Have you ever taken a huge salary cut to live somewhere you wanted to be?

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namajones
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Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by namajones »

I'm 62 and could retire at any time, but I'm making good money and could do so for as long as I can stand it.

Job offer now in Germany doing essentially the same as I do in the States at half the salary I earn, but it's a beautiful place and I've wanted to go back for 20 years. Non-monetary benefit, other than change of scene, is that I'd qualify for the Blue Card, which could give me permanent residency in Europe in about 2 years, given my ability to speak the language.

Hard to walk away from the bigger bucks, though. Really hard. Not sure why, exactly. Maybe I'm worried that I'll get there and realize I've given up a lot for essentially the same day-to-day routine.

Anyone have a similar decision to make, made it, and can provide lessons learned?

Thanks.
Last edited by namajones on Sun Jul 25, 2021 5:53 am, edited 1 time in total.
z3r0c00l
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by z3r0c00l »

I think you have worked long and hard enough to take a pay cut and do something you will enjoy for a few years. Consider it a half-retirement which you say you can afford. My only hesitation on that front would be the pandemic which has become very variable by country.
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VoiceOfReason
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by VoiceOfReason »

Almost every decision you make in life has $ as a large factor. My view on the reason for saving is so that at some point you’ve earned enough wealth that $ is no longer a significant factor.

How confident are you w you net worth and retirement now? Assuming you are in a secure financial position as you describe, $ doesn’t need to play any role in this decision. Just ask yourself if u want to do the same job in Germany?
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Tourne
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by Tourne »

Is the 50% of your current salary net of taxes? Just make sure you figure out how much your take home pay would be since income taxes in Europe are generally higher than in the US (but health care is state-sponsored, so your living costs may be lower than in the US). But as others said, if you've "won the game" and have enough already to retire, your take home pay will not matter as much as your quality of life.

Also make sure to look into how Germany will tax your US investment assets, since bilateral tax treaties often are often more generous in treating earned income than they are with unearned income. Make sure your dividends and interest are not going to be double-taxed.

At the very least, you will not (legally) be able to make new investments in your US accounts for the next few years, as EU regulations do not currently allow EU residents to invest in US investment accounts. Some US brokerages may allow you to "freeze" the account while you are overseas (keep the existing assets, but no new purchases). Others will insist you liquidate your account since you are no longer a US resident. There are work-arounds discussed in other threads on this board, but best to go into this with your eyes fully open.

We live in an EU country, and travel quite regularly to Germany for weekend trips. As you note from personal experience, the quality of life in the country is extremely high, and work-life balance is a priority. Particularly if you already speak German, it can be an extremely comfortable and beautiful place to life. Best of luck in making your decision.
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by Normchad »

z3r0c00l wrote: Sun Jul 25, 2021 5:53 am I think you have worked long and hard enough to take a pay cut and do something you will enjoy for a few years. Consider it a half-retirement which you say you can afford. My only hesitation on that front would be the pandemic which has become very variable by country.
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chazas
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by chazas »

Yes. I moved to Hawaii in my early 40s and my pay was about cut in half. Also Hawaii is about the most VHCOL place in the US.

It didn’t work out long term and career wise was not the best decision. But it wasn’t the only bad career decision I made and I wouldn’t trade the experience for anything.
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by halfnine »

We've lived all over the place. Combined salary has always been quite variable, but life is too short to worry about it. But, there are probably quite a few savings both in time and money for you. If you value an EU citizenship this path is probably significantly cheaper in time and money to achieve it. Your out of pocket healthcare and health insurance costs should be significantly lower. Your European travel costs will be significantly cheaper and less time consuming overall than if you had never had done never lived in Europe and wanted to replicate all the experiences you'll have while you live there (If I never left the country in order to achieve the equivalent travel experiences it would take many years, 100s of flights, and well into 6 figures more in travel expenses.
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by Watty »

namajones wrote: Sun Jul 25, 2021 5:51 am ....but it's a beautiful place and I've wanted to go back for 20 years.
Be sure to carefully research what the winters will be like where you would be living. I have not ever lived there but from talking with people it sounds like winters can be pretty hard. There will also be times when the sun sets at around four in the afternoon.

https://www.timeanddate.com/sun/germany ... &year=2021

You also need to consider that you would be moving there during a pandemic. I don't have a clue what the pandemic is like there but you also need to figure out how that might impact you.
namajones wrote: Sun Jul 25, 2021 5:51 am Anyone have a similar decision to make, made it, and can provide lessons learned?
If you exclude things like deaths, illnesses, etc most peoples biggist regrets are oppurtunities that they did not take.

