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Care to elaborate on that a bit? My statement was in trying to chose a suitable place to settle that you might like that has a reasonable cost of living. Not really thinking of comparing high cost of living areas, though as pointed out even in a higher cost of living areas like Southern Ca., utility bills are generally not very high there because of the pleasant weather. (though the high cost of real estate, state taxes, higher labor costs, outweighs the low utilities by far)
Other examples looking at lower cost of living areas, you can find very reasonable homes in some areas of Texas, but the property taxes are very high, but you don't have state taxes. I would think that in some areas like Houston, you would also have high utility costs. You can find reasonable homes in certain areas of Florida, but RE taxes are highish, home insurance and auto insurance can be very high as well as utilities in Southern Florida. I am not familiar with the other Southern states as I never lived there except in Tn. for one year, but truthfully I only remember real estate costs which were very reasonable coming from an expensive area in Southern California.
... Other examples looking at lower cost of living areas, you can find very reasonable homes in some areas of Texas, but the property taxes are very high, but you don't have state taxes. I would think that in some areas like Houston, you would also have high utility costs. You can find reasonable homes in certain areas of Florida, but RE taxes are highish, home insurance and auto insurance can be very high as well as utilities in Southern Florida. I am not familiar with the other Southern states as I never lived there except in Tn. for one year, but truthfully I only remember real estate costs which were very reasonable coming from an expensive area in Southern California.
In my area; 2 bdrm homes start at $40k. Real estate taxes are often in the $300 - $500 range. Any couple with income in the minimum-wage range would pay no income taxes. There is no summer a/c costs, only winter heat. We get by on around $1200 per winter for heating fuel.
people can adapt and live on very little . the question is only where the limit lies before life is just miserable.
the stress of having everything unexpected being a financial disaster or not being able to do things you want can lead to a pretty miserable retirement.
the less you have the less choices you have in life and many choices you can not make for lack of funds can be very life altering.
money in retirement is about wants and needs but more important to me it is about choices in life.
I agree. Some folks are simply 'stuck' with a shoestring retirement situation because of bad choices and shortsighted planning (or unforeseen circumstances beyond their control). While one is still working and saving for retirement, they can at least hope things will improve in the future.
But, retirement is a "rest of one's life" proposition and being locked-into a lifetime of scrimping (after working for 40+ years to get there) ... sounds really depressing. In that situation, one can only make the best out of their situation and look for opportunities to still find joy and enjoy life ... without spending money.
I agree. Some folks are simply 'stuck' with a shoestring retirement situation because of bad choices and shortsighted planning (or unforeseen circumstances beyond their control). While one is still working and saving for retirement, they can at least hope things will improve in the future.
But, retirement is a "rest of one's life" proposition and being locked-into a lifetime of scrimping (after working for 40+ years to get there) ... sounds really depressing. In that situation, one can only make the best out of their situation and look for opportunities to still find joy and enjoy life ... without spending money.
Agreed. I often have visions of myself ending up like some of the people to whom I've delivered mail.
They might live in a decent place, but all they can afford to do is watch TV and go out to get the mail.
What's beginning to scare me about retirement is the possible change in my health insurance. I worked all of my career expecting one thing (the main reason anyone takes this job), and now it will most likely be taken away.
So many of us are in the same boat in one way or other.
we lived all our lives in the boroughs of nyc. we never took advantage of things here either because we had no interest or we couldn't afford it.
being an avid hunter and fisherman we decided we would want to retire within 2 hours of the kids so we could be part of our kids and grandchildrens lives.
both mine and my wife had parents who fled to florida because it was low cost and for the most part they missed life with all of us except for vacations and special occasions.
so we bought a potential home for retirement in lake wallanpaupack in the pocono mountains of pa.
it was everything we wanted , that is until it wasn't.
once we started focusing on what really is important in the last down of life it lacked all of it.
no public transportation if we couldn't drive
limited specialists and medical facilities
little to do all winter.
once we exhausted things nearby there was nothing left to do.
we realized retiring here regardless if it was cheaper was a mistake for us.
we realized everything on our check list we wanted was right here in good ole bay terrace queens .
sure it is expensive but that is why i spent my life saving ,investing and going through sleepless nights conmtemplating the next deal.
i always say the reason for money is to have choices in life . being forced to move away from family and friends because of lack of money or only looking at the expense side of things is not something i want to ever do or be forced into.
folks think i was obsessive with my investing and growing my money but coming from a nyc housing project as a kid i decided early on poor was not going to be an option in my adult life.
there are things in life you can't put a price tag on like being right here and being with the grandchildren every week. i would pay 2x the expenses if i had to for just that alone.
