Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

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Dukethegator
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Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by Dukethegator » Tue Apr 02, 2019 8:10 pm

A combination of a possible job offer and a death in the family has left me at a major crossroads: do I leave a safe job (in a college town/state capital in a metro area of 360k) or take a job that doubles my income in a high tax area (Chicago). I believe if they offer, I am inclined to take the job, but I am afraid there is some flaw in my analysis. Any help from fellow boggleheads would be greatly appreciated.

Current:
Age 34, wife 33.
Income: 113,000 (71k+42k) (I am maxing out 403b, she will start soon)
Retirement: 140k (78k me, 65k in hers) in Roth IRA, 58k in 403(b) (all me).
Assets outside of retirement: 124k.
No debt whatsoever.
No plan to have children.
No plans to inherit money but decent odds of anywhere between 500k-1.5m in next 15 years.

Choice A: Stay put
My job is near my max earning -- I could probably jump to around 84/85k in the next year but then all salary increases are at the mercy of a legislature that has been unwilling to pay state workers. Wife will probably just be chronically underemployed. Not much professional satisfaction but we have a good group of friends and family is nearby. Jobs are very low stress.

We can buy the townhouse we were maintaining for relative who just passed away for around 100k. With around 20-30k in renovations it would be worth 160-170k in a highly desirable part of town. HOA is around $60/month. Property taxes are low. Commutes are 7 minutes and 10 minutes.

I am a year away from vesting w/ the pension, she is three years. If we stayed here for our careers (22 and 25 years), our pensions would probably be 85-100k combined. If we leave, we keep nothing.

Choice B: Move
Job would pay 145k and would be in a completely different area of my profession. Limited upward mobility for a few years. Wife believes her underemployment would end, but even assuming she finds a job making just 50k we’re at 200k. She is probably right because what she does within state government is very much in demand in the private sector. She would love easy access to two international airports and the energy of a large city. Rent where we'd be living would be anywhere from 2.5-3k a month.

Commute would be 20-30 minutes for me, unknown for her. City has great mass transit.

I used the Smartasset paycheck (I realize it's not 100% accurate) to ballpark take home pay after housing, retirement, and insurance costs for both choices at a variety of income levels.

Image

Current thoughts
While I am risk averse (graduating into the Great Recession messes up your tolerances) I am not sure if it is at all risky to take the high COL choice. Worse, if I don't go, I am afraid I will always ask myself "what if" I had taken it. I think financially we are probably fine regardless as we may be oversaving. The only major risk I see is that if I were to somehow lose my job the housing costs would quickly make it catastrophic.

Any thoughts?

Thanks,
Duke

btenny
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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by btenny » Tue Apr 02, 2019 8:28 pm

Some questions?

1... Do you have family like your parents or her parents or other relatives in your current location? Who and how far and how old are they?

2... Will either of you be able to take early retirement from your current jobs at say 20 years if you stay? This is really a pension and move question if you retire at 45. Is this possible?

If both these answers are no, then I suggest you move. If yes is the answer to either question then moving is more difficult and depends on many factors beyond money.

Please advise and Good Luck. .

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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by Strayshot » Tue Apr 02, 2019 8:37 pm

Low stress jobs with pensions in a location close to friends and family with short commutes and an ability to buy property for cheap. Sounds wonderful!

If it were me, I would go for the 15% raise in the next year to 84k and find some way to decrease spouse underemployment. If it is a college town, can spouse pursue a degree / an additional degree to increase prospects? If no kids, the time is probably available to take a class or two every semester easily.

But that is just me looking from the bird-in-hand perspective. That and you couldn’t pay me enough to live in Chicago........

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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by Bob Sacamano » Tue Apr 02, 2019 8:39 pm

i am in a situation not dissimilar to yours. i say go for it for the "what if" factor alone.

if my wife was more on board with my desire to move i'd be gone yesterday.

good luck.

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Dukethegator
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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by Dukethegator » Tue Apr 02, 2019 8:44 pm

Thanks Bob. Your first question nails it.

1) Both sets of parents are here. She can't wait to get away from hers, but I am close to mine. Hers are in their 60s, mine are in their 70s. My sister and I plan to alternate so someone is visiting them every 3 months to ensure they are okay. We are also close to several of their friends who are younger and will give us a heads up if anything is amiss. I have been controlling their finances for about a decade so if anything weird starts there I will quickly discover it.

2) Not really an option because the type of Chicago job I am looking at is very rare in my profession. It's now or never.

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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by petulant » Tue Apr 02, 2019 8:45 pm

Financially it is not a great idea to move to Chicago. Yes, in the best case scenario it looks like you'll have a hair more take home pay if your wife finds a good job, but it will be subject to considerably more risk, and you're subject to rent going up over time--compared to buying a home with stable income etc. in your current city.