When deciding what to do about some situations I like to think through a "fire drill" of a realistic worst case scenerio to help calm my fears that things could turn out horribly.

You might pretend that you try it and it does not work out so you would need to figure out what you would do then. Most likely you would just move back to the US and retire somewhere more or less like you would if you stayed in your currnt job. Your finances might be a bit less but don't focus on the dollar numbers, focus on just how that would actually impact your life with things like the type of house you would live in or the lifestyle you would live. Reading way in between the lines I would suspect that the only real impact would be that you would leave a smaller estate some day which may or may not be important to you.
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by rich126 »

Everyone I've known who has worked in Germany have loved it. And at your age I don't see money as being that important, at least it wouldn't be forme.
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by Grogs »

If you're really able to retire, as in could never work a day again and live the lifestyle you want, then taking the job seems like a no-brainer. That's the whole point of being FI - not having to work for money again if you don't want to. You just have to make sure the differences in taxes and cost of living in Germany don't upset your budget planning.

If the job turns out to be absolutely horrible, no worries, just come back to the US and retire as planned. If it's at least tolerable, work for two years to get your blue card if that's your goal. And if you find you really like it, just keep doing it as long as they'll let you! :beer
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namajones
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by namajones »

Thanks, everyone, for your very thoughtful responses. Everyone has made excellent points that I will take to heart. One thing I've decided to do as a result is seek out a German tax expert in the D.C. area for a consultation so that I know exactly what the financial ramifications are of accepting a job there. Issues such as taxation of dividends or unrealized capital gains in my taxable brokerage account are of particular concern to me. The latter issue (taxation of unrealized capital gains) I learned about just recently and strikes me as particularly onerous. Hopefully what I've read is incorrect. And then there are considerations of social security impact of having both SS and a German pension at 67, for which I'm eligible anyway from having paid into the system for 5 years and would be paying further into with another employment stint. Things get complicated in a hurry.
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by Ranunculus »

I work at a university that doesn't pay faculty as much as other universities, so they use a concept of "total compensation" to argue that the benefits we receive (health care, pension, vacation etc.) more than compensate for our below average pay.

The same principal applies to living in Germany, and many other European cities. You may not make as much salary as you do here, but you have an outstanding public transportation system, excellent health care that includes extended time off to recover from physical and mental illness, greater level of personal safety, networks of trails and open space for recreation; the list goes on. The social benefits are also impossible to quantify. Have you seen the stories of whole towns coming together to clean up the flood damage and help people to rebuild? That may happen in a few places in the US, but I don't think we have the same level of social commitment here. Das letzte Hemd hat keine Taschen.
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namajones
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by namajones »

Ranunculus wrote: Sun Jul 25, 2021 2:05 pm Have you seen the stories of whole towns coming together to clean up the flood damage and help people to rebuild? That may happen in a few places in the US, but I don't think we have the same level of social commitment here. Das letzte Hemd hat keine Taschen.
You are quite right about the level of social mindedness and the difficulty of quantifying other social benefits, infrastructure, etc., and these things I have missed. Another perhaps compelling reason to return is Pflegeversicherung, which, if I retire there, which I had planned, would eliminate the need for the very expensive U.S. long term care plans, which seem not to have caps on premium increases but typically do limit how long you can actually get long term care, should you need it.
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by Elsebet »

I took a 37k base salary paycut when I moved from WA to PA, but the new company has a pension, better work/life balance, is more stable, and it's much cheaper to live out here so I think I am just about even honestly. I'm way happier being back in my home state. Don't think of just salary, think of total compensation and your life around work when comparing jobs.
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quantAndHold
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by quantAndHold »

I retired so that I could live where I wanted without regard to job prospects. So there's that.

