Is it worth to relocate for retirement?

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PoppyA
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Re: Is it worth to relocate for retirement?

Post by PoppyA »

As I have said in other “relocation “ threads, don’t move to a new place and vote for government subsidies for people, places, and things and expect it to be different from where you left. It is a low tax area for a reason, and the place you leave is a high tax place for a reason!
523HRR
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Re: Is it worth to relocate for retirement?

Post by 523HRR »

Following our retirement, we moved from Connecticut to Florida in June 2018. Seeing this post, I went back and had a quick look at certain pertinent expenses during our first full year in FL compared with our last full year in CT. As you might expect, there are significant financial benefits to making such a move. Our state income tax and car taxes in CT during our final year were $27,046 and $1,289, respectively. These have now gone to zero. Total utilities (Elec,Water,Sewer,Gas,Cable) are about 2% less overall in FL. [Note: CT has among the most expensive electricity rates in the country, so despite 56% higher kWh usage here in FL (larger home), our electricity bills for the year are basically the same as CT as the cost per kWh is 34% less in FL (11 cents vs. 17 cents)]. CT also has among the highest gasoline taxes in the country, so filling the tank is way cheaper here in FL, saving us about $1,000 per year. Even property taxes are less burdensome for us here in FL. Despite building a larger home (+500 sf) in FL and approximately 2x the home value that we had in CT, our property taxes are now almost $1,000 less. [And the Florida homestead exemption caps the annual increase at 3%.] The only expense that has gone up notably in FL is our home insurance...about $1,000 more per year (includes ~$500 per year for flood insurance, plus larger and higher value home here so was to be expected). So on an annual basis, we are saving about $30K on these key expenses by being in Florida, freeing up funds for club memberships, etc. Perhaps even more importantly, our estate was looking at >$1 million in estate taxes in CT, which will now be zero. Financially speaking, this move was a no brainer. Bonus: we love it here!
Normchad
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Re: Is it worth to relocate for retirement?

Post by Normchad »

PoppyA wrote: Sat Aug 22, 2020 5:27 pm As I have said in other “relocation “ threads, don’t move to a new place and vote for government subsidies for people, places, and things and expect it to be different from where you left. It is a low tax area for a reason, and the place you leave is a high tax place for a reason!
That’s a very good point. Our daughter went to college in a low cost state. After four years of visiting there, it’s really interesting to me how different the basic roadway and storm water management infrastructure is. I live in northern Virginia, and pay quite a bit of property taxes. But our roads are very well maintained, and the grass/trees next to road ways etc is manicured. And we keep building $100M high schools around here......
marcopolo
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Re: Is it worth to relocate for retirement?

Post by marcopolo »

surfstar wrote: Sat Aug 22, 2020 12:52 pm
augusto wrote: Fri Aug 21, 2020 12:23 pm
This is not a life style question, it is purely a financial question.

Thank you!
That seems to be the wrong priority. Figure out where you want to live (i.e. where you'll be happy-er -est) then figure out if you can afford it. If yes, done. If no, look into downsizing, reducing expenses, working longer, or the next place on the list where you'd want to live.
Strongly agree with this.

Relocating for retirement has been very much worth it for us. We moved from a northeast state to Hawaii.

The lifestyle, climate, and many other factors were high priorities that led us to select this place.

A bit more expensive to live here, but absolutely worth it for us.
Once in a while you get shown the light, in the strangest of places if you look at it right.
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Ged
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Re: Is it worth to relocate for retirement?

Post by Ged »

FIREchief wrote: Fri Aug 21, 2020 12:49 pm Don't forget to consider availability of medical care. That nice hospital with access to highly skilled specialists that is only 30 minutes away doesn't mean anything.....until you need it. 8-)
I suppose I could have a larger house and lower other costs, especially real estate tax if I were to move from my current location in NJ. However I'm also living near my children and long term friends, and a hospital and the associated penumbra of specialists is 10 minutes away.

So the answer for me is that it would not be worth it.

I do think this is a question that each person has to decide for himself.
GreenLawn
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Re: Is it worth to relocate for retirement?

Post by GreenLawn »

Depends on how much money you have. In my case, selling my house in a HCOL area allowed me to retire earlier than planned from the equity. Almost anywhere in the country is cheaper than where I used to live so plenty of options. I wanted to move anyway, I've lived on the west coast all of my life so I'm ready for something different. Currently I'm enjoying southern hospitality, though not the bugs, heat and humidity, so the search will continue. Have to say I'm amazed at the cheap electricity in Florida, 2000 sq. ft all electric home with A/C running day and night and the highest electric bill has been 135/mo. That's for cooking, water heater, washer, dryer, the works.

Pardon me, I need to go out and kill some fire ants. Geeez :annoyed
GreenLawn
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Re: Is it worth to relocate for retirement?

Post by GreenLawn »

Gnirk wrote: Sat Aug 22, 2020 5:01 pm We've talked about moving for financial and/or weather-related reasons, but in reality there is no way I will leave family and friends who are our support network. Besides, most of the warm-weather areas have things I want nothing to do with: alligators, poisonous snakes, humidity, very hot summers, high traffic (San Diego area). Did I say humidity? We've been snowbirds for the past 21 years, and when we are done with that, we will stay in Washington.
Alligators get such a bad rap! I consider unleashed neighborhood dogs more of a personal threat. I live on a lake and I love my gators! So prehistoric looking and very skittish, almost always flee before I get anywhere close. You need to take some sensible precautions like don't walk a small tasty dog right on the water's edge, but other than that they're one of my favorite features of living here.
7eight9
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Re: Is it worth to relocate for retirement?

Post by 7eight9 »

GreenLawn wrote: Sat Aug 22, 2020 7:19 pm
Gnirk wrote: Sat Aug 22, 2020 5:01 pm We've talked about moving for financial and/or weather-related reasons, but in reality there is no way I will leave family and friends who are our support network. Besides, most of the warm-weather areas have things I want nothing to do with: alligators, poisonous snakes, humidity, very hot summers, high traffic (San Diego area). Did I say humidity? We've been snowbirds for the past 21 years, and when we are done with that, we will stay in Washington.
Alligators get such a bad rap! I consider unleashed neighborhood dogs more of a personal threat. I live on a lake and I love my gators! So prehistoric looking and very skittish, almost always flee before I get anywhere close. You need to take some sensible precautions like don't walk a small tasty dog right on the water's edge, but other than that they're one of my favorite features of living here.
The gator might consider the dog to be just an amuse bouche ...

Body of Woman Attacked by an Alligator Is Found in Florida
The woman, identified as Shizuka Matsuki, 47, of Plantation, Fla., was last seen walking her dogs near a lake in the Silver Lakes Rotary Nature Park in Davie, about 25 miles north of Miami, on Friday morning, the Davie Police Department said.
A man saw her walking her dogs there, and then minutes later saw the dogs running loose, one of them injured, reported WPLG, a local ABC affiliate. He called the police.

https://www.nytimes.com/2018/06/09/us/f ... woman.html
I guess it all could be much worse. | They could be warming up my hearse.
oldfort
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Re: Is it worth to relocate for retirement?

