Here’s what people say about making $120,000 in Silicon Valley

An annual salary of $120,000 would sound like a pretty good deal anywhere around the world.

But that may not always be the case in Silicon Valley, where soaring rent prices and its brutal cost of living make $120,000 look almost average — even though it's more than double the US median household income.

We went through a Quora thread started by an engineer who claims to be making $120,000 a year in the San Francisco Bay Area to see what people think about that pay.

The post was started by an engineer who claims to have a $120,000-a-year salary with 0.1% equity in the startup he or she is working for. The person has a master's in computer science and a year of relevant working experience. He/she wants to know if the salary's good enough to live a comfortable life in the Bay Area.

First things first, the after-tax, take-home salary would be approximately in the range of $6,000 to $6,500 a month.

“So let’s do something super rough here: $10k/m pretax. Assume 30% gone for taxes. Assume some 401k/IRA type savings, let’s say 5% pretax (this is up to you). So expect to take home 65% of your 10k. So $6500/m.” — Devesh Khanal

That sounds about in-line with the salary of other starting engineer positions in the Bay Area.

“As a starter salary, that seems in line with what I’ve heard / signed off on as a hiring manager. Don’t expect to live large with that kind of money in the Bay Area, this place is becoming ludicrously expensive much faster than you can get raises.” — Luca Candela

Some people were surprised that a startup would offer that much money.

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"In the game industry, that would be the salary of a mid-level experienced programmer. Even in the Bay Area, I’m surprised you’re getting that for a startup. The salaries in the Bay Area tech are just as insane as the costs.” — Raymond Holmes

Most people said $120,000 should let you get by in the Bay Area, especially if you're single. But it won't make you feel rich.

“As for cost of living in SF, 120k will get a single person by just fine. Depending on your student loans or other debts of course. As others have said, you will not feel rich, since the cost of living in SF is quite high.” — Casen Davis

You'd live a much better life with that salary if you were in any other city.

“Anywhere else, you would be living like a king, but here, the high salary seems to melt away into obscurity and seems like a bright light in a dark garden that attracts all the naive bugs with an unknown promise of hope, and then kills them stone dead.” — Joe McCracken

Some people pointed out salary is meaningless. In the Silicon Valley startup world, it's all about the equity you own.

“Salary alone is relatively meaningless. You need equity and lots of it that performs extraordinarily well to live a stable life here. Your .1% equity could be good...but if you want to increase your odds of doing well, outside of becoming the next Facebook, you will need to get promoted rapidly and increase your compensation too.” — Chuck Holbrook

Equity is like a lottery, they said. There's huge upside, but it could all become useless, too.

“Your base pay is ok. Remember that your equity is a lottery ticket, it’s not a guarantee, the vast majority of startups fail. Read that last sentence again. If your equity isn’t worth anything, then you won’t be able to buy a home… probably ever.” — Jeff Wilsbacher

With $120,000, you might be able to save for retirement. But saving for a house, too? Forget about it ...

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"You can make it work at that salary while saving for retirement. If you want to save for a house at the same time, you will have to cut back on going out/trips/vacations. Many mention the cost of renting as your biggest expense but if you are living away from your family or you enjoy weekend getaways, these add up fast too.” — Tyler Hebert

But if you already own a house here, you could live comfortably with $120,000 a year.

“It doesn’t surprise me to hear of people making less than $120k and living just fine here. However, it is likely that these people either bought homes awhile ago, or live in rent controlled housing - both of which fix the biggest cost - housing - at less than current market level.” — Russ Huffman

That doesn't mean you won't have any savings. The best way to save in this kind of environment is to create an old-fashioned budget. And cut back on vacations, drinks, and all the other fun stuff...

“Since you may not behave like the median, I would suggest creating an old fashioned budget...Do the math. Calculate how much you'll have coming in (learn how federal and state taxes work), how much you'll be spending, and how much you can save. Figure out what sort of financial goals you have.” — Andrew Shieh

Also, think on the positive side: Given all the homeless people in San Francisco, $120,000 sounds like a lucky life.

“Considering the amount of homeless people I see every day on the sidewalk (San Francisco has a startlingly high homeless population), I would say that I'm very lucky, thankful, and comfortable to have this salary.” — Anonymous

And if you're not ready for all this, you may want to just leave ...

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“If you have a similar opportunity elsewhere I would seriously consider it. I’ve lived here 20 years and can tell you it takes a long time to get used to the cost. If you have a working spouse it can be much, much easier.” — Russ Huffman

Long story short: You'll be fine, but you won't be rich with a $120,000 salary in the Bay Area.​

“You'll probably be fine. Equity aside, $120K as an annual salary is more than enough to live somewhere nice, and drive a desirable vehicle, and not have an unlivable commute.” — Anthony Youhas

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