This is not a financial decision, it's a lifestyle decision. The reality is, if you all aren't happy where you are, a move to Chicago might be a new source of excitement and fulfillment due to more job opportunities, fun things in the city, etc. The numbers say you won't be especially worse off if you do it. But the numbers are not actually telling you to do it.

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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by bhsince87 » Tue Apr 02, 2019 8:46 pm

Are you currently living in Illinois, with your pension(s) tied into the state system?

And how far away would the Chicago job be from friends and family?
Retirement: When you reach a point where you have enough. Or when you've had enough.

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Dukethegator
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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by Dukethegator » Tue Apr 02, 2019 8:47 pm

Strayshot wrote:
Tue Apr 02, 2019 8:37 pm
Low stress jobs with pensions in a location close to friends and family with short commutes and an ability to buy property for cheap. Sounds wonderful!
That is sort of how I have always seen it as I have set up everything here. We're a five minute walk from three different parks for our dog. But wife has decided her self actualization needs to come from work, so I am in this bind.

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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by HEDGEFUNDIE » Tue Apr 02, 2019 8:48 pm

petulant wrote:
Tue Apr 02, 2019 8:45 pm
Financially it is not a great idea to move to Chicago.
Would love to see the math for how $200k in Chicago leaves the OP worse off than $113k in Columbus, OH (my guess).

So many of these cost-of-living threads contain bad math. Let’s try to do better with this one.

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Dukethegator
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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by Dukethegator » Tue Apr 02, 2019 8:50 pm

bhsince87: Other than professional school friends I know nobody in Chicago. I am in a low COL southern state with no state income tax. Pensions are secure here.

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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by bhsince87 » Tue Apr 02, 2019 8:56 pm

Dukethegator wrote:
Tue Apr 02, 2019 8:50 pm
bhsince87: Other than professional school friends I know nobody in Chicago. I am in a low COL southern state with no state income tax. Pensions are secure here.
Wow, IMO, that changes things! Sounds like a major change in lifestyle AND security.

I assume you and your spouse also have been to Chicago in the winter, too......
Retirement: When you reach a point where you have enough. Or when you've had enough.

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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by pdavi21 » Tue Apr 02, 2019 8:57 pm

Do what is best for your career. You are young enough that that will have the highest payout.
"We spend a great deal of time studying history, which, let's face it, is mostly the history of stupidity." -Stephen Hawking

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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by ClevrChico » Tue Apr 02, 2019 9:45 pm

I have a colleague that made a similar move. When I talk to them, they complain that they can't enjoy much of the city due to traffic and parking. Talk about a grind. Maybe spend a couple long weekends in Chicago to see what you think of the area?

I certainly would not put myself through such an uprooting for an extra $13k/year net. (If I'm reading that right.) Your life now sounds close to ideal.

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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by leeks » Tue Apr 02, 2019 9:55 pm

Given that you can clearly afford a decent lifestyle in either location, if you both feel like trying out a big city, I say make the move. Pursue the life you want to live and organize your finances to make it work (rather than organizing your life just to maximize finances).

I'm in NYC and would *strongly* prefer to move back to VA (or NC) where we are from but I haven't won that argument with my husband yet. But I'm still glad that, more than a decade ago when we were planning to move in together and said let's try living in NYC, that we did it. We had no jobs lined up and no substantial savings, but we took the leap. I would do it again even though now I'm regularly scheming about how to get us out of the Northeast as soon as possible.

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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by e5116 » Tue Apr 02, 2019 10:01 pm

To be fair, one could live in Chicago relatively cheaply if you choose. Housing doesn't have to be $2.5-$3k - that's probably a nice two BR in a desirable neighborhood (Lakeview, Lincoln Park, River North, Bucktown, Wicker Park, etc.) If you want to make the math more favorable and make the decision easier, you could find a large one BR or a two BR is places like Ukrainian Village, Uptown, Rogers Park, Albany Park, etc. (And those areas are still relatively nice). It's not truly a HCOL location although property and sales taxes are high. It's no NY, Boston, LA, SF, DC, Seattle, etc. as far as housing is concerned. More like MCOL. Of course, it's a personal decision and I think if you make the plunge living in a location you'd want to be is likely worth it, but just giving additional context.

It sounds like taking the new job is what you want to do with your gut but it's much riskier so you want outside confirmation it's a reasonable decision. I say go for it! $200k is a significant pay increase and you'll always ask yourself what if. AND you wife wants to do it? Win win. Life is for living -- taking risks while relatively young is worth it. And Chicago is a great city - tons of culture, entertainment, and events. Yes it's cold in the winter though....

