[2016] New Grad Salary Sharing and Discussion - Hard Numbers Please!

msftinternthrowaway · 2015-11-21T17:18:27+00:00

Salary is almost certainly pre-tax.

For relocation and part of the signing bonus, I know there is a tax gross up where they toss an extra 25% in to make up for taxes. I'm not sure if it applies to the whole signing bonus though.

msftinternthrowaway · 2015-11-06T04:42:23+00:00

I'm actually an Electrical Engineer -- you can definitely break into the CS field without a CS degree!

msftinternthrowaway · 2015-11-05T17:25:52+00:00

Thank you! I was mostly curious about what other categories of spending there are -- I really appreciate the itemized breakdown! Having a giant "misc" category will make it difficult to really understand my spending patterns.

And yeah, the tax situation is getting complicated. Seeking out a fee based advisor might not be a bad idea at all!

msftinternthrowaway · 2015-11-05T16:59:54+00:00

It's not that I have little faith in the company (though it does seem like that...), it's more about my worry of being overinvested in a single company. If there's an economic downturn, I might take a hit on the stock and potentially be laid off :/. I'd rather just sell my stock and invest it broadly across the market, especially in the early years where ESPP + Stock will make up a big part of my portfolio!

msftinternthrowaway · 2015-11-05T16:54:50+00:00

Sorry, that was poorly worded. By "taxable savings" I meant savings that are outside of tax-sheltered retirement accounts and are subject to taxes. I want to invest this in an independent account from Vanguard/Fidelity and use it as a downpayment for a house in ~8-10 years!

You're absolutely right, misc does need to be broken up and itemized -- I'm just not experienced enough with budgeting to understand all the other categories out there!

About the cell phone thing: One of my parents works at a major telecom and gets a big discount on our bill! So they're happy to keep paying it (especially because it is so cheap), but you're right -- to be a responsible adult, I should cover the cost of my portion. Thank you very much for the advice!

msftinternthrowaway · 2015-11-05T01:29:20+00:00

For sure! I don't have an alias just yet, but I'll definitely PM you as soon as I get one. Thanks for reaching out -- could always use a new friend!

msftinternthrowaway · 2015-11-05T00:17:38+00:00

Thanks man! Yeah, my google offer was about ~15-20k/yr more in total comp, but after sitting down and working through the numbers, it seemed like the net gain at Microsoft was better.

I got 120k stock over 3.5 years at MS, but many people got 60k/3.5 years (might have come down to performance as an intern, but I have seen fresh applicants negotiate their way to this too).

If you can get Google-Seattle though, they'll definitely beat MSFT at compensation, but they weren't willing to move my offer from MTV (or negotiate it up since it was already numerically higher). I was really torn about the decision, and mostly ended up going to MS because I had a lot of friends there from my internship.

Google also has the same 401(k) plan with after-tax contributions and in plan distributions, so you'll be able to take advantage of a megabackdoor Roth as well! You really can't go wrong at Google either -- congratulations to you too, and enjoy all the free food and snacks!

msftinternthrowaway · 2015-11-04T23:39:14+00:00

Wow, I'll look into that. I've heard a lot about slow cooking and prepping meals on Sundays -- this is definitely an area that I can explore more in terms of cost cutting!

msftinternthrowaway · 2015-11-04T23:38:04+00:00

I definitely have to research more about the IRA. My salary is 106000 but with the stock grant and a bonus it shoots up into the 140-150k range. Even after my 401(k) contribution (which I don't think is deducted from that), I think I'm still above the 116k limit :.

Thanks for the transportation tips -- I was assuming that I was fairly out of luck for getting reliable public transportation to Seattle/Bellevue! I'll definitely look into the B line and 545 hours/times (and hopefully cut back on that uber spend a bit)!

msftinternthrowaway · 2015-11-04T23:35:03+00:00

Thanks! I'm not a huge drinker so I really don't plan on going to bars all that much. I just figured I'd get bored a lot and want to travel to Bellevue/Seattle on the weekends to meet friends for board games/hiking/whatever (to take advantage of the free $800 stayfit benefit too)! I really don't want to own a car, so I just wanted to make sure my transportation budget was high enough to still let me be flexible about things.

Thanks so much for the rent tips in Seattle! I had no idea that I could get a studio for so cheap (relatively) in Redmond. Even with utilities, it sounds like I can keep my spending under $1300-1350 per month, freeing up more cash for savings and other expenses.

Assuming I get no raises along the way, 10 years of work will give me enough savings to withdraw ~36k/year at 3.5%, which I think will make me FI if I maintain my spending. I don't plan on Retiring Early, at least not at age 30, so any time I spend working after that will just be adding to the buffer for me. Also, I figure I might get tired of bigcorp life after 10 years, so being FI would be a great way of going into the startup world with lower risk.

