Cost of Living Comparison Data

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
User avatar
Topic Author
The Man with the Axe
Posts: 61
Joined: Sat Dec 21, 2019 2:05 pm

Cost of Living Comparison Data

Post by The Man with the Axe »

We are evaluating a potential move to a new city with a cost of living profile that is very different from our current location.

Most of the online calculators appear to aggregate various components of the COL (e.g., housing, healthcare, education, entertainment, etc.), assign a weight to each one and then deliver a single aggregated increase/decrease in COL, expressed as a percentage. (For example, the COL in City 1 is 120% of the COL in City 2.)

We would like to do a more detailed evaluation of this important issue. We can make our own very detailed comparisons of our projected Housing, Education and Tax expenses using our own existing personal information and easily accessible data from the web.

Is there a good free source for comparative cost of living data that would allow us to back out Housing, Education and Tax expenses, so we can estimate how our other living expenses would change in the new location?

Thank you.
pf747
Posts: 4
Joined: Fri Jan 14, 2022 1:34 am

Re: Cost of Living Comparison Data

Post by pf747 »

http://livingwage.mit.edu/

MIT put this one together. I've found it useful in the past. Best of luck on the moving decision!
momvesting
Posts: 383
Joined: Tue Apr 12, 2016 9:18 pm

Re: Cost of Living Comparison Data

Post by momvesting »

I think you are going to need to visit the area and see how your life specifically would be impacted. For example, we recently visited LA. In addition to the obvious major housing price difference, we noticed that gas and dining out were also much more expensive than where we live. However, groceries and sales tax were comparable. I’m not sure how utilities are, I’m not moving there, we were just visiting. I’d probably go and visit any place that I was seriously considering to get a good idea of those types of things. Then I’d also research utilities, property tax, car and homeowners insurance, and any other items specific to my lifestyle (like gym memberships, mass transit prices, daycare, etc.) and set up a budget specific to your life. I don’t think a detailed CPI is nearly as useful as creating a budget based on things you need and spend money on.
Gnomon
Posts: 47
Joined: Fri Sep 17, 2021 8:11 pm

Re: Cost of Living Comparison Data

Post by Gnomon »

I'm struggling with this too, since I plan to relocate to a higher cost of living city after retiring (possibly this year, but the continuing Covid complications are probably going to delay it).

There are enough variables already when trying to figure out your retirement readiness if you were planning to stay put. But moving to a higher COL area for retirement adds not just a fuzzy multiplier on annual expenses for the rest of your life, but a one-time lump-sum expense for the cost of a functionally equivalent but higher priced house and the ongoing annual property tax expenses.

I haven't found any single great source for trying to figure this out, but I can provide several links to websites with CoL data and comparison tools. Some of these are pretty simplistic or include pretty small lists of cities to compare, while others include a lot of variables and have a wealth of other related materials and data to peruse. But many of them are thin on explaining the sources for their information so I plan to do some averaging across multiple sources since I can't think of what else to do.

https://www.expatistan.com/cost-of-living/city
https://www.numbeo.com/cost-of-living/
https://advisorsmith.com/data/coli/
https://www.nerdwallet.com/cost-of-living-calculator
https://www.epi.org/resources/budget/
https://money.cnn.com/calculator/pf/cos ... index.html
https://www.move.org/lowest-cost-of-living-by-us-city/

There's also a lot of info on the bls.gov website, split out by metropolitan area.

Ideally, I'd like to have separate numbers for the regular ongoing living expenses excluding housing and medical premiums so I can deal with those separately. In the end, I'm going to come away with a dollar amount difference for the likely higher priced house as a 1-time expense, and a percentage increase in regular living expenses (excluding housing and medical premiums), and handle the medical premiums and its higher-still inflation rate separately.
User avatar
Watty
Posts: 24934
Joined: Wed Oct 10, 2007 3:55 pm

Re: Cost of Living Comparison Data

Post by Watty »

The Man with the Axe wrote: Sun Jan 23, 2022 11:51 pm Most of the online calculators appear to aggregate various components of the COL (e.g., housing, healthcare, education, entertainment, etc.), assign a weight to each one and then deliver a single aggregated increase/decrease in COL, expressed as a percentage. (For example, the COL in City 1 is 120% of the COL in City 2.)
A huge problem is that especially for housing the cost of living can be very different in different parts of the city. Property taxes can also vary a lot. Where I live property taxes can be double or even triple in a different county that is only ten miles away from where my house is.