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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by mlipps » Tue Apr 02, 2019 10:05 pm

+1 to what e5116 said. I didn't even realize it was possible to pay $3k in rent in Chicago unless you have kids and need 3+ bedrooms. Also, keep in mind you can definitely get by with 1 car very easily. It seems like a no brainer to me based on a quick read of your post. Feel free to PM with any Chicago specific q's. If you're a Reddit user, there's a fairly active community there as well.

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Dukethegator
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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by Dukethegator » Tue Apr 02, 2019 10:18 pm

ClevrChico: The upward salary potential in Chicago is much greater than where we currently are. But yes, depending on Chicago rent the net is probably between 15-25k once she finds a job. We have spent several weeks in Chicago (March and in July). I spent several weeks in Chicago in November. The net value of Chicago would be 10k or less, initially, if I were to compare it to my current situation if I obtained the 85k position.

Leeks: I think that is how she sees it. We're currently two hours from an airport that has a direct flight to anywhere other than Atlanta. I would have stayed in Durham if the recession hadn't hit so I see why you would want to move back to NC.

e5116+mlipps: I was pricing out 2 bedrooms around Ukrainian Village, Little Italy, and Pilsen, but I was aproxamating based on Hotpads and Zillow.

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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by ohai » Tue Apr 02, 2019 10:24 pm

Usually, I lean towards the high pay/high cost option. First, I'm not sure what your fields is, but in law/finance/business/engineering or most things, the best talent tends to go to expensive places, and this environment helps you improve your skills. Second, it is usually possible to save more money, as you can cut down spending if you try, but you can't push up your salary easily. Third, again, I don't know your job, but where work is concerned, you can usually move from expensive place to cheap place more easily than the other way around; your "sticker" price will have gone up, and you will probably have become more skilled, as mentioned above.

Finally, you should consider if you like living in Chicago compared to where you currently are. Career is one thing, but you have to feel happy every day doing mundane stuff too.

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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by Dukethegator » Tue Apr 02, 2019 10:40 pm

ohai: It's in-house legal work that would make me very marketable in most major and midsized cities in the United States and I wouldn't need preexisting relationships or a book of business, which is rare in my profession.
Last edited by Dukethegator on Tue Apr 02, 2019 10:48 pm, edited 1 time in total.

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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by TheHouse7 » Tue Apr 02, 2019 10:43 pm

I would take the job in Chicago, We(32) make 84k and live on 50k. If someone offered me 168k to work in Chicago I would do it if it were less than 55 hours per week (including commute).

I don't think either choice is bad. Probably happier in Lcola!
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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by Sam1 » Wed Apr 03, 2019 5:12 am

Dukethegator wrote:
Tue Apr 02, 2019 10:40 pm
ohai: It's in-house legal work that would make me very marketable in most major and midsized cities in the United States and I wouldn't need preexisting relationships or a book of business, which is rare in my profession.
This sounds like a great opportunity. I’d go for it. It will open up doors in the future and your wages will increase at a much faster rate than they will in a LCOL area.

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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by Sam1 » Wed Apr 03, 2019 5:19 am

besides the job opportunity, the fact you don’t have kids is the determining factor.

Even in a very HCOL city, you can find a decent one bedroom to rent that doesn’t cost an arm or a leg.

Having kids is what makes a HCOL city hard. You suddenly require a lot more space, childcare costs are high, maybe you need better transportation to keep your kids safe, college savings, etc.

Unless you’re working a low paying job, you can absolutely manage living in a HCOL city if you watch your expenses and make sure to save.

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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by mlipps » Wed Apr 03, 2019 1:42 pm

Dukethegator wrote:
Tue Apr 02, 2019 10:18 pm


e5116+mlipps: I was pricing out 2 bedrooms around Ukrainian Village, Little Italy, and Pilsen, but I was aproxamating based on Hotpads and Zillow.
In those neighborhoods that's way too high. My best friend just signed a lease for a 2 bedroom in Pilsen for $1200. Granted, it's quite dated, but even the gut rehab units shouldn't be over $2k. Craigslist is still the most common source of apartments in Chicago.

I used to use the website rentometer.com when I was newer to the city. I just double checked my current apartment--their data seems pretty accurate to me still. Might be another source to check.

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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by Jack FFR1846 » Wed Apr 03, 2019 2:03 pm

3 years away from both of you being vested for pensions? As someone who has only a very small pension from a company I left long ago, I would absolutely stick it out until the pensions are locked. Then go look for similar offers. They will be out there.
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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by KyleAAA » Wed Apr 03, 2019 2:22 pm

Chicago is a fantastic city and I would classify it as more MCOL than HCOL. If you are city people, Chicago will improve your QOL just based on all the amenities. The food scene is great so expect to spend more eating out and doing stuff. It isn't just your rent that will go up. But $200k+ in Chicago is plenty.