Post by oldfort »

Normchad wrote: Fri Aug 21, 2020 12:34 pm
augusto wrote: Fri Aug 21, 2020 12:23 pm In terms of optimization, is it worth to move to a “retiree friendly” state like Florida, Arizona, etc, from a northern state like Massachusetts?

In your opinion and in general terms, what are the rough factors that determine if one should move from one state to another “retiree friendly” state to get a better value for their money? If there is no heirs, what decides this question net worth or annual income of retiree?

This is not a life style question, it is purely a financial question.

Thank you!
I’m planning to relocate in retirement, although finances aren’t a driving force in that decision.

In terms of cost of living, I expect my next house will be cheaper. But a Toyota Camry will cost the same. My prescriptions will cost the same. So I don’t anticipate a big savings from stuff that I buy.

I hear taxes in MA are very high, so you probably would save a bunch by relocating to TX, FL, etc.

I do wonder though, for regular folks, how great those savings really are. I’ll be retired, I’m not planning to have a lot of taxable income after I retire. (I’m planning to carefully manage my withdrawals to minimize federal income taxes).

It would be good to hear from folks that have done this, how much dollars they actually save in a year by moving.
By far, the biggest cost savings will be housing. For some people, the housing difference can be significant. If you sell your $1.2M home in a VHCOL, move to a $200k place in a LCOL place, and then invest the $1M, you have an extra $40k/year in retirement income with the 4% rule. You're right most non-housing expenses don't vary much between areas if you want to live the same lifestyle.
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tooluser
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Re: Is it worth to relocate for retirement?

Post by tooluser »

augusto wrote: Sat Aug 22, 2020 2:10 pm Thanks everybody that commented in this thread.  :happy Very insightful and valuable opinions shared to all of us that makes this forum and its people great!  Yes, of course this is a lifestyle decision.  I just wanted to focus my question on the financial aspect.
There is nothing like running the numbers. It takes some research. Your current state tax situation should be known by your most recent tax return, property tax bill, purchase receipts, and perhaps personal property tax bill (cars, boats, etc.)

Then you can start with a site like https://www.taxadmin.org/current-tax-rates to get an idea of what each state's tax structure is like.

If you can narrow down your list, then do some more research at that particular state's tax site. You can find information on property taxes, income taxes, standard deductions/exemptions, different income stream tax rates, sales taxes, senior citizen tax programs, tax holidays, etc.

In my own research I have found that property taxes are the most variable and hidden. For example, Michigan has high property tax rates, but real estate values are generally comparatively low, and the rates are calculated based on half the assessed value. Then there are school district variations based on voted indebtedness (called a "millage" in Michigan). Yet they have an online property tax estimator that takes all of that into account, so you can get a very good idea of property taxes in any given municipality.

So I think in the end, you want to narrow the choice of state down to a few that you really want to focus on, and then go from there so you don't waste time looking at places you don't really want to move to.
joetro29
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Re: Is it worth to relocate for retirement?

Post by joetro29 »

I was surprised that WA has an estate tax. Otherwise it’s pretty good. I’m a long term renter in TX, and it’s hard to beat!
oldfort
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Re: Is it worth to relocate for retirement?

Post by oldfort »

Watty wrote: Fri Aug 21, 2020 1:20 pm Everyone has heirs even if they will be leaving money to a charity. Some people may not really care just how much is leftover but they would still have heirs.
Some people do have no heirs. If you have no will, and no specified beneficiary on the accounts, then the money doesn't go to charity. In my state, if you die without a will, there's a specified order of ten categories of people in line to inherit. If you have no living relatives in those ten categories, then the money escheats to the state. I guess you could consider the state government as an heir in such cases.
Last edited by oldfort on Sat Aug 22, 2020 9:55 pm, edited 1 time in total.
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Tejfyy
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Re: Is it worth to relocate for retirement?

Post by Tejfyy »

delamer wrote: Fri Aug 21, 2020 1:06 pm I don’t understand how this purely can be a financial question. There aren’t enough cost-of living savings in the world to get me to move to some states/areas.
Ditto
GreenLawn
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Re: Is it worth to relocate for retirement?

Post by GreenLawn »

7eight9 wrote: Sat Aug 22, 2020 7:32 pm
GreenLawn wrote: Sat Aug 22, 2020 7:19 pm
Gnirk wrote: Sat Aug 22, 2020 5:01 pm We've talked about moving for financial and/or weather-related reasons, but in reality there is no way I will leave family and friends who are our support network. Besides, most of the warm-weather areas have things I want nothing to do with: alligators, poisonous snakes, humidity, very hot summers, high traffic (San Diego area). Did I say humidity? We've been snowbirds for the past 21 years, and when we are done with that, we will stay in Washington.
Alligators get such a bad rap! I consider unleashed neighborhood dogs more of a personal threat. I live on a lake and I love my gators! So prehistoric looking and very skittish, almost always flee before I get anywhere close. You need to take some sensible precautions like don't walk a small tasty dog right on the water's edge, but other than that they're one of my favorite features of living here.
The gator might consider the dog to be just an amuse bouche ...

Body of Woman Attacked by an Alligator Is Found in Florida
The woman, identified as Shizuka Matsuki, 47, of Plantation, Fla., was last seen walking her dogs near a lake in the Silver Lakes Rotary Nature Park in Davie, about 25 miles north of Miami, on Friday morning, the Davie Police Department said.
A man saw her walking her dogs there, and then minutes later saw the dogs running loose, one of them injured, reported WPLG, a local ABC affiliate. He called the police.

https://www.nytimes.com/2018/06/09/us/f ... woman.html
Sure, with a million alligators in Florida there will bound to be occasional incidents. Still, way more Floridians are killed by humans than gators. There are 21 million humans in Florida, and most of them are unrestrained and roaming freely :shock:
smitcat
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Re: Is it worth to relocate for retirement?

Post by smitcat »

7eight9 wrote: Sat Aug 22, 2020 7:32 pm
GreenLawn wrote: Sat Aug 22, 2020 7:19 pm
Gnirk wrote: Sat Aug 22, 2020 5:01 pm We've talked about moving for financial and/or weather-related reasons, but in reality there is no way I will leave family and friends who are our support network. Besides, most of the warm-weather areas have things I want nothing to do with: alligators, poisonous snakes, humidity, very hot summers, high traffic (San Diego area). Did I say humidity? We've been snowbirds for the past 21 years, and when we are done with that, we will stay in Washington.
Alligators get such a bad rap! I consider unleashed neighborhood dogs more of a personal threat. I live on a lake and I love my gators! So prehistoric looking and very skittish, almost always flee before I get anywhere close. You need to take some sensible precautions like don't walk a small tasty dog right on the water's edge, but other than that they're one of my favorite features of living here.
The gator might consider the dog to be just an amuse bouche ...

