You've just got the job offer of a lifetime: a software engineer role at Twitter. For months, you'd been waiting for the call, to pack up your life and relocate to Silicon Valley, in one of the nation's most expensive zip codes. But COVID-19 has changed all that. Now, the social media company is allowing its workers to work from home -- forever, if they choose.
With the entirety of the U.S. at your disposal, you have a daunting but rewarding task ahead of you. Remote work offers the chance to live somewhere you truly want to live, where a fantastic quality of life is well within your budget. But where should you start?
From my analysis of the 125 largest metropolitan areas in the U.S., three cities present themselves as obvious candidates: Nashville, Tenn.; Austin, Texas; and Sarasota, Fla.
Why these cities?
To answer this question, I considered three factors: how much money you have to play with after tax; how far that money will go, from a housing perspective; and which places offer the greatest quality of life.
Let's start with your take-home pay. As a software engineer at Twitter, you can expect gross earnings of $150,000 a year, according to salary aggregator Glassdoor. Product managers make $165,000, including bonuses, while account managers, who are not on the tech side, earn a still extremely comfortable $100,000. (At a senior level, all of these salaries rise dramatically.)
How much of that you actually take home depends a bit on where you are. In Silicon Valley, a software engineer earning $150,000 could expect an effective tax rate of about 33%. In New York City, it would be closer to 35%. But in all three of my suggested cities, which are in states that have either no personal income tax or no tax on wages, the effective tax rate is just over 25%. That means an extra $1,200 a month of post-tax income, to a total of about $9,250 a month, according to SmartAsset's tax calculator.
Most personal finance experts suggest spending no more than a third of your post-tax income on housing. In each of these cities, that works out at $3,000 a month to spend on rent or your mortgage. If you're buying, your budget is about $550,000, assuming a 10% deposit.
While there are 10 states with a similar tax set-up, most have housing prices far above the national average, with Washington, New Hampshire and Alaska among the most expensive.
Finally, I considered quality of life metrics, paying particular attention to value and desirability. I excluded some factors that normally play a part in these indices, such as the job market or commute time -- after all, you'll be working from home.