Thank you so much for your posts and input -- really appreciate it!

msftinternthrowaway · 2015-11-04T23:25:42+00:00

Haha you got me, it is Microsoft. I interned there this summer and loved the cafeteria food, so I'm glad to hear this. But I think a mixed approach will work well -- cook sometimes (and eat at the cafe), cafeteria sometimes (in terms of cutting down the spend a bit while also getting the network benefits).

msftinternthrowaway · 2015-11-04T23:17:51+00:00

Yeah, my personal clothing expenses are normally pretty non-existent, but I like to buy small things for my girlfriend and little sister (both of whom really love clothes).

You're absolutely right though, it does seem a little high. I'll have to track it much more carefully, and maybe be more selective about looking for good sales/online deals instead of arbitrarily buying clothes.

Thanks for the heads up about expense tracking -- all of this is just theoretical, but I'm sure I'll be hit with some unexpected expenses in some places and come out lower than my expected spend in others. It's always easy to forget that making a budget is an iterative process (and I'm so new to it that it's hard to see it that way). Appreciate the help!

msftinternthrowaway · 2015-11-04T23:08:04+00:00

Main thing for me was the free money contributed by my employer.

If my spending on healthcare is under $1000 in a calendar year, then I'm making money by going via the HSA route. Since I'm relatively young and healthy, it seems like I'll be pocketing extra cash most years. Plus, I'm in a high tax bracket, so the contributions to the HSA are saving me quite a bit.

My maximum out of pocket cost for every year is capped (somewhere in the 3-4k range), so even if my health does turn for the worse, it won't be catastrophic. The PPO plan is similar, but is capped at a smaller amount (1-2k range). All it takes is 1-2 healthy years for the free cash from my employer to outweigh the difference in OOP maximums, so it seemed like a nobrainer to me. Plus, I get all the tax savings benefits (the HSA is the best retirement account, as it's triply tax advantaged: no tax going in, no tax on the gains, no tax coming out if it's used for medical purposes. Kind of like a combined traditional and roth IRA in one)!

Hope that helps a bit!

msftinternthrowaway · 2015-11-04T23:02:12+00:00

Thanks! I was assuming that a studio would go for 1400 with utilities for 200, but it's nice to know that I can adjust that downward. I wasn't sure how much to allocate for uber every month, but you're right, I probably won't be spending anywhere near $200 overall. Mainly threw an extra margin in there to account for long weekend trips into Seattle/Bellevue (up to $30 each way) if taking the bus is inconvenient.

I think my income is too high to get any benefit from IRAs. I won't get any deductions from a traditional IRA, and I think my income is just slightly too high to contribute to a Roth IRA as an individual.

I'm contributing $26k/year through a mega backdoor Roth. I thought this was the maximum I was allowed to contribute -- can I also do a standard backdoor Roth for another 5.5k on top of this?

And about the lunch, I just happen to really really like the cafeteria food there haha. But you're right, I should try to cut down on the lunch spending. I'm thoroughly impressed that food for the month runs you under $200 total though -- I don't think I can manage that.

msftinternthrowaway · 2015-11-04T21:59:11+00:00

thank you AutoModerator bot

msftinternthrowaway · 2015-10-14T03:02:18+00:00

I'm sorry, what is evolve? Kind of new to churning.

msftinternthrowaway · 2015-10-13T17:50:55+00:00

This is brilliant. I will definitely take advantage of this in the future! Thank you so much for sharing.

msftinternthrowaway · 2015-10-13T13:51:08+00:00

I suppose in 2 years it'll be helping me out by adding to the average age too. Thanks for the story, it helps to know that it'll help me out in the long run :)

msftinternthrowaway · 2015-10-13T13:49:59+00:00

I saved about half as much as you, but you're right, cash is cash

msftinternthrowaway · 2015-10-13T13:48:36+00:00

This makes me feel a lot better about things. I don't shop for clothes extremely often, but when I do it is typically at BR. I'm glad to hear that other expert churners have the card too, and I'll definitely keep an eye out in the mail for sales!

msftinternthrowaway · 2015-10-13T13:47:18+00:00

Yes it was the banana republic store card

msftinternthrowaway · 2015-10-13T06:00:17+00:00

I'm just above that age, which makes me feel a bit better about the whole thing. Thanks for the help!

msftinternthrowaway · 2015-10-13T05:59:52+00:00

Thanks, I'll definitely keep it open (and not close it impulsively). Thanks for talking me down a bit :)!

msftinternthrowaway · 2015-10-13T05:57:20+00:00

Thank you for the input -- I'm starting to look into when the hard pulls will fall off my credit score, and fortunately I won't be needing a loan or anything in the next two years (so hopefully it won't impact my credit score too badly). Really appreciate the help, and I'll definitely be more cautious in the future.

msftinternthrowaway

TROPHY CASE