Body of Woman Attacked by an Alligator Is Found in Florida
The woman, identified as Shizuka Matsuki, 47, of Plantation, Fla., was last seen walking her dogs near a lake in the Silver Lakes Rotary Nature Park in Davie, about 25 miles north of Miami, on Friday morning, the Davie Police Department said.
A man saw her walking her dogs there, and then minutes later saw the dogs running loose, one of them injured, reported WPLG, a local ABC affiliate. He called the police.

https://www.nytimes.com/2018/06/09/us/f ... woman.html
Pehaps look up the number of deaths each year attributable to these animals and see what you get:
- sharks
- bees
- alligators
- cows
- dogs
Not what you might think....
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LadyGeek
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Re: Is it worth to relocate for retirement?

Post by LadyGeek »

This thread is now in the Personal Consumer Issues forum (where to live).
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Normchad
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Re: Is it worth to relocate for retirement?

Post by Normchad »

smitcat wrote: Sun Aug 23, 2020 11:49 am
7eight9 wrote: Sat Aug 22, 2020 7:32 pm
GreenLawn wrote: Sat Aug 22, 2020 7:19 pm
Gnirk wrote: Sat Aug 22, 2020 5:01 pm We've talked about moving for financial and/or weather-related reasons, but in reality there is no way I will leave family and friends who are our support network. Besides, most of the warm-weather areas have things I want nothing to do with: alligators, poisonous snakes, humidity, very hot summers, high traffic (San Diego area). Did I say humidity? We've been snowbirds for the past 21 years, and when we are done with that, we will stay in Washington.
Alligators get such a bad rap! I consider unleashed neighborhood dogs more of a personal threat. I live on a lake and I love my gators! So prehistoric looking and very skittish, almost always flee before I get anywhere close. You need to take some sensible precautions like don't walk a small tasty dog right on the water's edge, but other than that they're one of my favorite features of living here.
The gator might consider the dog to be just an amuse bouche ...

Body of Woman Attacked by an Alligator Is Found in Florida
The woman, identified as Shizuka Matsuki, 47, of Plantation, Fla., was last seen walking her dogs near a lake in the Silver Lakes Rotary Nature Park in Davie, about 25 miles north of Miami, on Friday morning, the Davie Police Department said.
A man saw her walking her dogs there, and then minutes later saw the dogs running loose, one of them injured, reported WPLG, a local ABC affiliate. He called the police.

https://www.nytimes.com/2018/06/09/us/f ... woman.html
Pehaps look up the number of deaths each year attributable to these animals and see what you get:
- sharks
- bees
- alligators
- cows
- dogs
Not what you might think....
Since it’s Florida, might also look up swimming pools.
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JoeRetire
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Re: Is it worth to relocate for retirement?

Post by JoeRetire »

augusto wrote: Fri Aug 21, 2020 12:23 pm In terms of optimization, is it worth to move to a “retiree friendly” state like Florida, Arizona, etc, from a northern state like Massachusetts?

This is not a life style question, it is purely a financial question.
It's not clear what you mean by "optimization" in this context. Where you live is always a lifestyle question, perhaps with some finance mixed in. I assume your lifestyle remains important to you, even in retirement.

I have lived in Massachusetts, and visited Florida. I'd be willing to live in the former, but definitely not in the latter. Your mileage may vary.

If the only thing I cared about was taxes, I'd choose to live elsewhere. Since I prefer to live an enjoyable retirement and have enough money, I currently live in Maine.
Last edited by JoeRetire on Sun Aug 23, 2020 1:42 pm, edited 1 time in total.
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John Z
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Re: Is it worth to relocate for retirement?

Post by John Z »

Scooter57 wrote: Sat Aug 22, 2020 12:15 pm ... New Hampshire which has the reputation for having no income tax has a 6% tax on investment income, which is more than MA's 5% tax on all but short term gains. Bogleheads should love that only short term gains are taxed at a high rate in MA which encourages NOT fooling around with the portfolio...
Small correction:
Per the NH Department of Revenue:
"It is a 5% tax on interest and dividends income. ... All New Hampshire residents and fiduciaries whose gross interest and dividends income, from all sources, exceeds $2,400 annually ($4800 for joint filers)."

Having lived in NH for 50 years we've only paid these taxes a couple of years when interest rates were much higher and we had more of our assets in bank accounts/CDs. Other than this tax, there is a nasty 9% Meals and Rooms and Auto (Rentals) Tax which is aimed at visitors. Also several specialized taxes (gravel extraction, tobacco, timber, real estate transfer and a few more).

NH real estate taxes are brutal compared to MA and housing prices sort of reflect this: Houses tend to be more expensive in MA with lower real estate taxes and NH houses lower but higher real estate taxes.

Many MA border residents love to shop in NH because there is no sales tax unless the item is delivered in MA. It's been bad enough that MA has asked NH to collect MA taxes for obvious MA buyers (tires, auto repair).
Scooter57
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Re: Is it worth to relocate for retirement?

Post by Scooter57 »

Did NH lower that interest and dividend tax? I am almost certain it was 6% back on 2005-9 when my mom lived in assisted living there and I was responsible for her finances. They have very nice assisted living places there, much nicer than those in MA. But culturally there is a whole lot more going on in MA at least in the western part and the food is far, far better.
John Z
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Re: Is it worth to relocate for retirement?

Post by John Z »

Sorry, it's been so long that I didn't recall what the rate is or was that's why I did a quick check and found that info.
GreenLawn
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Re: Is it worth to relocate for retirement?

Post by GreenLawn »

7eight9 wrote: Sat Aug 22, 2020 7:32 pm
GreenLawn wrote: Sat Aug 22, 2020 7:19 pm
Gnirk wrote: Sat Aug 22, 2020 5:01 pm We've talked about moving for financial and/or weather-related reasons, but in reality there is no way I will leave family and friends who are our support network. Besides, most of the warm-weather areas have things I want nothing to do with: alligators, poisonous snakes, humidity, very hot summers, high traffic (San Diego area). Did I say humidity? We've been snowbirds for the past 21 years, and when we are done with that, we will stay in Washington.
Alligators get such a bad rap! I consider unleashed neighborhood dogs more of a personal threat. I live on a lake and I love my gators! So prehistoric looking and very skittish, almost always flee before I get anywhere close. You need to take some sensible precautions like don't walk a small tasty dog right on the water's edge, but other than that they're one of my favorite features of living here.
The gator might consider the dog to be just an amuse bouche ...