I am retired, single, a renter, have a paid up car, no debt and live on less than $30,000 each year. I live in Georgia and with its senior exemptions I pay Zero state income tax and very little federal income tax. BUT.
There is always a BIG Butt,
I have had three surgeries that would have bankrupted me if I didn't have Medicare AND private health insurance. It's not enough to just scrape by.
It is possible that seniors can live longer with access to all the bells and whistles of modern health care but it is expensive.
I just don't see the federal government who gets the bulk of income taxes ponying up to support Obamacare since it is supposed to be self funded by all those immortal young people who will be glad to pay in? The feds say most would be better not working at all and following their dreams. And you know, they are right. Except an oatmeal, veggie spaghetti diet sucks.
Health care is the big variable here. These costs, especially as you age, are volatile and not consistent from month to month. You may have ten years of very low medical expenses, then get in a car wreck and in the hospital for weeks through no fault of your own. As you age, the slope of the line of increased health care expeditures is going to increase, but by how much is unknown.
I've watched many Depression-era family members and their friends die penniless due to long-term care costs. These are people who managed their money reasonably well, yet nothing is left for the surviving family, not even the house. Many less affluent Boomers are relying on an inheritance from their Depression-era parents to float themselves through early retirement. This is scary and playing financial Russian roulette.
If you're retired and on a shoestring budget, you are not worried about minimizing the effects of long-term care on your estate, sound investment decisions, etc - you are just trying to stay afloat. You need to put back a little for predicatable expenses, like tires mentioned above, but beyond that, there probably isn't a lot left.
How you tinker with the income vs. expenses is up to the person. If someone has a paid for home and a reliable, paid for vehicle, their expenses should be less, so they can deal with less income. If someone is living in a high cost area, maybe they can move to a lower cost area to get to that break even point. Maybe you can still work part-time or have some side business, thereby getting the income up.
I completely agree we're going to have a crisis on our hands in this country in the next ten to fifteen years with retiring boomers who don't have enough to keep themselves from being homeless.
Last edited by Serious Conversation; 02-19-2014 at 10:35 AM..
there are things in life you can't put a price tag on like being right here and being with the grandchildren every week. i would pay 2x the expenses if i had to for just that alone.
It could be said that everything we need is in our own backyard, including cures for ailments. We've decided we would gain nothing financially if we moved away, and we would forfeit frequent grandkid contact. So now I see property taxes () as an "opportunity" cost—the opportunity to be near them, the opp to be in a relatively safe and beautiful location, the opp to have everything we need close by as we age. Now the key is making sure we don't run out of money, but we're operating with a plan. I won't live till 90 anyway, and DH can find some rich young chick after I'm gone.
I am retired, single, a renter, have a paid up car, no debt and live on less than $30,000 each year. I live in Georgia and with its senior exemptions I pay Zero state income tax and very little federal income tax. BUT.
There is always a BIG Butt,
I have had three surgeries that would have bankrupted me if I didn't have Medicare AND private health insurance. It's not enough to just scrape by.
The big surgeries would bankrupt anyone.
I doubt if any more than 0.005% of our population could simply write a check for a series of major surgeries.
You earn enough each year to support a growing family [short of healthcare]
Healthcare costs have been rising for a while now.
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What will get you?
) as an "opportunity" cost—the opportunity to be near them, the opp to be in a relatively safe and beautiful location, the opp to have everything we need close by as we age. Now the key is making sure we don't run out of money, but we're operating with a plan. I won't live till 90 anyway, and DH can find some rich young chick after I'm gone.
