Retiring in California: An Oxymoron?
Hi,
I'm new to this forum, having discovered it weeks ago. I enjoy reading your posts, they're very helpful. About myself:
- 41 yrs old,male, married; wife is 39 yo; one child 7 years old
- I'm a physician (internist), wife is a medical technologist
- I am self-employed, a partner at a 5 doctor medical group in rural western Illinois; I've practiced here for the last 10 years since finishing residency training
- our annual household income has ranged from $120k to 230K over the last 10 years
- we have no student loans (our parents paid for the entire cost of our education)
- our only debt is our mortgage (balance of $160K);
-our net worth is $680k; this includes $80k we have saved up for my daughter's 529 plan, and $80K of equity in our house; the bulk of our net worth is in Vanguard index funds tucked away in our SEP-IRA.
We are quite frugal (I think). My car is a 10 yr old 1997 Ford Taurus. My wife drives a 2004 Toyota 4 runner. We intend to keep both vehicles till they conk out. Living in rural Illinois where the cost of living is below the national average has certainly helped. Our work place is only 5 minutes from home (10 minutes on a bad wintry day).
Based on surveys of physicians' net worths that I have seen, we are in better shape than the majority of them who are at our age and income level. Unfortunately, we may not yet be ready to retire due to our late start in investing (we started when I was 30 years old). My daughter's education expenses also still need to be fully funded (we intend to pay for the whole thing up to grad school/med school/law school if she goes that route). We could pay off our mortgage anytime as we have enough cash for that, but I feel more comfortable being liquid at this time.
Sorry for all this rambling, but my real point is this: we've been quite blessed financially here in Illinois, but we have also gotten quite bored. The town is small (18000 people), there are very few cultural activities, and the nearest major airport is 3.5 hours away in Chicago. During winter, we feel we are trapped here. All we can do is work (to fill up our bank and investment accounts). After 10 years of doing this, we feel that we sacrificed our youth simply to fatten our retirement accounts. We've isolated ourselves from family to focus on our careers. Is this really the way it should be till we drop dead? My wife and I are about ready to relocate to a bigger city. My daughter will also be able to attend a better school district there.
We have looked at California as our destination since my family lives there (in Downey, a suburb of LA). My wife's family lives in the Sacramento area. We are planning to eventually retire in California. I have received job offers in the LA area for $190K to join a multispecialty group, and also in Sacramento for $160k. My wife has no job offers yet, but given her profession, we don't feel she will have a problem finding a job.
I am conflicted about this relocation plan because California is an expensive state, as you all know. We intend to continue our frugal ways, but given the cost of living there, I expect our finances to definitely take a hit, and this will set back our early retirement plans. If we stay in Illinois, we will probably be able to retire in 10 years at the rate we are saving and investing. But we have no family in the Illinois town we live in; we have many good friends here, but we still feel like outsiders despite our 10 years of residency in this small agricultural area. We feel like we don't belong here. I am still being asked how long I've lived in this town by well-meaning yet naive locals. I am not easily offended, it's just irritating to hear questions like this.
So the choice boils down to this: hunker down in our little Illinois town - with its terrible winters and lack of cultural amenities - save and invest big bucks, then retire early; or move to California, be with family and friends, and shelve early retirement plans indefinitely. I am presenting this dilemma on this forum not to get specific advice from you but just to get a general feel for what the more experienced members of this forum would do if faced with a similar situation.
Thanks in advance.
ndfmnlf