Body of Woman Attacked by an Alligator Is Found in Florida
The woman, identified as Shizuka Matsuki, 47, of Plantation, Fla., was last seen walking her dogs near a lake in the Silver Lakes Rotary Nature Park in Davie, about 25 miles north of Miami, on Friday morning, the Davie Police Department said.
A man saw her walking her dogs there, and then minutes later saw the dogs running loose, one of them injured, reported WPLG, a local ABC affiliate. He called the police.

https://www.nytimes.com/2018/06/09/us/f ... woman.html
For all you alligator haters, here's a choice morsel at tcpalm.com just today:

"Mark Johnson, 61, has lived his entire life around alligators. That's why he was so surprised when one tried to grab him and drag him into a canal behind his southeastern Port St. Lucie home.
Johnson managed to get the gator to let go of his leg by digging both of his index fingers into the hungry reptile's eye sockets. Even then, he felt lucky to get away alive. "

As usual, there was a dog involved. Full story at the news site, complete with color photos of the wound. Dogs and gators are a bad mix, do not offer up your dog to a gator!
NJdad6
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Re: Is it worth to relocate for retirement?

Post by NJdad6 »

There have been a number of posts here with a similar theme. If the only criteria you are considering is COL/savings, it depends on where you are moving from and to. For some the real savings may be minimal. For others it can be significant. I ran numbers for a few places where I would like to live. They are all “higher cost of living areas” in low/average COL states. In every instance I would have substantial savings in each of them. That is because I live in a HCOL area of NJ.

Savings would come from being able to buy a comparable home for about 20%-30% less, and either significantly lower property taxes (in some cases 70%-80% less) with a similar or lower state tax or a higher property tax (still 40-50% less) and no state tax. All of these areas have excellent schools (good for home value), lots to do and multiple choices for great healthcare. Also some of the states with state taxes have significant exclusions for retirement income. Another thing to consider is the state death tax if you have significant assets.

Other expenses for us are pretty consistent no matter where we are looking. Things like utilities, gas, groceries, etc. Any differences are relatively small (a grand or so a year). There can be some exceptions like home insurance depending on the location of the house (flood zone,close to ocean, etc).

This is important to me because we will be moving at some point. My wife and I don’t really like NJ and are looking to leave. The significant cost savings at the places we would like to be are a huge bonus. Some may be willing to pay higher taxes, etc. because they really like where they live. Nothing wrong with either choice.
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Re: Is it worth to relocate for retirement?

Post by willthrill81 »

Financially, the big variables are taxes, cost of living, and insurance. Collectively, those can easily result in tens of thousands of dollars saved every year living in one place instead of another.

Whether those costs are 'worth' moving for is a matter of opinion.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
Tingting1013
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Re: Is it worth to relocate for retirement?

Post by Tingting1013 »

NJdad6 wrote: Tue Sep 15, 2020 4:12 pm Savings would come from being able to buy a comparable home for about 20%-30% less, and either significantly lower property taxes (in some cases 70%-80% less) with a similar or lower state tax or a higher property tax (still 40-50% less) and no state tax.
Here is my problem. After decades of sacrificing in a smaller than desired house in VHCOL CA, the last thing we want to do is buy a “comparable home” in retirement. If we’re going to move, we’re going to improve our quality of life, isn’t that the whole point?

And so when I look at $2M houses in the Midwest to replace my $2M house in the Bay Area, the increase in space is obvious but the property taxes double or even triple what I pay in CA. Income taxes are also around 5-6% flat rate, not much lower than my CA income taxes.

In the end I don’t save much money at all by moving.
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Re: Is it worth to relocate for retirement?

Post by iamblessed »

Tingting1013 wrote: Tue Sep 15, 2020 6:28 pm
NJdad6 wrote: Tue Sep 15, 2020 4:12 pm Savings would come from being able to buy a comparable home for about 20%-30% less, and either significantly lower property taxes (in some cases 70%-80% less) with a similar or lower state tax or a higher property tax (still 40-50% less) and no state tax.
Here is my problem. After decades of sacrificing in a smaller than desired house in VHCOL CA, the last thing we want to do is buy a “comparable home” in retirement. If we’re going to move, we’re going to improve our quality of life, isn’t that the whole point?

And so when I look at $2M houses in the Midwest to replace my $2M house in the Bay Area, the increase in space is obvious but the property taxes double or even triple what I pay in CA. Income taxes are also around 5-6% flat rate, not much lower than my CA income taxes.

In the end I don’t save much money at all by moving.
That 2M house might be 1M or less in the Midwest. You can go up in size some and still save a lot of money.
Tingting1013
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Re: Is it worth to relocate for retirement?

Post by Tingting1013 »

iamblessed wrote: Tue Sep 15, 2020 6:43 pm
Tingting1013 wrote: Tue Sep 15, 2020 6:28 pm
NJdad6 wrote: Tue Sep 15, 2020 4:12 pm Savings would come from being able to buy a comparable home for about 20%-30% less, and either significantly lower property taxes (in some cases 70%-80% less) with a similar or lower state tax or a higher property tax (still 40-50% less) and no state tax.
Here is my problem. After decades of sacrificing in a smaller than desired house in VHCOL CA, the last thing we want to do is buy a “comparable home” in retirement. If we’re going to move, we’re going to improve our quality of life, isn’t that the whole point?

And so when I look at $2M houses in the Midwest to replace my $2M house in the Bay Area, the increase in space is obvious but the property taxes double or even triple what I pay in CA. Income taxes are also around 5-6% flat rate, not much lower than my CA income taxes.

In the end I don’t save much money at all by moving.
That 2M house might be 1M or less in the Midwest. You can go up in size some and still save a lot of money.
A $1M house in the Midwest at 2% property tax costs the same as a $2M house in the Bay Area at 1% property tax.

Also, the $2M house is $1.5M land and $0.5M house, while the Midwest $1M house might be 80% house or more. Maintenance and insurance costs are therefore higher in the Midwest.
MindBogler
Posts: 1031
Joined: Wed Apr 17, 2013 12:05 pm

Re: Is it worth to relocate for retirement?

Post by MindBogler »

Tingting1013 wrote: Tue Sep 15, 2020 7:02 pm A $1M house in the Midwest at 2% property tax costs the same as a $2M house in the Bay Area at 1% property tax.

Also, the $2M house is $1.5M land and $0.5M house, while the Midwest $1M house might be 80% house or more. Maintenance and insurance costs are therefore higher in the Midwest.
You've kept the wrong variable constant in your analysis which is why the result is nonsensical.
Tingting1013
Posts: 436
Joined: Mon Aug 24, 2020 5:44 pm

Re: Is it worth to relocate for retirement?

Post by Tingting1013 »

MindBogler wrote: Tue Sep 15, 2020 7:21 pm
Tingting1013 wrote: Tue Sep 15, 2020 7:02 pm A $1M house in the Midwest at 2% property tax costs the same as a $2M house in the Bay Area at 1% property tax.