Even for things like groceries and restaurants the prices in a downtown urban area can be higher than out in the suburbs.
phxjcc
Posts: 1267
Joined: Thu Aug 23, 2018 3:47 pm

Re: Cost of Living Comparison Dat

Post by phxjcc »

I have lived in …
7 towns in CA
3 towns in AZ
2 towns in NJ
1 town in NY
2 towns in CO
2 towns in NZ

TDY’d in TX, AR, IL, OH

My advice is to forget the “weight” nonsense and find out EXACTLY how much it costs to live where you want.
Housing…pay attention to property tax eccentricities of each location.

For example…in cities west of Phoenix prop tax is about 1%, NE Scottsdale prop tax is about 0.4%.
Great right? Well, yes, if you are empty nesters…otherwise, junior has a 1/2 hr drive to high school. Weigh the cost of a car vs. prop tax.
MOVING TO THE DESERT?
Utility providers can vary between cities and make a 30% difference In electricity bill.
A BIG deal if you are running A/C 7x24 for 4 months a year.

That nice little retirement community?…the one built in the 80’s in the unincorporated area?
They had their own sewage treatment plant to serve just that community since there was nothing else around at the time it was built.
The state just condemned it and they have to tie into the city sewage system.
Your monthly water bill just went up $100/month.

But that same town…has a brand new VO-TECH school…free to all residents, so if junior wants to learn a trade…maybe that $100/month isn’t bad.(?)

….and on and on.

Success isn’t IN the details…success IS the details.

…and especially healthcare…I don’t understand why there would be a big difference in costs for the majority in the 80/20 or 90/10 cases. For the 20/10% scenarios, ok. But if you have X disease, that differs from Y disease and will not be factored into any mass media website.

Entertainment? Really? I guess that I don’t go out much…and I’ll give you that opening night at the Met vs. open Mic night at Billy Bob’s are different costs…but that is more a function of individual preference vs. geographic location. If you are planning to go to Broadway once a week…you can easily determine how much that costs.

Take a look at your budget and perform a triage….
What do YOU spend the most money on NOW.

Then do some original research yourself, because no one else is you.

AZ gas is a lot cheape than CA gas, but it is also 5 hours to get to the beach from Phoenix…so what is YOUR cost if you like the beach?

Ad nauseum….
Admiral
Posts: 4156
Joined: Mon Oct 27, 2014 12:35 pm

Re: Cost of Living Comparison Data

Post by Admiral »

I would think this is a nearly impossible quest. Even if you figured it all out... what about inflation? Inflation is running 7%. But where I live it's reported to be 2.5%. To me, it's almost invisible except groceries, which are only 10% of my budget. Gas is also very expensive here, but...I have no commute. And so on.

I would think you just need wiggle room in your budget to account for discrepancies, with knowledge that in coastal cities things cost more (sometimes a lot more).
OrangeKiwi
Posts: 68
Joined: Tue Oct 01, 2019 8:10 pm

Re: Cost of Living Comparison Data

Post by OrangeKiwi »

One factor you can check is the city/county/state government’s debt per taxpayer figures, including underfunded defined benefit pension plans and retiree healthcare.

Of course, this would have to be normalized against projected population growth (perhaps even negative) of higher income earners, since having more of those will allow more distribution of the debt, resulting in less tax liability.

A good resource for state level data is here:

https://www.truthinaccounting.org/news/ ... tates-2021

And for major cities, here:

https://www.truthinaccounting.org/news/ ... ities-2022

But the financial reports of other city/county governments should be publicly available. However, cities/counties use extra rosy assumptions to make their numbers look better than they are, so I would add 30% to their underfunded amount to get a more realistic figure.

This comes from a very rough rule of thumb that changing the assumed discount rate for pension liabilities by 1% changes the pension liabilities by 15%. So if a city assumes a discount rate, or expected return on assets of 7.5%, and the law requires non taxpayer funded pension plans to use yield curves of high grade corporate bonds, which are around 4%, then I assume the reality is somewhere in the middle.
Post Reply