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Hello from NYC - any NYC retirees out there?
Old 05-14-2014, 07:30 PM   #1
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Hello from NYC - any NYC retirees out there?

I've been lurking around these forums for a while.
I live in NYC, where the cost of living is sky high. Between taxes, high rentals and real estate prices, daycare if you have kids, basic costs of living that including greasing everyone's palms to get what would be considered a non-luxury basic all over the country, it is very hard to save for retirement, even on high six figure salaries. I see plenty of ultra rich people who are a mix of old New York money, Wall Street and hedge fund billionaires, real estate moguls who were FI the day they were born or soon enough but continue playing the 'game' and inflating their net worth and empires. For the rest of us working 'stiffs', its not so easy and we seem to be stuck here in eternity making a lot of money but at the same time spending a lot of it just to stay afloat and alive. Are there many or any on here who have worked/lived in NYC and managed to escape the mad rate race and 'retire' in NYC or surrounds or moved somewhere else with their families at a relatively early age, say in your 40s? What was/is your walk-away number? What is your yearly draw from your portfolio to maintain your standard of living?

A little bit about me, we are in our mid 30s with 1 toddler, own no real estate. I don't know but I personally (perhaps wrongly) think it would take about $5-$10 million in net worth to get to being FI, and we are nowhere close!
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Old 05-14-2014, 08:13 PM   #2
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Born and raised in Brooklyn, where things were always considerably less than Manhattan. But DW and I got out early in our marriage and crossed the river into New Jersey. The last 25 years have been in not-inexpensive Bergen County.
I highly doubt I could have ER'd if we lived in Manhattan. But it's also lifestyle - the very thing that Manhattan residents like is what I dislike, so Manhattan was never a consideration for us.
But if ER is your ultimate goal, you might want to consider moving. By the way, without traffic we are 10 minutes from Manhattan, so it's not like we can't partake of its cultural and entertainment benefits.
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Old 05-14-2014, 09:25 PM   #3
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I have been living in NYC for 30+ years and will soon retire here. Most of that time, I lived in a rent stabilized apartment in Brooklyn Heights. The apartment was not great, but I loved the neighborhood. Paying cheap rent was a HUGE help in LBYM, allowing me to save, save, save. I do not have children, so that enabled additional savings. I did mange to buy my retirement home (co-op apartment) here without a mortgage 2 & a half years ago.

Can it be done? Sure. Is it easy? No. You don't necessarily have to be a hedge fund manager, but you do need to make a good salary and LBYM. The latter can be difficult in Manhattan, with all the opportunities to spend.

With a toddler, you have to really weight the lifestyle issues carefully. Can you handle a longer commute? I know many couples with children living in the 'burbs, where one spouse works in the city and one closer to home.
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Old 05-14-2014, 11:26 PM   #4
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I wish New Yorkers would routinely say what borough they live in. As the last poster said, Manhattan is what many people mean when they think of an NYC lifestyle, but both the cost and the life is going to be quite different in Queens for example. I also wish so many people didn't use the generic "Bay Area". Well, is it San Francisco or Oakland or maybe Vallejo? Same with LA, the different areas are extremely different.

It's not some stalker could say, Oh, he lives in Brooklyn, maybe I will go rob him. There doesn't seem to be any real downside, put the post is actually useful instead of not.

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Manhattan
Old 05-15-2014, 06:50 AM   #5
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Manhattan

I live in Manhattan. For those of us who have demanding jobs and who want short commutes to work so that we can spend our time with family and enjoying and relaxing Manhattan makes sense. I know many people who commute over an hour from NJ and their stories churn my stomach. Whats the point of living so miserably if you can afford not to?
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Old 05-15-2014, 08:59 AM   #6
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I live in Manhattan. For those of us who have demanding jobs and who want short commutes to work so that we can spend our time with family and enjoying and relaxing Manhattan makes sense. I know many people who commute over an hour from NJ and their stories churn my stomach. Whats the point of living so miserably if you can afford not to?
This is a "debate" with no resolution. It's purely a matter of lifestyle choice. My first house was down near Princeton and my door-to-door commute was 1 1/2 hours. My commute from Bergen County was, door to door, just over an hour. In both cases, though, I loved what I came home to. For me, the words "relaxing" and "Manhattan" cannot be in the same sentence. My daughter and son-in-law live in Manhattan and love it. Whatever floats your boat......
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Old 05-15-2014, 09:05 AM   #7
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Originally Posted by cheap_skate View Post
Between taxes, high rentals and real estate prices, daycare if you have kids, basic costs of living that including greasing everyone's palms to get what would be considered a non-luxury basic all over the country, it is very hard to save for retirement, even on high six figure salaries.

