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Here in Texas I run into a lot of refugees from California. They lived in LA or the SFO Bay Area most of their working life and were home owners. They saw the quality of life go down hill and decided to retire early and get out of California. One guy told me he sold his house in Palo Alto CA for over a million he had bought in 1980 for $90K and took the profits and bought a home in TX for $350K which was twice as nice and retired on the rest. (Along with a small bit of savings.)
Here is western PA we did not get the overinflated house prices (and we did not get the crash either!).
So, no.
I will not be retiring "early pretty much on home equity alone".
I would not even retire late on home equity alone!
Here in Texas I run into a lot of refugees from California. They lived in LA or the SFO Bay Area most of their working life and were home owners. They saw the quality of life go down hill and decided to retire early and get out of California. One guy told me he sold his house in Palo Alto CA for over a million he had bought in 1980 for $90K and took the profits and bought a home in TX for $350K which was twice as nice and retired on the rest. (Along with a small bit of savings.)
Anyone here with a similar story? Lets discuss.
I think the answer to your question is "probably." My main concern would be their spending habits. Do they know how much it would cost to live in Texas, to determine whether the $750k plus would be sufficient.
My suspicion is they have less than $750, because there would have been capital gains tax on the sell of their home. I am also concerned that they have only a small amount of retirement savings (other than the house) which suggests a high consumption lifestyle. Hard to say without more info.
That sounds like the ultimate downsizing story. The only thing I would be wary of in that situation would be the culture shock of moving from CA to TX.
Here in Texas I run into a lot of refugees from California. They lived in LA or the SFO Bay Area most of their working life and were home owners. They saw the quality of life go down hill and decided to retire early and get out of California. One guy told me he sold his house in Palo Alto CA for over a million he had bought in 1980 for $90K and took the profits and bought a home in TX for $350K which was twice as nice and retired on the rest. (Along with a small bit of savings.)
Anyone here with a similar story? Lets discuss.
Where I live, we see a lot of the same thing. People selling their SF Bay Area homes, leaving the rat race and buying a place that is twice as nice for a quarter as much as what they sold their home for. No need to move to Texas, unless you prefer humid heat. Lot of retirees in my part of CA
With that said, retireing on home equity alone is risky.
We saw a lot of them here in Colorado Springs back at the bubble peak in 2006. I call them California Refugees. One couple nearby had bought a new Condo, a new Corvette and a new Lexus.
We'll be doing this unless something really goes awry. On top of what we'll get from the house I also have a pension coming and we both have fairly large 401ks.
Probably punch out mid 50s and head to either Tyler or Austin.
As to the cap gains mention, only if it's not your first home, which ours is.
We saw a lot of them here in Colorado Springs back at the bubble peak in 2006. I call them California Refugees. One couple nearby had bought a new Condo, a new Corvette and a new Lexus.
Their timing was pretty good.
I've lived 12 years in the Springs, it's second on our list, maybe 3rd.
We'll be doing this unless something really goes awry. On top of what we'll get from the house I also have a pension coming and we both have fairly large 401ks.
Probably punch out mid 50s and head to either Tyler or Austin.
As to the cap gains mention, only if it's not your first home, which ours is.
It doesn't matter if it is your first home or not. The limit is 250k single, 500k mfj. Anything above that is subject to capital gains tax.
Here is western PA we did not get the overinflated house prices (and we did not get the crash either!).
So, no.
I will not be retiring "early pretty much on home equity alone".
I would not even retire late on home equity alone!
While it is true that PA didn't suffer the overinflated housing PA's governor Tom Wolf held up passing the budget because he wanted the largest tax increase in our history including taxes on nursing home care claiming only 25% of the people would have to pay it. For gods sake, people who do pay can't afford the $4,500 - $6,000 a month cost to take care of their parents let along getting hit with taxes on top of that. Thankfully the republicans fought it and he didn't get his tax increases. This went on for 9 months.
The only reason I am here in PA is because of my elderly mother. I will be selling my house, taking my business and my money with me, leaving when she passes and be moving to a lower tax state. Besides I'm not sure how long republicans can hold Tom Wolf off.
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