Also, the $2M house is $1.5M land and $0.5M house, while the Midwest $1M house might be 80% house or more. Maintenance and insurance costs are therefore higher in the Midwest.
You've kept the wrong variable constant in your analysis which is why the result is nonsensical.
Which variable is that?
LittleMaggieMae
Posts: 387
Joined: Mon Aug 12, 2019 9:06 pm

Re: Is it worth to relocate for retirement?

Post by LittleMaggieMae »

I'm pretty sure the States tax different streams of income differently. If you have a pension - it might not be taxed at all in your "home State" but be taxed differently depending on the State you want to move to. Same goes for SS - States tax it differently. You'll need to determine your income streams and then go state by state to see which one(s) are most beneficial to your income situation. And THEN you will need to look at the Cost of Living in the places in those States that you'd like to live. If you 'save' 5K in income taxes - but if you are nickeled and dimed by local area expenses/taxes to the tune of 5K - you've only got a tax savings in "name" not in actuality.

If you must choose a place to live to maximize your retirement income (because you don't have enough retirement income) then you need to evaluate your income streams and each State/area to see where you might move.

If you have enough retirement income - I don't see how deciding to relocate or not ISN"T about quality of life/lifestyle.


FWIW: I've have relatives who moved away from the taxes here to Florida (so much lower taxes!). Oddly here and the city in Florida they moved to have just about the same "Cost of Living" costs - the money is just distributed to different 'buckets'. So, they basically switched complaining about high property taxes and high taxes on gas for their car to for complaining about different high expenses (eating out! any sort of entertainment! any work done on their house! repairs to their car! a bunch of new monthly expenses with their home (pool, bugs, landscaping, HOA, etc..). But dang it! their property taxes are low! it's a WIN!)
Wanderingwheelz
Posts: 493
Joined: Mon Mar 04, 2019 9:52 am

Re: Is it worth to relocate for retirement?

Post by Wanderingwheelz »

I’m not retired yet, but Delaware is a pretty good state to retire early in because we don’t have a sales tax and the property taxes are very low. Those are the two most important criteria for me since I am still a healthy consumer and the idea of paying $14,000/yr in tax because my house is located in the wrong place would be enough to make me sick. Plus, I can walk to the beach and the mountains are only 200 miles to the west.

I am intrigued by Tennessee, though.
palanzo
Posts: 1411
Joined: Thu Oct 10, 2019 4:28 pm

Re: Is it worth to relocate for retirement?

Post by palanzo »

Normchad wrote: Sat Aug 22, 2020 6:00 pm
PoppyA wrote: Sat Aug 22, 2020 5:27 pm As I have said in other “relocation “ threads, don’t move to a new place and vote for government subsidies for people, places, and things and expect it to be different from where you left. It is a low tax area for a reason, and the place you leave is a high tax place for a reason!
That’s a very good point. Our daughter went to college in a low cost state. After four years of visiting there, it’s really interesting to me how different the basic roadway and storm water management infrastructure is. I live in northern Virginia, and pay quite a bit of property taxes. But our roads are very well maintained, and the grass/trees next to road ways etc is manicured. And we keep building $100M high schools around here......
Well we pay more taxes in CA than VA and our road and infrastructure have been falling apart for decades.
iamblessed
Posts: 738
Joined: Sat Jun 09, 2018 11:52 am

Re: Is it worth to relocate for retirement?

Post by iamblessed »

Tingting1013 wrote: Tue Sep 15, 2020 7:02 pm
iamblessed wrote: Tue Sep 15, 2020 6:43 pm
Tingting1013 wrote: Tue Sep 15, 2020 6:28 pm
NJdad6 wrote: Tue Sep 15, 2020 4:12 pm Savings would come from being able to buy a comparable home for about 20%-30% less, and either significantly lower property taxes (in some cases 70%-80% less) with a similar or lower state tax or a higher property tax (still 40-50% less) and no state tax.
Here is my problem. After decades of sacrificing in a smaller than desired house in VHCOL CA, the last thing we want to do is buy a “comparable home” in retirement. If we’re going to move, we’re going to improve our quality of life, isn’t that the whole point?

And so when I look at $2M houses in the Midwest to replace my $2M house in the Bay Area, the increase in space is obvious but the property taxes double or even triple what I pay in CA. Income taxes are also around 5-6% flat rate, not much lower than my CA income taxes.

In the end I don’t save much money at all by moving.
That 2M house might be 1M or less in the Midwest. You can go up in size some and still save a lot of money.
A $1M house in the Midwest at 2% property tax costs the same as a $2M house in the Bay Area at 1% property tax.

Also, the $2M house is $1.5M land and $0.5M house, while the Midwest $1M house might be 80% house or more. Maintenance and insurance costs are therefore higher in the Midwest.
Even if everything you say is true you still have 1M to help you with higher maintenance, insurance costs and taxes.
Tingting1013
Posts: 436
Joined: Mon Aug 24, 2020 5:44 pm

Re: Is it worth to relocate for retirement?

Post by Tingting1013 »

iamblessed wrote: Tue Sep 15, 2020 8:32 pm
Tingting1013 wrote: Tue Sep 15, 2020 7:02 pm
iamblessed wrote: Tue Sep 15, 2020 6:43 pm
Tingting1013 wrote: Tue Sep 15, 2020 6:28 pm
NJdad6 wrote: Tue Sep 15, 2020 4:12 pm Savings would come from being able to buy a comparable home for about 20%-30% less, and either significantly lower property taxes (in some cases 70%-80% less) with a similar or lower state tax or a higher property tax (still 40-50% less) and no state tax.
Here is my problem. After decades of sacrificing in a smaller than desired house in VHCOL CA, the last thing we want to do is buy a “comparable home” in retirement. If we’re going to move, we’re going to improve our quality of life, isn’t that the whole point?

And so when I look at $2M houses in the Midwest to replace my $2M house in the Bay Area, the increase in space is obvious but the property taxes double or even triple what I pay in CA. Income taxes are also around 5-6% flat rate, not much lower than my CA income taxes.

In the end I don’t save much money at all by moving.
That 2M house might be 1M or less in the Midwest. You can go up in size some and still save a lot of money.
A $1M house in the Midwest at 2% property tax costs the same as a $2M house in the Bay Area at 1% property tax.

Also, the $2M house is $1.5M land and $0.5M house, while the Midwest $1M house might be 80% house or more. Maintenance and insurance costs are therefore higher in the Midwest.
Even if everything you say is true you still have 1M to help you with higher maintenance, insurance costs and taxes.
You’re confusing cash flow with net worth.

In CA I would have $2M in home equity.

In WI (for example) I would have $1M in home equity and $1M in my portfolio.

These two scenarios are, so far, financially equivalent. Now we need to calculate annual expenses. And I’m saying that the house in WI will have similar or higher ongoing expenses than the one in CA.
MindBogler
Posts: 1031
Joined: Wed Apr 17, 2013 12:05 pm

Re: Is it worth to relocate for retirement?