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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by Anon64 » Wed Apr 03, 2019 5:17 pm

Make sure you consider taxes and COL. The pay jump just doesn’t seem big enough to me and it sounds like you currently have a great setup.

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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by petulant » Wed Apr 03, 2019 7:29 pm

HEDGEFUNDIE wrote:
Tue Apr 02, 2019 8:48 pm
petulant wrote:
Tue Apr 02, 2019 8:45 pm
Financially it is not a great idea to move to Chicago.
Would love to see the math for how $200k in Chicago leaves the OP worse off than $113k in Columbus, OH (my guess).

So many of these cost-of-living threads contain bad math. Let’s try to do better with this one.
Um, excuse me, but the full quote is below:
petulant wrote:Financially it is not a great idea to move to Chicago. Yes, in the best case scenario it looks like you'll have a hair more take home pay if your wife finds a good job, but it will be subject to considerably more risk, and you're subject to rent going up over time--compared to buying a home with stable income etc. in your current city.
$200K and $113K absolutely does not represent an apples-to-apples comparison. Please re-read OP's post--OP has a very good chance at a raise within state government that will move his family past 125K (see his chart). I take it this is a very likely outcome due to a career in state government there. The take home pay after housing expenses is $63,603.

In Chicago, OP may start with $140K, but after rent in the $2500-$3000 and other expenses, OP will have $50,029-$56,029 in take home pay. To actually beat current take home pay, OP's wife will have to get a job of at least $40K. The take home pay then "beats" the home town take home pay, but only by $1000 at the low end, which I submit will be consumed by other, higher expenses in the Chicago area, including the higher price of gasoline, possibly groceries (it depends), etc. If wife gets a $50K job, it's a bit more convincing that they'd have more money. But then you're talking about moving possibly hundreds of miles to maybe make a few thousand more in a year. Basically, there is significant risk that this won't turn out to be a great financial move--exactly what I said originally. If everything works out, they'll make a bit more money, but there is risk. Also, the rent will go up over time, whereas the current living situation may allow the purchase of a good house. Purchasing a good house in Chicago will cost significantly more than $100K.

I'm sorry I have to spell it out for you HEDGEFUNDIE. Also, please don't misleadingly quote me in the future.

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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by Dukethegator » Wed Apr 03, 2019 7:57 pm

petulant: I recongize the risk which is sort of what led me to post here. Nobody else I discuss this with sees it the same way, but I am a catastrophizer. Friends have pointed out that I could easily return to this market. I have a strong reputation.

All: I think the forum has broken down into two groups: those who think why risk a good thing vs those who are attracted to larger cities. In a lot of ways this has been my internal debate this entire time that many around me thought I was being ridiculous. Now there’s just a lot of soul searching.

Thanks everyone.

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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by mrspock » Wed Apr 03, 2019 8:34 pm

Dukethegator wrote:
Tue Apr 02, 2019 8:10 pm
A combination of a possible job offer and a death in the family has left me at a major crossroads: do I leave a safe job (in a college town/state capital in a metro area of 360k) or take a job that doubles my income in a high tax area (Chicago). I believe if they offer, I am inclined to take the job, but I am afraid there is some flaw in my analysis. Any help from fellow boggleheads would be greatly appreciated.
Move. I had a similar choice almost ten years ago to work for a pre-IPO “flash in the pan” company. Now I can retire at 40.... there was zero chance I could have done this staying where I grew up. Zero... nada. And yes, not everyone may be this fortunate, but some chance is better than zero chance IMO, and you will almost certainly be able to move back with way more money in your pocket if you play your cards right.

You are young, full of ambition and energy. Go find your maximum potential and live humble (well under your means... which may mean a smaller house/condo).

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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by zeal » Thu Apr 04, 2019 6:09 am

We live in a LCOL southern state too, lived here all our lives (I'm 30, wife is 26). I travel to big cities regularly for work and we might take a vacation to a big city a few times a year. They're nice for a change of scenery sometimes and I like to put myself in a local's shoes while I'm there to see what it'd be like... but after 2 or 3 days we're ready to come back home to the slower paced life and prettier landscape. It would take a big increase in income in order for us to consider this move, and in your scenario we wouldn't do it. We do plan on having kids though, and I've always wanted to raise them in a rural or at least suburban area so that may be part of our bias.

My 2 cents.