My personal opinion is that once you reach FI, then quality of life trumps everything else. Being able to arrange our lives to maximize our quality of life is what we've been working towards all these years, right?
Nicolas
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by Nicolas »

Yes I did. I quit a job paying $5.25 per hour to move 300 miles away to be closer to family. The job I took there paid $2.25 per hour, a more than 50% pay-cut.
Last edited by Nicolas on Sun Jul 25, 2021 9:53 pm, edited 1 time in total.
harrychan
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by harrychan »

I would not do it. I would negotiate to work part-time at that salary and state your current compensation.
This is not legal or certified financial advice but you know that already.
rich126
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by rich126 »

namajones wrote: Sun Jul 25, 2021 2:44 pm
Ranunculus wrote: Sun Jul 25, 2021 2:05 pm Have you seen the stories of whole towns coming together to clean up the flood damage and help people to rebuild? That may happen in a few places in the US, but I don't think we have the same level of social commitment here. Das letzte Hemd hat keine Taschen.
You are quite right about the level of social mindedness and the difficulty of quantifying other social benefits, infrastructure, etc., and these things I have missed. Another perhaps compelling reason to return is Pflegeversicherung, which, if I retire there, which I had planned, would eliminate the need for the very expensive U.S. long term care plans, which seem not to have caps on premium increases but typically do limit how long you can actually get long term care, should you need it.
We've gone on several trips to Europe during the Christmas Market season. Obviously that is late fall and winter weather. We were in a cab in a smaller town in Germany (maybe Rotherburg, not sure) and it had snowed a fair amount (8+ inches). I looked across the road and a car was having trouble getting up a hill. I saw several 50ish women get behind it and push it. Then when the car finally moved forward, the car kicked back a bunch of snow on the women. They simply dusted it off with their hands and went on their way.

Certainly not without flaws but where I used to work we often had people go there for 2-4 year assignments and I can't recall anyone ever saying they had a bad time. I started looking for a position there a bit too late in my career. One contractor kept delaying things due to a holdup on the contract getting awarded and I finally gave up and took another job.
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by Trader Joe »

namajones wrote: Sun Jul 25, 2021 5:51 am I'm 62 and could retire at any time, but I'm making good money and could do so for as long as I can stand it.

Job offer now in Germany doing essentially the same as I do in the States at half the salary I earn, but it's a beautiful place and I've wanted to go back for 20 years. Non-monetary benefit, other than change of scene, is that I'd qualify for the Blue Card, which could give me permanent residency in Europe in about 2 years, given my ability to speak the language.

Hard to walk away from the bigger bucks, though. Really hard. Not sure why, exactly. Maybe I'm worried that I'll get there and realize I've given up a lot for essentially the same day-to-day routine.

Anyone have a similar decision to make, made it, and can provide lessons learned?

Thanks.
No, absolutely not. I never have and I never will.

I always stick to my guns (the total compensation that I expect).

I have never failed.
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by AlohaJoe »

namajones wrote: Sun Jul 25, 2021 5:51 am

Anyone have a similar decision to make, made it, and can provide lessons learned?
Sure, I went from $250,000 to $90,000 to be in a location I preferred.

I'm not sure there's anything more to it than deciding when you have "enough" and additional money is just ego stroking that no one in the world but you cares about.
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beyou
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by beyou »

I am going down to zero so I can avoid relocating and stay where I am.
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by kramer »

Another less complicated possibility is to continue on your present job for another 1 to 2 years, and then retire and go stay in Germany for 3 months or more (depends on visa). You may lack the social connections from work on such a trip, but there are other positives to doing it this way.
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by EddyB »

kramer wrote: Mon Jul 26, 2021 12:55 am Another less complicated possibility is to continue on your present job for another 1 to 2 years, and then retire and go stay in Germany for 3 months or more (depends on visa). You may lack the social connections from work on such a trip, but there are other positives to doing it this way.
Not getting the blue card and its path to permanent residency is a very big price to pay for that.
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by Scotttheking »

You want to be there? Stop fretting and go for it!
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by djpeteski »

Think about it the opposite way. If someone offered you double, of what you make now, to live in a place that you loathed would you take it?

I am guessing "no".

Take the job in Germany as it will make you happy. Hell even if you had no money you could probably live off that salary comfortably.
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by Wricha »

If you are FI at 62, some point in the near future you are going to take a 100% pay cut. In a New York minute I’d be on the Autobahn. Did I mention a 911.
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by hudson »

namajones wrote: Sun Jul 25, 2021 5:51 am I'm 62 and could retire at any time, but I'm making good money and could do so for as long as I can stand it.