For the rest of us working 'stiffs', its not so easy and we seem to be stuck here in eternity making a lot of money but at the same time spending a lot of it just to stay afloat and alive.

You have answered your own statements above with this:

Quote:
Originally Posted by cheap_skate View Post
I live in Manhattan. For those of us who have demanding jobs and who want short commutes to work so that we can spend our time with family and enjoying and relaxing Manhattan makes sense. I know many people who commute over an hour from NJ and their stories churn my stomach. Whats the point of living so miserably if you can afford not to?
(emphasis added by me)

Basically, you are choosing to spend your future dollars today because you feel commuting is miserable. Not making a judgement, just calling it as I see it. I know plenty of people who commuted from Bergen, Essex, and Union counties for years and considered it worthwhile in order to spend less on housing and lifestyle. It's all about choices and what fits your needs best.

My personal choice when I lived in the Tri-State area was to avoid living or working in Manhattan due to the costs. I lived in Bergen, Essex, and Union counties in NJ and Rockland and Westchester counties in NY. Believe it or not, there were a tremendous number of well-paying employment opportunities for me outside of Manhattan. If you want to spend less on living, maybe you could seek employment outside of Manhattan and get out of the vicious cycle?
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Same old..
Old 05-15-2014, 09:35 AM   #8
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Same old..

I see this has gone down the way of the usual Manhattan vs. boroughs/suburbs argument. The fact is different people have different lifestyles, preferences, personal situations and expenses. You can't simply answer everyone's question by moving. In my case I simply cannot leave and find another job, and even in the remote possibility I could, the pay would be much lower, job security would be much worse, commute would be much much worse. Also, having looked into all these options over the past decade continually, I've calculated the cost of being out in the burbs and its not that different for my personal situation. In the past it has been way cheaper for my to stay in Manhattan. Have you looked ar real estate prices in Brooklyn? Long Island City? Rye/Bronxville? Long Island? Anyway this discussion could go on and on - its not what I was hoping to get into.
I just wanted to hear stories from people who plan to retire or have retired after working/living in NYC, outside of people who were born FI, billionaires and those with sweet free rent or public pensions - i.e. people who came to NYC with nothing but a college degree and a shirt on their back and work in white collar jobs.
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Old 05-15-2014, 10:38 AM   #9
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I think your $5-$10 million figure is probably correct. Back in the early 80's my # was $3 million. I have not lived in NYC/USA for many years but I know young couples who are struggling on 250k/year, so 7 million earning 7% would probably be about right.
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Old 05-15-2014, 11:38 AM   #10
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I think the easiest way to answer that is to say the magic number is 33 times the amount you need to live on for a year if you are under 55 (3% yearly withdrawal) or 25 times the amount you need if you are over 55 (4% withdrawal) (this is MY opinion!)

The problem with a "number" is it is different for everyone. Someone that lives in NYC taking home $500k a year and spending $400k a year will have a much higher "number" than someone living in NYC taking home $500k and spending $300k a year. and if you were someone in Columbus OH and took home $150k and lived on $75k you could retire earlier than either the NYC people (but could not move to NYC in retirement!)

It really does not matter on where you live it matters on how much you spend. It costs a lot more to live in NYC but the salaries are much higher. It is not how much you save, but what percentage of your take home pay you can save and how you invest it.
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Old 05-15-2014, 11:41 AM   #11
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As someone who lived in Boston and works in an industry that is predominately in Boston, NYC, Stamford, SF or Chicago, I feel your pain. My number used to be $2 million, but that was when UST's were paying 6%! My number now is much closer to $3.5 or $4.
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Old 05-15-2014, 01:04 PM   #12
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ChilliPepr thats true. It matters how much you spend or expect to spend. If I wasn't working in Manhattan, I would definitely not live here. I don't hate the city, but cannot justify paying for the hype without a huge income. I would ideally like to live somewhere with decent weather, good schools, urban but not as hectic as Manhattan, good universities in the area, reasonable real estate values (homes for $500-750k), diverse and educated population, basically somewhere in California or Florida. With 2 kids, healthcare and a moderate but not lavish standard of living, taking a few months off to travel cheaply and perhaps 1 nice $10k vacation, I envision such a lifestyle would cost 150-250k a year assuming you pay for private college full tuition and possibly private school. Our expenses over the last decade in Manhattan have been on average about $90-100k but that includes no kids. So for retirement at say age 45, and a 3% withdrawal, that would be $5-$8mm. I just wonder how many people working and living in Manhattan hit a number like that while 40-50yrs old, pull the trigger and move somewhere with lower cost.
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Old 05-15-2014, 03:26 PM   #13
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My guess is anyone living in Manhattan is subject to a much higher rate of inflation than elsewhere in the US. International demand and a declining exchange rate have a greater impact than average US. I've not seen any numbers but 2X the US average is a good place to start.

