[CompelTechnic]

How much have you been saving using your fat salary? If you've been making an average of 150k and saving aggresively over the last few years, you could easily have $500,000 saved up. Invested in dividend stocks, using 4% withdrawal rule, boosts your apparent income by $20,000.

If you want to feel safer, save more cash until you switch to do whatever you want to do. Some people find that no matter how much they save up, they never feel comfortable- don't fall into that trap. Know the real risk here- the risk of not doing what you want to do in life, because you need a "safety blanket" job.

[moocow01]

at 150k approximately half your income is going to go out to taxes through federal/state/sales/etc/etc.

so now with 75k you've got to pay for living expenses (taxes already removed) and lets be very generous and only take out 25k for that stuff. (~1k for rent, ~1k for food and everything else)

So even with saving 50k its going to take you 10 years to get to 500k and perhaps only 7 if you invest wisely.

Anyways sorry to be picky but 500k is not easily saved up on such a large salary.

[crpatino]

On the other hand, you can take a 20% to your base salary, but your standard of living will only decrease by what? 10%?

(I am aware that the math does not pan out that way, but the fact remains that if you have confiscatory levels of taxes at the higher brackets, the cost of marginal (negative) increase in your base salary ends up working in your favor)

[smartician]

I think you're confusing marginal tax rate with effective rate. As a single person in California making $150k p.a., your take-home pay is about $95k per year, or $7,900 per month.

[moocow01]

Your right thats its a fuzzy calculation but I usually just consider that half of income goes to taxes one way or another...

~35% goes out to your standard/official taxes

then you pay ~8% of whatever you spend to cover sales tax

then you pay ~2% of whatever your home is worth for property taxes (renters don't see this as tax but its built into the monthly payment)

and then there are lots of other smaller things like the car registration fees, bridge tolls (that may be a more of a bay area thing).

Anyhow its not exact but the way I budget is that 50% of my income is for actual spending/saving and have found that that ends up being about right

[smartician]

It doesn't really make sense to me to factor things out like that. Sales tax on groceries should be accounted for in the groceries budget. Property tax is part of your housing budget. Car registration fees and bridge tolls add to your transportation budget. Income taxes are different because they determine how much you're actually being paid each month.

[Frazmatic]

If you're paying 1k for food & everything else; that 1k is definitely including sales tax. And 8% of what you spend is definitely not 8% of your total income if you're saving as much as possible. You're double counting taxes.

I only make $50k and I'm saving $30k a year. I'm fairly sure if I quadrupled my income I could at least double my savings.

[wan23]

$500,000 sounds like a lot. That's like as if he had saved half his take home for ten years while living in one of the high cost of living places that tend to employ finance people at that level.