Post by MindBogler »

Tingting1013 wrote: Tue Sep 15, 2020 7:33 pm Which variable is that?
The home should be roughly equivalent before drawing any comparison. What has been done here is a straw man. I think if one does a reasonable, like-for-like comparison, one will find a $1M home built in many parts of the midwest would cost far in excess of $2M to duplicate in the Bay Area. In some cases you might be off by a factor of 10x.
Tingting1013
Posts: 436
Joined: Mon Aug 24, 2020 5:44 pm

Re: Is it worth to relocate for retirement?

Post by Tingting1013 »

MindBogler wrote: Tue Sep 15, 2020 8:57 pm
Tingting1013 wrote: Tue Sep 15, 2020 7:33 pm Which variable is that?
The home should be roughly equivalent before drawing any comparison. What has been done here is a straw man. I think if one does a reasonable, like-for-like comparison, one will find a $1M home built in many parts of the midwest would cost far in excess of $2M to duplicate in the Bay Area. In some cases you might be off by a factor of 10x.
Ok, the variable you are referring to then is the utility I get from the house. It’s true that that’s higher in the Midwest $1M house compared to the CA $2M house.

But that’s at least partially offset by higher operating costs, worse weather, and likely lower appreciation.
iamblessed
Posts: 738
Joined: Sat Jun 09, 2018 11:52 am

Re: Is it worth to relocate for retirement?

Post by iamblessed »

Tingting1013 wrote: Tue Sep 15, 2020 8:41 pm
iamblessed wrote: Tue Sep 15, 2020 8:32 pm
Tingting1013 wrote: Tue Sep 15, 2020 7:02 pm
iamblessed wrote: Tue Sep 15, 2020 6:43 pm
Tingting1013 wrote: Tue Sep 15, 2020 6:28 pm

Here is my problem. After decades of sacrificing in a smaller than desired house in VHCOL CA, the last thing we want to do is buy a “comparable home” in retirement. If we’re going to move, we’re going to improve our quality of life, isn’t that the whole point?

And so when I look at $2M houses in the Midwest to replace my $2M house in the Bay Area, the increase in space is obvious but the property taxes double or even triple what I pay in CA. Income taxes are also around 5-6% flat rate, not much lower than my CA income taxes.

In the end I don’t save much money at all by moving.
That 2M house might be 1M or less in the Midwest. You can go up in size some and still save a lot of money.
A $1M house in the Midwest at 2% property tax costs the same as a $2M house in the Bay Area at 1% property tax.

Also, the $2M house is $1.5M land and $0.5M house, while the Midwest $1M house might be 80% house or more. Maintenance and insurance costs are therefore higher in the Midwest.
Even if everything you say is true you still have 1M to help you with higher maintenance, insurance costs and taxes.
You’re confusing cash flow with net worth.

In CA I would have $2M in home equity.

In WI (for example) I would have $1M in home equity and $1M in my portfolio.

These two scenarios are, so far, financially equivalent. Now we need to calculate annual expenses. And I’m saying that the house in WI will have similar or higher ongoing expenses than the one in CA.
True but you can withdraw 4% a year from your 1M portfolio. Higher maintenance, insurance costs and taxes will not cost 40k.
Last edited by iamblessed on Tue Sep 15, 2020 9:19 pm, edited 1 time in total.
Tingting1013
Posts: 436
Joined: Mon Aug 24, 2020 5:44 pm

Re: Is it worth to relocate for retirement?

Post by Tingting1013 »

iamblessed wrote: Tue Sep 15, 2020 9:15 pm
Tingting1013 wrote: Tue Sep 15, 2020 8:41 pm
iamblessed wrote: Tue Sep 15, 2020 8:32 pm
Tingting1013 wrote: Tue Sep 15, 2020 7:02 pm
iamblessed wrote: Tue Sep 15, 2020 6:43 pm

That 2M house might be 1M or less in the Midwest. You can go up in size some and still save a lot of money.
A $1M house in the Midwest at 2% property tax costs the same as a $2M house in the Bay Area at 1% property tax.

Also, the $2M house is $1.5M land and $0.5M house, while the Midwest $1M house might be 80% house or more. Maintenance and insurance costs are therefore higher in the Midwest.
Even if everything you say is true you still have 1M to help you with higher maintenance, insurance costs and taxes.
You’re confusing cash flow with net worth.

In CA I would have $2M in home equity.

In WI (for example) I would have $1M in home equity and $1M in my portfolio.

These two scenarios are, so far, financially equivalent. Now we need to calculate annual expenses. And I’m saying that the house in WI will have similar or higher ongoing expenses than the one in CA.
True but you can withdraw 4% a year from your 1M portfolio.
You can get a mortgage or HELOC too.
palanzo
Posts: 1411
Joined: Thu Oct 10, 2019 4:28 pm

Re: Is it worth to relocate for retirement?

Post by palanzo »

Tingting1013 wrote: Tue Sep 15, 2020 9:16 pm
iamblessed wrote: Tue Sep 15, 2020 9:15 pm
Tingting1013 wrote: Tue Sep 15, 2020 8:41 pm
iamblessed wrote: Tue Sep 15, 2020 8:32 pm
Tingting1013 wrote: Tue Sep 15, 2020 7:02 pm

A $1M house in the Midwest at 2% property tax costs the same as a $2M house in the Bay Area at 1% property tax.

Also, the $2M house is $1.5M land and $0.5M house, while the Midwest $1M house might be 80% house or more. Maintenance and insurance costs are therefore higher in the Midwest.
Even if everything you say is true you still have 1M to help you with higher maintenance, insurance costs and taxes.
You’re confusing cash flow with net worth.

In CA I would have $2M in home equity.

In WI (for example) I would have $1M in home equity and $1M in my portfolio.

These two scenarios are, so far, financially equivalent. Now we need to calculate annual expenses. And I’m saying that the house in WI will have similar or higher ongoing expenses than the one in CA.
True but you can withdraw 4% a year from your 1M portfolio.
You can get a mortgage or HELOC too.
And go into debt?
MindBogler
Posts: 1031
Joined: Wed Apr 17, 2013 12:05 pm

Re: Is it worth to relocate for retirement?

Post by MindBogler »

Tingting1013 wrote: Tue Sep 15, 2020 9:03 pm Ok, the variable you are referring to then is the utility I get from the house. It’s true that that’s higher in the Midwest $1M house compared to the CA $2M house.

But that’s at least partially offset by higher operating costs, worse weather, and likely lower appreciation.
You need throw out this comparison, it is useless. If you keep the relative size of the homes constant, then I agree with everything you said here except higher operating cost. For a given property/home of X size when compared between the midwest and the Bay, the house in the midwest will have/be cheaper (on average) to:

1. buy
2. maintain (cost of labor)

And probably, with the exclusion of Texas, property taxes will almost certainly be cheaper as well.