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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by goblue100 » Thu Apr 04, 2019 6:44 am

KyleAAA wrote:
Wed Apr 03, 2019 2:22 pm
Chicago is a fantastic city and I would classify it as more MCOL than HCOL. If you are city people, Chicago will improve your QOL just based on all the amenities. The food scene is great so expect to spend more eating out and doing stuff. It isn't just your rent that will go up. But $200k+ in Chicago is plenty.
I'll pass:
https://en.wikipedia.org/wiki/Crime_in_Chicago
Chicago's homicide rate had surpassed that of Los Angeles by 2010 (16.02 per 100,000), and was more than twice that of New York City (7.0 per 100,000) in the same year.[16] By the end of 2015, Chicago's homicide rate would rise to 18.6 per 100,000. By 2016, Chicago had recorded more homicides and shooting victims than New York City and Los Angeles combined
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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by Wricha » Thu Apr 04, 2019 6:45 am

The math does not work in my opinion to move. Nine times out of ten I would say roll dice your young, no kids etc. Does this new job afford you any upward mobility in the future? Reading between the lines people in your career generally don’t make the kind of money you would be receiving in Chicago. If that is true, you maybe leveling out in Chicago as your are in your current position. If that’s the case you are leaving $100k pension on the table worth $2.5M. You are never going to save that additional money in Chicago unless you get significant raises.
Chicago in winter vs NC in the winter you don’t need calculus for this one.The Windy City is not a cute name it is brutal in the winter and I like Chicago (for a visit).

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beyou
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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by beyou » Thu Apr 04, 2019 6:55 am

Tough choice. I made a leap to move back from a MCOL area to make and spend twice as much in my hometown NYC. Financially to me it made sense, some expenses are not so tied to locality (car purchase price does not vary by locality, though auto insurance sure does). You need to do the math, make a side by side budget of researched expenses in each location. Saving $ for future expenses if you come out ahead, like retirement, is potentially a benefit, was for me.

That sald, I visited Chicago last May, coldest place I have been in May, Cubs game in May was like NYC IN April, temp wise. I really liked Chicago a great deal, but to me it’s just too cold, and I am one who likes the change of seasons in NYC. We only get Polar Vortex type cold once in a very rare while. I love the outdoors and think the winter would be too long and cold for me to live there, but I would love to visit in summer.

Then there is happy wife, happy life.
Will she really be happy or is she just itchy for change, any change ?

Lifestyle wise I would stay, friends, family, commute matter. Career and financially I would seriously consider the move. Wife seem to be the tie breaker !
Last edited by beyou on Thu Apr 04, 2019 11:14 am, edited 3 times in total.

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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by Spedward » Thu Apr 04, 2019 8:28 am

My two cents; as someone that moved from a LCOL area (southern state, mid-size city) to Chicago.

My wife and I moved here @ 29. One thing I will say is the only real difference we noticed in costs was housing and taxes, and the pay differential more than offset that for us. Additionally, other expenses significantly decreased for us, particularly transportation cost. Where people get burned is when they get caught up in the abundance of food options and spend excess money of dinning out, which can be easy to do - lots of great options and everything is super convenient. If you avoid that, my guess is you would likely come out ahead - I know we did.

The other thing is that good paying employment opportunities are abundant if you are highly skilled and qualified at what you do. Been here for 10 years and income has tripled. Unfortunately we now have to move to a higher (perhaps the highest) COL city - we will terribly miss Chicago.

You can find a great two bedroom, close to the train, for like 2500. Much less if you don’t care to live in one of the highly desirable neighborhoods (Lincoln Park, Old Town, River North l, etc). If you are willing to add on 10-15 min to the commute, plenty of cheaper options in great neighborhoods further north. Look at Lincoln Square. Lots of families, so the two bedroom options tend to be on the cheaper side given the 3/4 bedroom places are a higher demand. If you commute to the loop, I would honesty check out Ravenswood. There is a metra stop there and it is a 15 minute shot to the loop. Great neighborhood - much better than the more crowded, popular options. Lots of two flats there where you can get a great two bedroom for like 1500-1800. Once you have kids (if you do) that is where the housing costs jump given outside of the trendy neighborhood schools drive the housing costs.

And schools get a bad name in Chicago, but honestly there are some true gems if you are willing to do some research - some of the best schools in the state are chicago neighborhood schools. We are in North Center - used to be the best kept secret in Chicago when we moved to it, but now everyone, with kids at least, wants to be here, which is good for us.

Spedward
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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by Spedward » Thu Apr 04, 2019 8:35 am

Oh, and we grew to love the winters.

Super cold but it builds character like nothing else. It is also funny to see folks running around in shorts in late March because it is suppose to hit the low 50s.

Leemiller
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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by Leemiller » Thu Apr 04, 2019 8:41 am

You’re in your mid-thirties, and you’re already bored. It doesn’t get better, only worse. I’m an attorney who has moved from the federal government, with a full pension, to the private sector - twice. I’m not only making a lot more money, but I’m also much happier. My spouse appreciates it, since when you’re bored / not happy at work, you bring that home.

For me risk is also about having skills that are stale / limited marketability and being pegged as a govt attorney, which only gets worse the longer that you stay. I would also never rely on a private sector or state pension fund 20 years out to not change. I’m not even confident about my vested federal pension.