Job offer now in Germany doing essentially the same as I do in the States at half the salary I earn, but it's a beautiful place and I've wanted to go back for 20 years. Non-monetary benefit, other than change of scene, is that I'd qualify for the Blue Card, which could give me permanent residency in Europe in about 2 years, given my ability to speak the language.

Hard to walk away from the bigger bucks, though. Really hard. Not sure why, exactly. Maybe I'm worried that I'll get there and realize I've given up a lot for essentially the same day-to-day routine.

Anyone have a similar decision to make, made it, and can provide lessons learned?

Thanks.
Years ago, I chose a good place with lower pay. It worked for me.
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by MichDad »

When I was in my late 30s, I took a two year leave of absence from my government job to apply my skills in a developing country. I had no salary income for those two years and I couldn't contribute to my retirement accounts. I was reimbursed most of my expenses, which were quite low. The foundation that reimbursed my expenses sent me 1099s for those reimbursements. That caused me to have "income" for Social Security purposes. I hadn't budgeted for this and it resulted in me having to dig into my savings to continue my work.

The work was life changing for me. The effects were almost all positive and I'm still reaping the benefits almost 30 years later, now in my retirement.

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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by happyisland »

Around 20 years ago I left the lawyering game in DC, and moved to the Caribbean to work in a far less well-paid field. It was a lifestyle decision, and it has worked out beautifully. OP: go for it!
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by LuckBeALady »

I took a 25% pay cut to live in a more hospitable climate which was located within driving distance of my and husband’s extended families. No regrets.

I would take the Germany job in a heartbeat. We have several dear friends there and I love the civic-mindedness of German culture.
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by treesinthewind »

I have, about 40% to move to a desired location that was LCOL. Thought it would be a good job but it wasn't, and the pay cut just made it that much harder to bear, even though our family was in a great place. Found a remote gig at my old pay rate and am still thankful every morning to have escaped. If you're that close to retirement, I wouldn't take a pay cut unless the job itself was something that you were sure you would absolutely love and the pay cut was basically a charitable donation on your part. By sure I mean that you've had previous professional experience with the people and organization you'll be working with. Otherwise you're far away in a beautiful place stuck doing a miserable job for low pay. Either find a remote gig, negotiate for part-time as other people suggested, or retire and live wherever you want.
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by deserat »

namajones wrote: Sun Jul 25, 2021 5:51 am I'm 62 and could retire at any time, but I'm making good money and could do so for as long as I can stand it.

Job offer now in Germany doing essentially the same as I do in the States at half the salary I earn, but it's a beautiful place and I've wanted to go back for 20 years. Non-monetary benefit, other than change of scene, is that I'd qualify for the Blue Card, which could give me permanent residency in Europe in about 2 years, given my ability to speak the language.

Hard to walk away from the bigger bucks, though. Really hard. Not sure why, exactly. Maybe I'm worried that I'll get there and realize I've given up a lot for essentially the same day-to-day routine.

Anyone have a similar decision to make, made it, and can provide lessons learned?

Thanks.
I did something similar - I'm 57 - I moved to Germany (through the US Government) 2 years ago and it is my third time living here. Your situation is a bit different, however, at your stage in life, to me it is worth seeing if this is what you want. In two years you can make a decision not to stay, but it will be a better informed decision in the environment you have interest in. It is different over here; if it is something you like and you have an opportunity to increase options for your life, then if it were me, I'd take it. As you say, this is not really a money decision as you could retire at any time. Bigger bucks is not as high a priority right now; quality of life is. I love the lifestyle here; the fact that I can go to Paris for the weekend or Greece for a few days or the UK over the weekend or go to the fests, etc, makes a big difference in life quality for me. I like to snow ski and skiing over here is wonderful.

So, I look at this as a two year experiment for you that can be ended with a return to the USA if you wish.

As for salary you earn, if you are a US citizen, remember that up to $108,700 (Form 2555)of what you earn in Germany (unless you work for the US government over there) is not taxed.....so the "half the salary" probably takes that in mind.
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by EddyB »

deserat wrote: Mon Jul 26, 2021 9:54 am
namajones wrote: Sun Jul 25, 2021 5:51 am I'm 62 and could retire at any time, but I'm making good money and could do so for as long as I can stand it.

