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............ I hope everyone finds a contented retirement. But you have to plan it; it doesn't just happen.
I may be extraordinarily lucky, but my contented retirement just happened - I didn't really plan it. I had purchased a town house three and a half years before retirement because I needed a place to live and I decided not to continue to rent. I thought - yes, this will be a perfect retirement place, as I don't want to move again (too much work!) so I'll die here. Fourteen years later nothing has happened to change my mind about that. I'll die here.
My townhouse is only 10 miles from downtown Los Angeles, where the home of my beloved Los Angeles Master Chorale (Disney Hall) is located. It is within walking distance of many, many things. The climate is right, the cost is right, the activities are right, the absence of mosquitos is right.
Even my wonderfully gratifying volunteer activities were just waiting for me, as it turned out. I fell into them almost by accident as a natural outgrowth of stuff I had already been doing, to make a long story short.
Financial planning for retirement? I did none, unless you call the lifelong habit of living below my means "planning". I am set for life with a modest but secure California teachers' pension, to which my contribution of 8% of my salary during my 34-year career now seems like quite a bargain.
If you look at what they pay in mortgage payments, property taxes, and state/county/local income taxes, the difference in salary tends to be eaten up. They have the home equity but few have big savings for retirement beyond their 401-K.
You're right, though. They can sell the house, move somewhere cheap, and live comfortably off a Social Security check, 401-K distributions, and the remaining equity from their home. That option isn't available in the flyover states or the rust belt states. I'm describing my math and the math of most people in metro-Boston, metro-NYC, metro-Philly, and metro-DC is bound to be very similar. Why else would there be the huge flood of retiree migration from the northeast to the Carolinas? I don't plan on moving to the Carolinas but I bailed out of the high housing cost area where I lived most of my adult life to make my retirement numbers work.
Effective salary can still be far more, even counting all that.
I am from TN but received an offer from a company based out of Boston last year. When I went to Boston for training, I was just amazed at the obvious wealth and prosperity. I was making $24k/no benefits in TN, and had I actually been working out of the Boston office, the new role would have been $78k with full benefits. I was hired for the Indianapolis satellite office and make about $60k now. The cost of living here isn't really higher than east TN (except taxes are a lot worse), but my wage has more than doubled.
Gas was cheaper in TN, but I would have to drive far more than in Boston. As a percentage of salary, I'll spend less on gas/transit at the Boston office than in TN. A Honda Civic is going to cost about the same in Boston as it will in rural Tennessee, so that rural Tennesseans are spending a lot more proportionally on the car payment.
As the Boston person's salary is going to be higher, they get more in SS at retirement. With the fact they are making more period, they're saving more, even at the same percentage. If someone is only making $24k, they're barely subsisting, but at $70k in Boston, they should be able to save at least a little bit.
There's a lot of benefits to living in a rich, prosperous area.
For the last few years my husband and I have wrestled with whether to stay here in CA or move elsewhere. CA is a tough place to retire IMHO. Taxes, politics and at this point, water problems. But we've been here for over 30 years, we have our favorite restaurants (where everyone knows are name) and hubby is surgeon so we know all the doctors and hospitals that we might need in the future. We will sell our home with 20 acres in a year or so and move into town. Haven't decided whether to rent or buy. I'd just like a place with less responsibility. I guess we can travel to other states and stay awhile and then come home as opposed to moving to some other state. Would be nice to be living in a friendlier tax state and a state with fewer weirdos .
If you move but stay in Cali, you will lose your Proposition whatever it is low property taxes, both you and your current place's buyer will pay more. Just sayin'. That said, I am not a Cali tax adviser, so may be wrong on this.
If you have a decent house on 20 acres in Cali, though, you can sell that and then pay cash for the King Ranch in Texas.
Effective salary can still be far more, even counting all that.
I am from TN but received an offer from a company based out of Boston last year. When I went to Boston for training, I was just amazed at the obvious wealth and prosperity. I was making $24k/no benefits in TN, and had I actually been working out of the Boston office, the new role would have been $78k with full benefits. I was hired for the Indianapolis satellite office and make about $60k now. The cost of living here isn't really higher than east TN (except taxes are a lot worse), but my wage has more than doubled.
Gas was cheaper in TN, but I would have to drive far more than in Boston. As a percentage of salary, I'll spend less on gas/transit at the Boston office than in TN. A Honda Civic is going to cost about the same in Boston as it will in rural Tennessee, so that rural Tennesseans are spending a lot more proportionally on the car payment.
As the Boston person's salary is going to be higher, they get more in SS at retirement. With the fact they are making more period, they're saving more, even at the same percentage. If someone is only making $24k, they're barely subsisting, but at $70k in Boston, they should be able to save at least a little bit.
There's a lot of benefits to living in a rich, prosperous area.
I live in R.I. which is a 1.15 hour ride to Boston and could increase my salary which is over 70K by $25-$30,000 a year transferring to Boston. With Boston and vicinity extremely high housing costs than where I live which are also pretty high, I would either break even or more than likely loose money if I transferred.
