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If your working years were spent in states with higher wages, you ( and your employer ) paid in more SS and thus your retirement benefits will be more vs working in a low wage state.
However, when you draw SS..........UNLIKE WAGES........your check isn't higher in a high wage/ cost of living state.
Having your SS check based on high wages and drawing it while retired in a low cost of living is a good decision to stretch the dollar.
I see your point, but still, it really depends. In some ways your comparison is a bit of apples to oranges. I mean, rural TN vs. Indianapolis are two different worlds. Indianapolis is still generally an average to cheap COL area, especially compared to Boston or the Coastal CA metros. Take a look at your current job, for instance. How much more would you make doing the same job in Boston? Probably not enough to make up for the much higher cost in Boston. And if you lived in Boston, you'd probably still have a car. The transit there is good, but probably not good enough to go car free, so the transit pass in some ways is just more of a cost add on, although it probably means you can drive your car for longer if you don't rely on it 100% of the time.
I do agree, though, that sometimes the expensive metro areas are the only game in town for certain careers; but for most people that isn't the case.
I also think kids are a big part of the equation. Kids are just super expensive in high cost metro areas. The schools in the cheaper parts of high cost areas are generally horrible, which translates to living in a more expensive part of an already expensive metro area. For most folks, that takes two full time professional level incomes to make it work and all the stress that goes with it (and a higher risk of divorce, which is also costly). So, if you don't have kids, I think it's much easier to make a high cost metro area work. If you have kids, the calculus tilts more heavily in favor of the lower cost area.
From my research, my pay would probably go up about 50% from where it stands now. Rent would eat up a good bit of that increase, but certainly not all of it.
I'd disagree that major metros are not necessary for most people. This country is increasingly urbanizing and the economy is shifting in ways that there is less of a need to have large numbers of workers on large amounts of space (agriculture, huge factories, natural resources), which is easiest to do in the countryside. The best jobs tend to be in major cities in high tech or high education industries. The pendulum may swing the other way eventually, but for the near to medium term, I don't see small towns and rural America as being a viable option for professionally minded people.
Sure, there are terrible schools in high COL areas, but in the aggregate, I'd say schools in high COL states like CT/MA/MD/NJ are far better than low COL states like TN/WV/AL/MS.
Sure, there are terrible schools in high COL areas, but in the aggregate, I'd say schools in high COL states like CT/MA/MD/NJ are far better than low COL states like TN/WV/AL/MS.
Well, the true indicator is disposable income. The higher salaries in some states can be deceptive because that additional income gets absorbed in higher real estate and taxes. The Census Bureau's ACCRA numbers show that people in Alabama have higher disposable income that people in New York, New Jersey, Connecticut, and California.
I wonder if the ACCRA numbers for AL are skewed by disposable income outliers who live in the Huntsville AL area. That town is a real dichotomy of very country blue collar folk and very highly educated folk.
"Heralded by Forbes magazine as one of America’s Leading Cities for Business in 2011, Huntsville and the surrounding region remain one of the country’s fastest-growing areas. It has one of the highest per capita incomes in the Southeast. And its educated workforce tops the nation in number of PhDs per capita."
i agree, folks do much better going from high cost areas to low cost areas then most locals that lived in those low cost areas their whole lives. .
we had a 2nd home in the pocono mountains in PA which we were going to retire to. we live in nyc.
we thought about relocating before retirement but that wouldn't have worked.
while costs were about 20% less for daily life in pa salarys were 1/2 .
however once we retired and sold everything up here we would have been in very good shape there selling at ny prices. the problem is that the high cost areas can be just as tough to save for retirement even with the higher pay.
I'm really hoping to rent cheaply in a HCOL area for several years after grad school and then go somewhere cheap and buy a house without a mortgage. Same basic idea, even though I'd be doing it long before I intend to retire.
From my research, my pay would probably go up about 50% from where it stands now. Rent would eat up a good bit of that increase, but certainly not all of it.
Heh, yeah let me know how far that "extra money" goes when you get to that high cost metro area and get back to me. I'm not saying it's impossible, but it's not as easy as you seem to think.
Quote:
Originally Posted by Emigrations
I'd disagree that major metros are not necessary for most people. This country is increasingly urbanizing and the economy is shifting in ways that there is less of a need to have large numbers of workers on large amounts of space (agriculture, huge factories, natural resources), which is easiest to do in the countryside. The best jobs tend to be in major cities in high tech or high education industries. The pendulum may swing the other way eventually, but for the near to medium term, I don't see small towns and rural America as being a viable option for professionally minded people.
As far as professional employment goes, well of course there are more opportunities in metro areas than in rural areas. But you're going to extremes with your examples. I'm talking about the math being in favor of metro areas like Indianapolis/Denver/Kansas City/Phoenix over Boston/Los Angeles/San Francisco/New York. I'm not talking some rural area or small town, although a few of those might work, too, especially in places like North Dakota.
Quote:
Originally Posted by Emigrations
Sure, there are terrible schools in high COL areas, but in the aggregate, I'd say schools in high COL states like CT/MA/MD/NJ are far better than low COL states like TN/WV/AL/MS.
Heh, again, get back to us when you have a wife & 2 kids in said expensive metro area.
Heh, yeah let me know how far that "extra money" goes when you get to that high cost metro area and get back to me. I'm not saying it's impossible, but it's not as easy as you seem to think.
As far as professional employment goes, well of course there are more opportunities in metro areas than in rural areas. But you're going to extremes with your examples. I'm talking about the math being in favor of metro areas like Indianapolis/Denver/Kansas City/Phoenix over Boston/Los Angeles/San Francisco/New York. I'm not talking some rural area or small town, although a few of those might work, too, especially in places like North Dakota.
Heh, again, get back to us when you have a wife & 2 kids in said expensive metro area.
The biggest challenges from going to Indianapolis to our MA offices near Boston would be rent and utilities, especially winter heating bills. I'm already taxed percentage-wise (as a renter) at a level similar to MA on income/sales/miscellaneous taxes, so those expenses would not change proportionally. My biggest problem there is that the housing stock is usually old, whereas here it is generally much newer.
Home ownership would probably be out of the question in MA, but is doable here on the medium term. I could afford a $100k house on my $50k, and $100k will get you something decent in IN. I'd be hard pressed to find something at $300k within commuting distance to those offices.
Does anyone ever really consider Indianapolis or KC for career choices? These are not hot cities by any stretch of the imagination.
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