As to your vested pension, for me that means having a signing bonus conversation.

Also, are you an attorney?

spammagnet
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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by spammagnet » Thu Apr 04, 2019 8:51 am

Dukethegator wrote:
Tue Apr 02, 2019 8:10 pm
A combination of a possible job offer and a death in the family has left me at a major crossroads: do I leave a safe job (in a college town/state capital in a metro area of 360k) or take a job that doubles my income in a high tax area (Chicago). I believe if they offer, I am inclined to take the job, but I am afraid there is some flaw in my analysis. Any help from fellow boggleheads would be greatly appreciated. ...
The potential impact on your future life justifies the price of a subscription to Maxifiplanner, the web-based version of ESPlanner. You can enter the current state to project your current financial future. You can then enter an alternative scenario (Chicago) and compare the results of the two.

The results are only an estimate, of course. While the individual results won't be exact, comparison of the two should give you a good idea of the magnitude of difference between the two.

I'm a user of them product, not an employee, and have no financial interest in it.

petulant
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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by petulant » Thu Apr 04, 2019 9:00 am

Dukethegator wrote:
Wed Apr 03, 2019 7:57 pm
petulant: I recongize the risk which is sort of what led me to post here. Nobody else I discuss this with sees it the same way, but I am a catastrophizer. Friends have pointed out that I could easily return to this market. I have a strong reputation.

All: I think the forum has broken down into two groups: those who think why risk a good thing vs those who are attracted to larger cities. In a lot of ways this has been my internal debate this entire time that many around me thought I was being ridiculous. Now there’s just a lot of soul searching.

Thanks everyone.
Yes, I think it's a lifestyle choice. And it's one you should think about carefully since your SO may be much happier. But it's not straightforwardly a better financial move.

HEDGEFUNDIE
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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by HEDGEFUNDIE » Thu Apr 04, 2019 10:18 am

petulant wrote:
Thu Apr 04, 2019 9:00 am
Dukethegator wrote:
Wed Apr 03, 2019 7:57 pm
petulant: I recongize the risk which is sort of what led me to post here. Nobody else I discuss this with sees it the same way, but I am a catastrophizer. Friends have pointed out that I could easily return to this market. I have a strong reputation.

All: I think the forum has broken down into two groups: those who think why risk a good thing vs those who are attracted to larger cities. In a lot of ways this has been my internal debate this entire time that many around me thought I was being ridiculous. Now there’s just a lot of soul searching.

Thanks everyone.
Yes, I think it's a lifestyle choice. And it's one you should think about carefully since your SO may be much happier. But it's not straightforwardly a better financial move.
It is absolutely the better financial move.

The wife is clearly driven. She can easily find a job in Chicago paying $50k or more, with a growth trajectory much higher than the pay ceiling that likely exists where they live now.

These are the two main drivers of wealth accumulation by moving:

1. Higher income growth potential for jobs. There are 11 Fortune 500 companies headquartered in how Chicago area. How many where they live now? To quantify, let's assume that together, they earn an extra $5k per year in raises than if they stay where they are.

2. Compounding effect of extra savings. Let's do the comparison with OP's charts, $125k vs $200k. $64k take home vs $85k take home. Let's say an extra $10k is consumed in Chicago by higher cost of living. That leaves an extra $10k / yr for savings. (Btw, living in a $2500 two bedroom is living in a high rise luxury condo with a 24 hour doorman in River North - I know because I own one. This is not apples-to-apples to the house they live in now by any means. But let's be conservative and roll with it.)

So that's an extra $15k per year in extra savings by moving. Let's assume market rate of return of 7%. By year 10, they will have accumulated $200k in wealth they would not have otherwise had by staying where they are.

CobraKai
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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by CobraKai » Thu Apr 04, 2019 10:53 am

HEDGEFUNDIE wrote:
Thu Apr 04, 2019 10:18 am
The wife is clearly driven. She can easily find a job in Chicago paying $50k or more, with a growth trajectory much higher than the pay ceiling that likely exists where they live now.

These are the two main drivers of wealth accumulation by moving:

1. Higher income growth potential for jobs. There are 11 Fortune 500 companies headquartered in how Chicago area. How many where they live now? To quantify, let's assume that together, they earn an extra $5k per year in raises than if they stay where they are.

2. Compounding effect of extra savings. Let's do the comparison with OP's charts, $125k vs $200k. $64k take home vs $85k take home. Let's say an extra $10k is consumed in Chicago by higher cost of living. That leaves an extra $10k / yr for savings. (Btw, living in a $2500 two bedroom is living in a high rise luxury condo with a 24 hour doorman in River North - I know because I own one. This is not apples-to-apples to the house they live in now by any means. But let's be conservative and roll with it.)

