is ESPP? 🙂 No such luxuries here.

Like I mentioned earlier it is good on paper, but for day to day expenses it is not much. I will be happy to have a 1K monthly expenses, and most months if I don’t watch out the cc bills land almost double. In my situation the deductions are roughly 50% of the salary. One could argue this 50% deduction includes the 401k contributions, which is theoretically mine. However I don’t get to use it when I need it, and also will pay tax on the distributions. (Yeah I can hear some say why not Roth401k – again not everyone gets these options)

The first job after graduation in the 90’s was at 37K in SD, writing about it makes me pause how much things have changed. The pay today may not necessarily be far fetched when adjusted for inflation. (I am sure there is an app for that!) Besides the inflation adjusted pay, I also attribute some of the career success to timing. Being some place at the right time, and jumping at opportunities with eyes closed. I guess youth offered some such luxuries. I don’t believe I was ever at the highest pay scale in any company, but over time definitely moved to the middle of the pack.

Things are a bit different now being a single W2 family. But even with a dual W2 in the past I did not feel rich enough to afford some of the things in San Diego especially housing. I remember when the Bel Etage/Savannah developments were released, I could not compute how it was possible for anyone to maintain the monthly expenses. Thinking back those homes were a steal at 500-800. Eventually moved to a <1500 sqft house inland and happy with the decisions made so far.

IMO moving forward the job market will be different with lot of non-W2 earners, folks starting businesses, young graduates creating their own businesses and not following the traditional 9-5 jobs. I think the current generation values their mobility and sense of presence higher than conforming to tradition. Over the years they will create their own ecosystem to thrive, and define their destiny. Combined with burgeoning global economy I except many from this next generation to blur the borders and start/build global small scale eco-friendly companies. It may not be far fetched when other countries begin to 'complain' about the Americans taking up prized RE in their home country 🙂

[exsdgal]

Okay I see I should have read the entire thread before my previous response 🙂

Just for completeness, my hypothetical pay stub will look similar minus some of the benefits and healthcare deductions.

deadzone, if you don’t mind would like to learn about your industry and pay structure.

svelte, I agree about the pay being dictated by the industry.

[Author]

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