Plugging some numbers into FIRECalc, the default CPI is around 2% - 2.5% and a withdrawal rate of 3.5% gives 100% estimated survival. If inflation averages 5%, that portfolio now fails almost 25% of the time. It takes a withdrawal rate of around 2.5% to get FIRECalc back up to 100%.
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Old 05-16-2014, 01:05 AM   #14
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After I graduated from college in 1985, I got my first and only regular job at a company which at the time was located in downtown Manhattan. I was also living in Manhattan at the time (as I did when i was at college - NYU) but after 9 months I did not like living there any more. I wanted to be able to own a car easily and go out and do things after work without having to rely on the subways (this was back in the 1980s when NYC was less safe). My family and most of my friends were on Long Island where I grew up, so that made returning there more attractive.

Housing costs were cheaper on LI but owning a car was not cheap, especially the insurance for a single male under age 25 (for a few more years, at least). By 1989 I bought my own place, a co-op apartment although mortgage interest rates, especially on co-ops, were high. Those interest rates fell quickly in the early 1990s which brought down my housing costs, eventually enabling me to pay off the mortgage by 1998.

I was able to ER by 2008 at age 45 after 16 years of working FT and 7 more PT. Yes, it is pretty expensive to live on LI between the income taxes and property taxes and car insurance premiums. In Manhattan it would cost even more, especially if I owned a car (or had kids, I am childfree). Parking alone in Manhattan would cost a fortune!
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Old 05-16-2014, 09:28 AM   #15
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I was out for my morning coffee and ran into a friend I had not seen in a few years. He was on his way back to NYC (Upper west side) where he lives with his wife.

They are a childless couple and he is much older than the wife. She lives in NYC full time and works as an executive for Ralph Lauren. He is a retired contractor/designer who used to renovate high end apartments. Since he retired
about 15 years ago, he spends 6 months in NYC and 6 months in Lima where he has an oceanfront Penthouse. In the 10 years I have known him, the wife has been down here twice for a few weeks at a time. I would guess they have at least 10 million as his apartment here is worth at least a million and I remember he lost 1.5 million with Allen Stanford years ago. So, I guess there are regular people who retire in NYC. I can not afford it now and If I had stayed, I would not have been able to retire at 33.
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Old 05-16-2014, 11:55 PM   #16
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After 58 years as a native New Yorker and spending most of my adult life after 17 in Manhattan, I left for Austin TX. Doesn't answer your question but I was unable to see living in NYC in retirement with the amount of $ we had on hand and what our future projections were. Now, if we had been in a rent-controlled apartment or had a city pension, it might have been another story.
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Old 05-17-2014, 07:11 AM   #17
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I have lived in Manhattan for the past 14 years. I retired here almost 3 years ago at age 47. My original plan was to quickly relocate to a lower cost of living, lower tax rate, better weather city, but I have remained here for a variety of reasons. I am in the process of evaluating options, but I would say the advantages of retirement in NYC include:

-Cost of living is high but the most significant expense compared with other places is housing. I read where the average rent in Manhattan is $4,000 and cost to buy in my neighborhood is about $1,000 per sq ft. I happen to already own my place and it has relatively low maintenance and property taxes, so I actually pay less out of pocket than I probably would if I relocated.

-Income taxes are very high in NYS/NYC but since I live off of investment income now my actual tax payments are not too terrible.

-Anyway, higher income tax costs are partially offset by far lower automobile expenses I would have to pay anywhere else. I have a car but rarely use it (park it on the street). I walk, bike, and take public transit most of the time. I could sell my car and my lifestyle would not change much.

-There is plenty to do in NYC to stay occupied and stimulated. One does not have to spend a lot of money for entertainment. In fact, there is a ton of free stuff to do, including free museum days, free concerts and opera in the park, free Shakespeare, etc etc.

-Lots of outdoors and recreational activities within 90 minutes of town. In fact I am headed to camping in the Catskills as soon as I finish typing this post.

-Plenty of international travel options from any of the 3 major airports. This makes it a great home base for anyone who wants to spend a good deal of time on the road or out of the country.