So that's an extra $15k per year in extra savings by moving. Let's assume market rate of return of 7%. By year 10, they will have accumulated $200k in wealth they would not have otherwise had by staying where they are.
An extra 10k? That's pretty conservative unless OP is in a MCOL area. I am in a similar situation as OP and would anticipate paying $1000 more per month for housing in Chicago. There's also increased fuel/food costs, increased sales tax, etc. His 20k pay bump will be taxed so his after tax net increase could be 2/3 to 3/4 of that amount. They could very well be bumped to a higher tax bracket. Will they enjoy living in an apartment or condo as much as a house? That's more of a personal decision.

We're also assuming a market rate of return by 7%. There's going to be another recession eventually. Nobody knows when it will take place or what extent. I wouldn't count on a guaranteed rate of return.

KyleAAA
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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by KyleAAA » Thu Apr 04, 2019 11:15 am

goblue100 wrote:
Thu Apr 04, 2019 6:44 am
KyleAAA wrote:
Wed Apr 03, 2019 2:22 pm
Chicago is a fantastic city and I would classify it as more MCOL than HCOL. If you are city people, Chicago will improve your QOL just based on all the amenities. The food scene is great so expect to spend more eating out and doing stuff. It isn't just your rent that will go up. But $200k+ in Chicago is plenty.
I'll pass:
https://en.wikipedia.org/wiki/Crime_in_Chicago
Chicago's homicide rate had surpassed that of Los Angeles by 2010 (16.02 per 100,000), and was more than twice that of New York City (7.0 per 100,000) in the same year.[16] By the end of 2015, Chicago's homicide rate would rise to 18.6 per 100,000. By 2016, Chicago had recorded more homicides and shooting victims than New York City and Los Angeles combined
Much of the crime is concentrated in certain areas OP would never visit, anyway. Crime isn't a good reason to avoid moving to a thriving city, even if only parts of it are thriving. The COL in the city is quite reasonable, as well.

rgs92
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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by rgs92 » Thu Apr 04, 2019 11:51 am

Don't ever give up a government job for a private sector one.

You may easily have long periods of unemployment, a layoff after age 45 with no prospects for further employment (certainly not as a direct employee, and you will enter the gig economy as a contractor with short term jobs and terrible benefits).

Also, you will have much more stress in the private sector, along with longer hours and much worse job benefits.

mlipps
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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by mlipps » Thu Apr 04, 2019 11:54 am

CobraKai wrote:
Thu Apr 04, 2019 10:53 am
HEDGEFUNDIE wrote:
Thu Apr 04, 2019 10:18 am
The wife is clearly driven. She can easily find a job in Chicago paying $50k or more, with a growth trajectory much higher than the pay ceiling that likely exists where they live now.

These are the two main drivers of wealth accumulation by moving:

1. Higher income growth potential for jobs. There are 11 Fortune 500 companies headquartered in how Chicago area. How many where they live now? To quantify, let's assume that together, they earn an extra $5k per year in raises than if they stay where they are.

2. Compounding effect of extra savings. Let's do the comparison with OP's charts, $125k vs $200k. $64k take home vs $85k take home. Let's say an extra $10k is consumed in Chicago by higher cost of living. That leaves an extra $10k / yr for savings. (Btw, living in a $2500 two bedroom is living in a high rise luxury condo with a 24 hour doorman in River North - I know because I own one. This is not apples-to-apples to the house they live in now by any means. But let's be conservative and roll with it.)

So that's an extra $15k per year in extra savings by moving. Let's assume market rate of return of 7%. By year 10, they will have accumulated $200k in wealth they would not have otherwise had by staying where they are.
An extra 10k? That's pretty conservative unless OP is in a MCOL area. I am in a similar situation as OP and would anticipate paying $1000 more per month for housing in Chicago. There's also increased fuel/food costs, increased sales tax, etc. His 20k pay bump will be taxed so his after tax net increase could be 2/3 to 3/4 of that amount. They could very well be bumped to a higher tax bracket. Will they enjoy living in an apartment or condo as much as a house? That's more of a personal decision.

We're also assuming a market rate of return by 7%. There's going to be another recession eventually. Nobody knows when it will take place or what extent. I wouldn't count on a guaranteed rate of return.
My math for owning a car always comes out to $400-500/month. So going from two vehicles to one easily covers the increase in food costs for Chicago. Actually, I went grocery shopping my parent's town in rural Ohio last week and thought their prices were higher than mine for a lot of things. No increase in fuel costs--people almost universally take public transportation here. Taxes are certainly a consideration, but actually income taxes in Illinois are totally reasonable. It's only sales & property taxes that are high.

it seems like all of you saying this is a bad financial decision are using OP's (entirely too high) numbers and ignoring those of us who actually live here who are setting that straight...