Now whether or not the pros of midwest living outweigh those of the Bay, this is all subjective and comes down to personal preference.

Disclaimer: I do not live in the midwest nor have any plans of relocating there.
Tingting1013
Posts: 436
Joined: Mon Aug 24, 2020 5:44 pm

Re: Is it worth to relocate for retirement?

Post by Tingting1013 »

palanzo wrote: Tue Sep 15, 2020 9:18 pm
Tingting1013 wrote: Tue Sep 15, 2020 9:16 pm
iamblessed wrote: Tue Sep 15, 2020 9:15 pm
Tingting1013 wrote: Tue Sep 15, 2020 8:41 pm
iamblessed wrote: Tue Sep 15, 2020 8:32 pm

Even if everything you say is true you still have 1M to help you with higher maintenance, insurance costs and taxes.
You’re confusing cash flow with net worth.

In CA I would have $2M in home equity.

In WI (for example) I would have $1M in home equity and $1M in my portfolio.

These two scenarios are, so far, financially equivalent. Now we need to calculate annual expenses. And I’m saying that the house in WI will have similar or higher ongoing expenses than the one in CA.
True but you can withdraw 4% a year from your 1M portfolio.
You can get a mortgage or HELOC too.
And go into debt?
If I need the money sure. I can keep $1M in my portfolio and withdraw 4% or take out a mortgage and spend down 4% of the proceeds. The net effect on net worth is the same (slightly worse with the mortgage due to cost of borrowing but that’s pretty cheap these days)
iamblessed
Posts: 738
Joined: Sat Jun 09, 2018 11:52 am

Re: Is it worth to relocate for retirement?

Post by iamblessed »

You are worried about higher maintenance, insurance costs and taxes. In real life it will amount to very little extra.
Tingting1013
Posts: 436
Joined: Mon Aug 24, 2020 5:44 pm

Re: Is it worth to relocate for retirement?

Post by Tingting1013 »

MindBogler wrote: Tue Sep 15, 2020 9:24 pm
Tingting1013 wrote: Tue Sep 15, 2020 9:03 pm Ok, the variable you are referring to then is the utility I get from the house. It’s true that that’s higher in the Midwest $1M house compared to the CA $2M house.

But that’s at least partially offset by higher operating costs, worse weather, and likely lower appreciation.
You need throw out this comparison, it is useless. If you keep the relative size of the homes constant, then I agree with everything you said here except higher operating cost. For a given property/home of X size when compared between the midwest and the Bay, the house in the midwest will have/be cheaper (on average) to:

1. buy
2. maintain (cost of labor)

And probably, with the exclusion of Texas, property taxes will almost certainly be cheaper as well.

Now whether or not the pros of midwest living outweigh those of the Bay, this is all subjective and comes down to personal preference.

Disclaimer: I do not live in the midwest nor have any plans of relocating there.
I am giving you a real world situation.

I live in a $2M Bay Area house that is 1600 sqft on a 5000 sqft lot.

When I retire early in my 40s and move to the Midwest or South, do you really think I’ll be looking for a similar size setup?

The title of the thread is “is it worth it to relocate for retirement”

In most real world scenarios, the answer is not obvious
iamblessed
Posts: 738
Joined: Sat Jun 09, 2018 11:52 am

Re: Is it worth to relocate for retirement?

Post by iamblessed »

Tingting1013 wrote: Tue Sep 15, 2020 9:30 pm
MindBogler wrote: Tue Sep 15, 2020 9:24 pm
Tingting1013 wrote: Tue Sep 15, 2020 9:03 pm Ok, the variable you are referring to then is the utility I get from the house. It’s true that that’s higher in the Midwest $1M house compared to the CA $2M house.

But that’s at least partially offset by higher operating costs, worse weather, and likely lower appreciation.
You need throw out this comparison, it is useless. If you keep the relative size of the homes constant, then I agree with everything you said here except higher operating cost. For a given property/home of X size when compared between the midwest and the Bay, the house in the midwest will have/be cheaper (on average) to:

1. buy
2. maintain (cost of labor)

And probably, with the exclusion of Texas, property taxes will almost certainly be cheaper as well.

Now whether or not the pros of midwest living outweigh those of the Bay, this is all subjective and comes down to personal preference.

Disclaimer: I do not live in the midwest nor have any plans of relocating there.
I am giving you a real world situation.

I live in a $2M Bay Area house that is 1600 sqft on a 5000 sqft lot.

When I retire early in my 40s and move to the Midwest or South, do you really think I’ll be looking for a similar size setup?
I will put up some real numbers. I live in the Midwest. I live in a 1300 sqft house on a 22,000 sqft lot. My taxes are $2200. Insurance $900 The house cost 225k I know that is a little smaller than your home but you get the idea.
palanzo
Posts: 1411
Joined: Thu Oct 10, 2019 4:28 pm

Re: Is it worth to relocate for retirement?

Post by palanzo »

iamblessed wrote: Tue Sep 15, 2020 9:40 pm
Tingting1013 wrote: Tue Sep 15, 2020 9:30 pm
MindBogler wrote: Tue Sep 15, 2020 9:24 pm
Tingting1013 wrote: Tue Sep 15, 2020 9:03 pm Ok, the variable you are referring to then is the utility I get from the house. It’s true that that’s higher in the Midwest $1M house compared to the CA $2M house.

But that’s at least partially offset by higher operating costs, worse weather, and likely lower appreciation.
You need throw out this comparison, it is useless. If you keep the relative size of the homes constant, then I agree with everything you said here except higher operating cost. For a given property/home of X size when compared between the midwest and the Bay, the house in the midwest will have/be cheaper (on average) to:

1. buy
2. maintain (cost of labor)

And probably, with the exclusion of Texas, property taxes will almost certainly be cheaper as well.

Now whether or not the pros of midwest living outweigh those of the Bay, this is all subjective and comes down to personal preference.

Disclaimer: I do not live in the midwest nor have any plans of relocating there.
I am giving you a real world situation.

I live in a $2M Bay Area house that is 1600 sqft on a 5000 sqft lot.

When I retire early in my 40s and move to the Midwest or South, do you really think I’ll be looking for a similar size setup?
I will put up some real numbers. I live in the Midwest. I live in a 1300 sqft house on a 22,000 sqft lot. My taxes are $2200. Insurance $900 The house cost 225k I know that is a little smaller than your home but you get the idea.
I am wondering if you would consider adopting me? :mrgreen:
Tingting1013
Posts: 436
Joined: Mon Aug 24, 2020 5:44 pm

Re: Is it worth to relocate for retirement?

Post by Tingting1013 »

iamblessed wrote: Tue Sep 15, 2020 9:40 pm
Tingting1013 wrote: Tue Sep 15, 2020 9:30 pm
MindBogler wrote: Tue Sep 15, 2020 9:24 pm
Tingting1013 wrote: Tue Sep 15, 2020 9:03 pm Ok, the variable you are referring to then is the utility I get from the house. It’s true that that’s higher in the Midwest $1M house compared to the CA $2M house.