Job offer now in Germany doing essentially the same as I do in the States at half the salary I earn, but it's a beautiful place and I've wanted to go back for 20 years. Non-monetary benefit, other than change of scene, is that I'd qualify for the Blue Card, which could give me permanent residency in Europe in about 2 years, given my ability to speak the language.

Hard to walk away from the bigger bucks, though. Really hard. Not sure why, exactly. Maybe I'm worried that I'll get there and realize I've given up a lot for essentially the same day-to-day routine.

Anyone have a similar decision to make, made it, and can provide lessons learned?

Thanks.
I did something similar - I'm 57 - I moved to Germany (through the US Government) 2 years ago and it is my third time living here. Your situation is a bit different, however, at your stage in life, to me it is worth seeing if this is what you want. In two years you can make a decision not to stay, but it will be a better informed decision in the environment you have interest in. It is different over here; if it is something you like and you have an opportunity to increase options for your life, then if it were me, I'd take it. As you say, this is not really a money decision as you could retire at any time. Bigger bucks is not as high a priority right now; quality of life is. I love the lifestyle here; the fact that I can go to Paris for the weekend or Greece for a few days or the UK over the weekend or go to the fests, etc, makes a big difference in life quality for me. I like to snow ski and skiing over here is wonderful.

So, I look at this as a two year experiment for you that can be ended with a return to the USA if you wish.

As for salary you earn, if you are a US citizen, remember that up to $108,700 (Form 2555)of what you earn in Germany (unless you work for the US government over there) is not taxed.....so the "half the salary" probably takes that in mind.
Not taxed by the US….
Mr.Chlorine
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by Mr.Chlorine »

I was at a very different point in life, but I did a similar move in my early 20s. After finishing undergrad, took a job in Dallas, TX. Spent a couple years there before taking ~30% paycut to move back to my midwest hometown. Texas company was also paying for my MBA, which I had to reimburse. 2 years of grad school was about 40% of my yearly salary then, so my first year back home I had around a 70% salary cut. Money was tight for a year (had to move back in with my parents) but it has been well worth it!
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namajones
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by namajones »

deserat wrote: Mon Jul 26, 2021 9:54 am
I did something similar - I'm 57 - I moved to Germany (through the US Government) 2 years ago and it is my third time living here. Your situation is a bit different, however, at your stage in life, to me it is worth seeing if this is what you want. In two years you can make a decision not to stay, but it will be a better informed decision in the environment you have interest in. It is different over here; if it is something you like and you have an opportunity to increase options for your life, then if it were me, I'd take it. As you say, this is not really a money decision as you could retire at any time. Bigger bucks is not as high a priority right now; quality of life is. I love the lifestyle here; the fact that I can go to Paris for the weekend or Greece for a few days or the UK over the weekend or go to the fests, etc, makes a big difference in life quality for me. I like to snow ski and skiing over here is wonderful.

So, I look at this as a two year experiment for you that can be ended with a return to the USA if you wish.

As for salary you earn, if you are a US citizen, remember that up to $108,700 (Form 2555)of what you earn in Germany (unless you work for the US government over there) is not taxed.....so the "half the salary" probably takes that in mind.
Thanks to you and to everyone else for these fascinating and useful responses. The "go for it" responses resonate more with me, I must admit, so that probably tells me something. Fact is I've turned down a half dozen job offers over there over the past 20 years so that I could secure myself financially and with healthcare (can take my govt health care with me now), so I have no more "security" excuses.

I can't explain it, but I've always felt more at home there than in the United States. There was some kind of unexplained calm that accompanied me over there, as though I had come home. Sounds ridiculously mystical, I know. Anyway, I'm assuming the same thing will happen this time, but there's no guarantee.

I like the idea of "what's the worst that can happen," and, well, I suppose the worst that can happen at my age is that I decide the job is not for me and I set out on some adventures for a while. (I just talked to my lawyer, who, at 67, has come down with some serious illness that will derail his plans, so that's a reminder that tomorrow is not guaranteed to anyone.) I'm a certified English teacher, too, and teaching is what I used to do over there, so I could probably scrounge up that kind of work, as well, either in the university or an international school. Lots of things I could do if it doesn't work out. So as you can see, I'm talking to myself now in the presence of all of you, who have offered your advice and reactions very generously. Thanks again.
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Re: Have you ever taken a huge salary cut to live somewhere you wanted to be?

Post by jimkinny »

Yes, no regrets
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