What high income really means in the Bay Area?

We all know the Bay Area provides a decent income for most people working in Tech or support tech. So let’s look at an illustrative breakdown of how much take home pay tech workers will get. Do they actually manage to save enough money ?

We will do an analysis on those making $100,000, $150,000, and $200,000. Let’s assume it is for a single filer. There is also a maximum contribution to 401K of $19,000. The single flier is living in San Francisco CA. Living a frugal ordinary life with out crazy spending patterns.

Let’s assume we are trying to determine how much money you can save after 5 years (with an average interest rate of 3%).

Medium rent in San Francisco is $1,880. Typical grocery/food for the budget conscious is about $500 a month. Transportation (Parking, Transit, Ride-Share) is about $400 approx. Entertainment $500 a month approx.*

Total Cost of living is approximately $3280 per month or $39,360 per year

*https://smartasset.com/mortgage/what-is-the-cost-of-living-in-san-francisco

For an income of $100,000:

Take home pay $58,076 per year

Total cost of living $39,360 per year

Net Savings $18,716 per year (or $359 per week)

(SAVING 32% of their take home pay)

After 5 years, you will save $99,365.79 @3% compounding interest

For an income of $150,000:

Take home pay $88,969 per year

Total cost of living $39,360 per year

Net Savings $49,609 per year (or $954 per week)

(SAVING 56% of their take home pay)

After 5 years, you will save $263,380.92 @3% compounding interest

For an income of $200,000:

Take home pay $120,948 per year

Total cost of living $39,360 per year

Net Savings $81,588 per year (or $1,569 per week)

(SAVING 67% of their take home pay)

After 5 years, you will save $433,161.77 @3% compounding interest

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