But that’s at least partially offset by higher operating costs, worse weather, and likely lower appreciation.
You need throw out this comparison, it is useless. If you keep the relative size of the homes constant, then I agree with everything you said here except higher operating cost. For a given property/home of X size when compared between the midwest and the Bay, the house in the midwest will have/be cheaper (on average) to:

1. buy
2. maintain (cost of labor)

And probably, with the exclusion of Texas, property taxes will almost certainly be cheaper as well.

Now whether or not the pros of midwest living outweigh those of the Bay, this is all subjective and comes down to personal preference.

Disclaimer: I do not live in the midwest nor have any plans of relocating there.
I am giving you a real world situation.

I live in a $2M Bay Area house that is 1600 sqft on a 5000 sqft lot.

When I retire early in my 40s and move to the Midwest or South, do you really think I’ll be looking for a similar size setup?
I will put up some real numbers. I live in the Midwest. I live in a 1300 sqft house on a 22,000 sqft lot. My taxes are $2200. Insurance $900 The house cost 225k I know that is a little smaller than your home but you get the idea.
You’re missing my point.

Do college students keep eating ramen once they get a real job with income?
iamblessed
Posts: 738
Joined: Sat Jun 09, 2018 11:52 am

Re: Is it worth to relocate for retirement?

Post by iamblessed »

Tingting1013 wrote: Tue Sep 15, 2020 9:48 pm
iamblessed wrote: Tue Sep 15, 2020 9:40 pm
Tingting1013 wrote: Tue Sep 15, 2020 9:30 pm
MindBogler wrote: Tue Sep 15, 2020 9:24 pm
Tingting1013 wrote: Tue Sep 15, 2020 9:03 pm Ok, the variable you are referring to then is the utility I get from the house. It’s true that that’s higher in the Midwest $1M house compared to the CA $2M house.

But that’s at least partially offset by higher operating costs, worse weather, and likely lower appreciation.
You need throw out this comparison, it is useless. If you keep the relative size of the homes constant, then I agree with everything you said here except higher operating cost. For a given property/home of X size when compared between the midwest and the Bay, the house in the midwest will have/be cheaper (on average) to:

1. buy
2. maintain (cost of labor)

And probably, with the exclusion of Texas, property taxes will almost certainly be cheaper as well.

Now whether or not the pros of midwest living outweigh those of the Bay, this is all subjective and comes down to personal preference.

Disclaimer: I do not live in the midwest nor have any plans of relocating there.
I am giving you a real world situation.

I live in a $2M Bay Area house that is 1600 sqft on a 5000 sqft lot.

When I retire early in my 40s and move to the Midwest or South, do you really think I’ll be looking for a similar size setup?
I will put up some real numbers. I live in the Midwest. I live in a 1300 sqft house on a 22,000 sqft lot. My taxes are $2200. Insurance $900 The house cost 225k I know that is a little smaller than your home but you get the idea.
You’re missing my point.

Do college students keep eating ramen once they get a real job with income?
I am not missing it. Add another 225k to my home price and that will get you a home much larger than 1600 sqft. Double all of my bills it is still a good deal compared to the bay area. The houses in the Midwest are a lot cheaper than you think.
UpperNwGuy
Posts: 4142
Joined: Sun Oct 08, 2017 7:16 pm

Re: Is it worth to relocate for retirement?

Post by UpperNwGuy »

augusto wrote: Fri Aug 21, 2020 12:23 pm In terms of optimization, is it worth to move to a “retiree friendly” state like Florida, Arizona, etc, from a northern state like Massachusetts?
I don't know the answer to your question, but I do know that my cousin from Florida retired to Massachusetts about eight years ago and considers that to be a good decision.
nigel_ht
Posts: 1267
Joined: Tue Jan 01, 2019 10:14 am

Re: Is it worth to relocate for retirement?

Post by nigel_ht »

Tingting1013 wrote: Tue Sep 15, 2020 9:48 pm
iamblessed wrote: Tue Sep 15, 2020 9:40 pm
Tingting1013 wrote: Tue Sep 15, 2020 9:30 pm
MindBogler wrote: Tue Sep 15, 2020 9:24 pm
Tingting1013 wrote: Tue Sep 15, 2020 9:03 pm Ok, the variable you are referring to then is the utility I get from the house. It’s true that that’s higher in the Midwest $1M house compared to the CA $2M house.

But that’s at least partially offset by higher operating costs, worse weather, and likely lower appreciation.
You need throw out this comparison, it is useless. If you keep the relative size of the homes constant, then I agree with everything you said here except higher operating cost. For a given property/home of X size when compared between the midwest and the Bay, the house in the midwest will have/be cheaper (on average) to:

1. buy
2. maintain (cost of labor)

And probably, with the exclusion of Texas, property taxes will almost certainly be cheaper as well.

Now whether or not the pros of midwest living outweigh those of the Bay, this is all subjective and comes down to personal preference.

Disclaimer: I do not live in the midwest nor have any plans of relocating there.
I am giving you a real world situation.

I live in a $2M Bay Area house that is 1600 sqft on a 5000 sqft lot.

When I retire early in my 40s and move to the Midwest or South, do you really think I’ll be looking for a similar size setup?
I will put up some real numbers. I live in the Midwest. I live in a 1300 sqft house on a 22,000 sqft lot. My taxes are $2200. Insurance $900 The house cost 225k I know that is a little smaller than your home but you get the idea.
You’re missing my point.

Do college students keep eating ramen once they get a real job with income?
$1.2M, 4br 4ba, 2500 sq ft .35 ac Comes with ADU that you can VRBO.

Near Big Sky ski resort.

https://www.zillow.com/homedetails/547- ... e=txtshare

$847K 5br 4ba, 5700 sq ft, 16 ac.

1 hr from DC, probably 45 min to northern VA restaurants.

https://www.zillow.com/homedetails/2113 ... e=txtshare

$895K 5br 4ba, 5827 sq ft, 1.31ac. Indoor basketball court. Now that’s a little odd but the views are nice.

30m or so from Jackson Hole, WY

https://www.zillow.com/homedetails/238- ... e=txtshare

Not ramen. Half the price. Lower appreciation? Probably. I bet a house in Alpine + $1M in the market did pretty well though. Not that weird one with the indoor basketball court but a reasonably normal one with nice views.
Dontwasteit
Posts: 173
Joined: Wed Apr 12, 2017 6:52 pm

Re: Is it worth to relocate for retirement?

Post by Dontwasteit »

7eight9 wrote: Fri Aug 21, 2020 4:23 pm Why limit yourself to living in the United States? Your dollar will go farther in a lot of other places in the world.
No thanks!
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