-The weather can be depressing at times, but the same could be said for most places. We had a tough winter, like much of the country, but there is nothing like a crisp spring or autumn day in NYC.

-It's fun to spend time with friends who visit from all over the country. There is a constant stream of old friends and family members who come to town to see the sights.

-Being middle aged and single, I don't feel too out of place in Manhattan. I imagine I could have a hard time making new friends if I relocated to another city where I didn't know anyone.

All in all, I would say NYC is a great place to ER for one who has housing and some of the other basics covered financially.
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Old 05-17-2014, 09:33 AM   #18
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... I have a car but rarely use it (park it on the street). I walk, bike, and take public transit most of the time. I could sell my car and my lifestyle would not change much. ...
Do they have a ZIP car, or other convenient, part-time car rental program near you? I would definitely consider that if it was available and I only used a car ~ 1/week (that seemed to be the inflection point for me when I looked into it).


Quote:
.... I happen to already own my place and it has relatively low maintenance and property taxes, so I actually pay less out of pocket than I probably would if I relocated.
If the cash flow works for you and you like where you live, you already have your answer. But from a technically correct economic view, you should consider the value of that home if you sold and bought elsewhere, or sold and rented and invested the cash. It's not really a 'fair' comparison to say cost-of-living is low w/o taking into account the money tied up in the house. But again, that is strictly from an economic view. Many decisions are not solely economic ones, especially where we choose to live. So if you are happy and can afford it, you get to do the 'happy dance' - congrats!

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Old 05-17-2014, 12:27 PM   #19
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NYC prices and cost of living a big joke

Lived in Manhattan many years now live in Anthem AZ where you can have same standard of living
on 40k a year that you would need 175k in Manhattan

Yes it is hot 4 months of year but not humid which is the worst 8 months of the year you have

dream weather no snow little rain blue skies no winter clothing expense swim golf tennis hiking etc

Have not used AC or heat since mid Sept to now mid May

Reasonable half day drive to beaches and glamour of Southern California

Easy to escape summer heat in Sedona and Flagstaff both just one hour north of Anthem

Pools and Water Parks abound everywhere to cool off in summer

All shops and restaurants have industrial strength AC in summer

Minimal bugs when enjoying out door living and cooking

Set AC at 78 June through September and ceiling fans very comfortable


Scottsdale a mini Manhattan many urban spaces with excellent dining and entertainment

Upscale and plentiful shopping in all directions

As much major sports as in NYC area plus spring training

Think Cards in football Diamond Backs in Baseball Suns in basketball Coyotes in Hockey

Sun Devils Pac 12 football baseball and basketball

Very few cities have that many teams and first class sports venues

Live on much much $$$ in Phoenix area and travel to NYC anytime to enjoy the city by using just a little of the money you save living in AZ

Phoenix is not a backwater now 6th largest city in US with many well paying jobs

North Scottsdale and North Phoenix in general is all new with excellent infrastructure very

organized clean and very safe

Museums and theater abound in a Phoenix certainly not Manhattan but quite respectable

Spend a few hours in Scottsdale to see my point about well paying jobs in a Phoenix

Most importantly people actually smile and say hello pretty refreshing

Any way if any of you out there need to know anything about AZ or Anthem let me know

Finally guys and gals I am not a realtor ha ha so no worries just an x New Yorker and Californian

who is a big fan of AZ

nyc boy
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Old 05-17-2014, 01:24 PM   #20
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It seems hard for many to understand that not everyone sees things how they see them, or indeed how the majority sees them.

People who live in big expensive cities certainly understand that they can be expensive, can be a times a bit hectic, that depending on how much you have to spend for your living space it may not be as absolutely private as you may feel that your suburban place is, but to some people these are minor matters compared to others. For example, it is very hard to become bored. Also, it is very hard to become fat, as you walk everywhere.

And it should be clear that not everyone is ecstatic from living in those great, wide open spaces, as is clear from this piece on suicide rates by state. The most urban eastern states tend to have the lowest rates.

10 States with the Highest Suicide Rates (Most Depressing and Suicidal States) - Insider Monkey

I would not ever criticize another's choice to live wherever he or she wanted to. After all, I am me, not them. My own brother who had the same urban childhood that I had, lives far from anything in some kind of planned upscale development in North Carolina, while I live in a very urban part of Seattle, less than one mile from Pike Place Market. It's not New York, but my life has been spent here, and I have taken steps to try to assure that health allowing, I will be here. If my family were in NYC, I would have done what the New Yorker posting above did- buy an adequate dwelling when I could, and if necessary do without some other stuff.

Ha
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