If you move but stay in Cali, you will lose your Proposition whatever it is low property taxes, both you and your current place's buyer will pay more. Just sayin'. That said, I am not a Cali tax adviser, so may be wrong on this.
If you have a decent house on 20 acres in Cali, though, you can sell that and then pay cash for the King Ranch in Texas.
Depends... in some circumstances a homeowner is allowed to downsize within the same county or a county with a reciprocal Prop 13 Tax agreement... the idea is so older folks wouldn't be "Trapped" in a large home.
The home you buy must be less dollar wise than the home you sell... it's a one time deal.
Last edited by Ultrarunner; 06-26-2015 at 05:31 PM..
I live in R.I. which is a 1.15 hour ride to Boston and could increase my salary which is over 70K by $25-$30,000 a year transferring to Boston. With Boston and vicinity extremely high housing costs than where I live which are also pretty high, I would either break even or more than likely loose money if I transferred.
Yep. Someone from Tennessee simply doesn't have the perspective about Boston housing prices. Unless you sit down and run the numbers on a spreadsheet, it's easy to conclude that you'd do better in Boston than Tennessee. There is a reason why there is a mass exodus from the expensive Northeast to the low cost south. Unless you have a high skill job that commands large compensation, your after-housing disposable income ends up being a heck of a lot more in the south than in the Northeast. There are always exceptions but that's how the math tends to work out.
Yep. Someone from Tennessee simply doesn't have the perspective about Boston housing prices. Unless you sit down and run the numbers on a spreadsheet, it's easy to conclude that you'd do better in Boston than Tennessee. There is a reason why there is a mass exodus from the expensive Northeast to the low cost south. Unless you have a high skill job that commands large compensation, your after-housing disposable income ends up being a heck of a lot more in the south than in the Northeast. There are always exceptions but that's how the math tends to work out.
I understand that many people do indeed have to move out of the major high cost metro areas such as New York City, Boston, and Washington DC in order to make their retirements work. However money isn't everything and it just amazes me how many folks are willing to put up with the heat and humidity of the summers in the American south-east. Maybe the explanation is that the heat and humidity are also bad in the north-east during the summer, so that the difference between NYC and North Carolina is not that huge plus in North Carolina there is little or no snow and ice to cope with.
Housing is apparently super cheap in many parts of Florida, if we can believe what we read here on City-Data. But I would rather live in hell than live in Florida. Obviously though, many people don't mind it so much because there are millions of retirees living there.
Yep. Someone from Tennessee simply doesn't have the perspective about Boston housing prices. Unless you sit down and run the numbers on a spreadsheet, it's easy to conclude that you'd do better in Boston than Tennessee. There is a reason why there is a mass exodus from the expensive Northeast to the low cost south. Unless you have a high skill job that commands large compensation, your after-housing disposable income ends up being a heck of a lot more in the south than in the Northeast. There are always exceptions but that's how the math tends to work out.
And someone from the big urban centers simply does not have the perspective about the low salaries in Tennessee. And the rapidly increasing cost of living in Nashville, which is where you will find the jobs. I was lucky to keep my San Francisco salary when I was relocated to Nashville so of course my disposable income increased. Though buying a house decreased my disposable income by a lot. But for people who are being paid Nashville salaries it's entirely different story-Low salaries coupled with a rapidly increasing cost of living does not lead to a lot of disposable income. And for people who cashed out with the big house equity and then retire to a less costly state, that is yet another story.
.................... And for people who cashed out with the big house equity and then retire to a less costly state, that is yet another story.
And that is the principal story here because this is, after all, the Retirement Forum. Not only do people from the large metro areas have "the big house equity" but they also have the "big" (relatively speaking) pensions or the big 401(k)'s which were based on the bigger salaries.
This thread is of interest because it asks for stories from those who have decided NOT to relocate and who are happy with that choice.
Normally the people who have worked a lifetime in low cost of living places such as Kansas, Tennessee, and many other similar ones do not have the option of relocating to NYC, Boston, DC, or San Francisco. Blessed are those who don't want to anyway, for they will not be frustrated.
Blessed too are those escapees from the large metros who enjoy semi-rural or small town living, for they will live like kings and also enjoy their lifestyles. Some of these discover they can't handle the change and move back.
Blessed (or at least fortunate) are those like me who really like their long-standing location and can afford to remain there. We are the subjects of the inquiry by the original poster of this thread.
And that is the principal story here because this is, after all, the Retirement Forum. Not only do people from the large metro areas have "the big house equity" but they also have the "big" (relatively speaking) pensions or the big 401(k)'s which were based on the bigger salaries.
This thread is of interest because it asks for stories from those who have decided NOT to relocate and who are happy with that choice.
They only have the "big house equity" if at some point in the tenure in the HCOL area, they could afford to buy a house. The person who accepted the position in La Habra, CA that I declined to stay in Cleveland did not ever buy a home until he moved to Dallas.
Ditto on the 401(k). Unless you had excess money that you could place in a 401(k), it did not happen. Many of the "big salaries" offered in SoCal were generally only 20-25% higher than similar jobs in the Midwest, a difference that was easily consumed by the higher cost of living.
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