Thegame14
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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by Thegame14 » Thu Apr 04, 2019 11:56 am

ID stay for the low stress jobs with sure thing pensions, and re-consider the not having kids.... but that is a personal choice. I love Chicago but higher salary plus higher cost of living, longer commute, more stressful jobs, and can wife easily get a job as well? I don't think I would do it, as I am risk averse, but you are relatively young, and don't want to have kids so maybe city life is more exciting

If I were you, if you chose to move, Id wait those three years to vest in the pensions then leave..... I would not walk away from a pension...

Thegame14
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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by Thegame14 » Thu Apr 04, 2019 12:06 pm

HEDGEFUNDIE wrote:
Thu Apr 04, 2019 10:18 am
petulant wrote:
Thu Apr 04, 2019 9:00 am
Dukethegator wrote:
Wed Apr 03, 2019 7:57 pm
petulant: I recongize the risk which is sort of what led me to post here. Nobody else I discuss this with sees it the same way, but I am a catastrophizer. Friends have pointed out that I could easily return to this market. I have a strong reputation.

All: I think the forum has broken down into two groups: those who think why risk a good thing vs those who are attracted to larger cities. In a lot of ways this has been my internal debate this entire time that many around me thought I was being ridiculous. Now there’s just a lot of soul searching.

Thanks everyone.
Yes, I think it's a lifestyle choice. And it's one you should think about carefully since your SO may be much happier. But it's not straightforwardly a better financial move.
It is absolutely the better financial move.

The wife is clearly driven. She can easily find a job in Chicago paying $50k or more, with a growth trajectory much higher than the pay ceiling that likely exists where they live now.

These are the two main drivers of wealth accumulation by moving:

1. Higher income growth potential for jobs. There are 11 Fortune 500 companies headquartered in how Chicago area. How many where they live now? To quantify, let's assume that together, they earn an extra $5k per year in raises than if they stay where they are.

2. Compounding effect of extra savings. Let's do the comparison with OP's charts, $125k vs $200k. $64k take home vs $85k take home. Let's say an extra $10k is consumed in Chicago by higher cost of living. That leaves an extra $10k / yr for savings. (Btw, living in a $2500 two bedroom is living in a high rise luxury condo with a 24 hour doorman in River North - I know because I own one. This is not apples-to-apples to the house they live in now by any means. But let's be conservative and roll with it.)

So that's an extra $15k per year in extra savings by moving. Let's assume market rate of return of 7%. By year 10, they will have accumulated $200k in wealth they would not have otherwise had by staying where they are.
But they lose the guaranteed Govt pensions...... I saw one calculator that estimated the value of an average teacher pension vs a 401K and the 401K had to have a balance of 1.9M to match the payout of a teacher pension.

Frisco Kid
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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by Frisco Kid » Thu Apr 04, 2019 12:12 pm

OP would suggest you stay put.............. Get your pension vesting and buy the townhouse. Many would envy your CURRENT situation.

zeal...... congrats as you are wise beyond your years IMHO.

Barsoom
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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by Barsoom » Thu Apr 04, 2019 12:28 pm

Dukethegator wrote:
Tue Apr 02, 2019 8:50 pm
I am in a low COL southern state with no state income tax. Pensions are secure here.
Okay, I'll bite...

Have you SEEN the weather in Chicago? Why would you want to give up the lifestyle in Tallahassee for that? You have 30A right down the road, Disney, the cruise capital of the country...

I'm a Gator, too, so I can appreciate what you have right now. I wish I can convince my wife to move to Florida, but she won't go while my mother still lives there. :(

-B

KyleAAA
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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by KyleAAA » Thu Apr 04, 2019 3:04 pm

rgs92 wrote:
Thu Apr 04, 2019 11:51 am
Don't ever give up a government job for a private sector one.

You may easily have long periods of unemployment, a layoff after age 45 with no prospects for further employment (certainly not as a direct employee, and you will enter the gig economy as a contractor with short term jobs and terrible benefits).

Also, you will have much more stress in the private sector, along with longer hours and much worse job benefits.
I don't believe that is true. My benefits have always been much better than an equivalent government job, minus the pension. But the additional pay has always far exceeded the value of a pension. It is not high stress or long hours, either.

rgs92
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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by rgs92 » Fri Apr 05, 2019 12:28 am

But the most important thing is the job security in a gov't job.

HEDGEFUNDIE
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Re: Weighing career options (34 yo, considering leaving low COL for high COL, am I crazy?)

Post by HEDGEFUNDIE » Fri Apr 05, 2019 12:29 am

rgs92 wrote:
Fri Apr 05, 2019 12:28 am
But the most important thing is the job security in a gov't job.
What about job satisfaction?

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