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Cost of living and Life Decisions
Old 08-01-2018, 07:25 PM   #1
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Cost of living and Life Decisions

The story of a Chicago Area Mayor who is moving his family because of taxes.

If there was one guy you’d think wouldn’t succumb to the pressures of living in Illinois, it’s Lakewood Mayor Paul Serwatka.
He’s a reformer and a fighter. In the past year he’s succeeded where most politicians refuse to go. He lowered the Village of Lakewood’s property taxes by 10 percent and eliminated a TIF district, going against the trend of higher spending and bigger tax bills in communities across the state. And he did all that without cutting services. He was showing Illinoisans what reform-oriented leadership could look like.
But every family that’s chosen to flee Illinois in recent years hit a breaking point and Serwatka finally hit his. For him, it was the risk he wouldn’t be able to care financially for his growing family
The article details the arithmetic that prompted the decision.
Brings some interesting questions. What brought you to where you are living now? Will this be your retirement home/location? Will the cost of living in the area affect your future decisions?

We have moved 22 times. In the pre-retirement years, decisions were made due to promotions and the cost of living ranged from very high to very low.
Upon retiring, the cost of living became the number one priority. While we still live in Illinois, (30 years later) the tax and cost of living savings between our current location and our previous location in today's dollars, closely approximate the total savings projected in the article.

Our pre-retirement home was near Naperville Illlinois. We now live in Peru, Il... Median household income in Naperville is $117K vs. $51K in Peru. Median Home value in Naperville $421K, in Peru, $161K.
The town are 63 miles apart.

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Old 08-01-2018, 08:52 PM   #2
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Having options is one of the best things to have, especially when it comes to taxes.

IIR it's one of the reasons Tiger and Mickelson moved to Florida, among many others.
From what I've heard CT is in "last person to leave turn the lights out" mode for the same reason, at least among the rich.
I wish I had a dollar for every person I know who moved from here in Mass, to 20 miles north to New Hampshire.

Your questions:
-What brought me to live in Mass? The Mayflower. Been here ever since.
-Will this be my retirement place? May through November it will; Florida the rest of the time. Roots run very deep; living in my great-grandfather's house. Not uncommon around here.
-Will the cost of living affect my decision? It's more about the weather and the general mindset of the populace that I can't handle anymore. Waiting for mom to pass (nothing in sight, though) before making any big changes.

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Retired @ 52 in 2005
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Old 08-01-2018, 10:37 PM   #3
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I have moved 30 times and lived in 5 states. 21 years ago I came to Nevada for a job and love it. Very mild 4 seasons, beautiful, no bugs, tons of stuff to do all the time. COL going up but we own our house. We went to my hometown Kenosha, WI and things were so cheap. We would have a lot more money if we lived there. However, would be giving up a lot and not worth it.
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Old 08-01-2018, 10:43 PM   #4
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I have moved 4 times in 40 years. I hate to move and I'm staying put.
Retired at 59 in 2014. Should have done it sooner but I worried too much.
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Old 08-02-2018, 12:11 AM   #5
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We live on the beach in So CA. What brought us here is the scenic beauty and the weather. We could have ERd at least 5 years earlier than we did if we had been willing to move to TX or FL, but we have many close friends in CA that I did not want to leave. So, it is our retirement home and we worked long enough so that we can afford to stay here indefinitely, hopefully forever.

Having said that, the politics here are frustrating to us, and the already high COL keeps going up. Also, as we get older, an even warmer climate is appealing. We may move someday but I think its fairly unlikely. Wed probably just scale down our lifestyle here if we needed to from a financial standpoint. Or if we need a warmer climate, maybe we would buy a second home in Palm Springs.
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Old 08-02-2018, 06:16 AM   #6
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We have moved 6 times over the years and lived in 4 states - OH, DE, NJ, and MI (last). For a long time we thought that when we RE'd, we would move back to OH, but we are going to stay in MI. Our kids and other connections are here, COL is about the same, it is a lot simpler to stay, OH is not that far off, so no real driving force to change.
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Old 08-02-2018, 06:30 AM   #7
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Moved many, many times in my military years, and unfortunately it was often to very high COL areas (LA, NYC, Rio, etc. ).
Enough of that noise. Very happy now in flyover country with a fairly low COL. Since DW has lived within about 25 miles of here her entire life, our next move will likely be with toe tags attached.
I thought growing old would take longer.
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Old 08-02-2018, 06:47 AM   #8
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COL makes a huge difference. Raised in Ohio, moved to NJ for my job at age 25. Lived there for 25 years, married, managed to save some but was pretty much house-poor.

God works in mysterious ways. The job market dried up after 9/11 and the small consulting firm where I worked was struggling. I was a single mother, no child support. (The Ex wouldn't have paid it anyway.) Finally, a job turned up in the Kansas City area. I was engaged to a man born and raised in - Kansas City. So, when I was 50 and he was 65, we married and moved here. We both did very well on the sale of our houses in NJ so we had plenty to add to the retirement savings and bought a McMansion that was twice the size of my place in NJ at half the price. Bonus: DS was able to buy a house in Des Moines after college and he's married with two wonderful little girls. Would not have happened in NJ.

I retired 4 years ago at 61 and although DH and I downsized 3 years ago and DH died in late 2016, I'm still here. Will move to Des Moines when I need Assisted Living and I hope that's not for a long time.
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Old 08-02-2018, 06:58 AM   #9
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Back in the mid-to-late 1980s, just after I graduated from college, I moved 4 times in less than 2 years between Manhattan and Nassau County (Long Island). I was trying to find a balance between having mobility and having a tolerable commute to my job in lower Manhattan. Two years after that 4th move, I moved one more time about 2 miles away from a rental apartment to a co-op apartment. I have been here ever since, nearly 30 years ago.

While it's cheaper to live on LI compared to Manhattan, it ain't cheap living here. Property taxes, income taxes, car insurance, health insurance, electricity, everything is expensive here. But my salary was relatively high, too, allowing me to be able to afford to stay here instead of being part of the oft-mentioned "brain drain" where people my age finished college but moved away from LI to lower COL places.
Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

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Old 08-02-2018, 07:11 AM   #10
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My choice was between the Chicago area and Kansas City. At the time, I wasn't making that much money. Like Athena53, I found a house twice the size in KC for half the price. Once my business took off, I heard stories like this article and was relieved I had made the right decision.

Except it turns out that income tax in Missouri is higher than in Illinois. Plus in addition, there is a KC municipal income tax of 1%, totaling 7% vs Illinois' 4.95%.

My property tax (1200) is less than a comparable Chicago house would be (6200), but I have found a 1600/yr property tax on the far south side of Chicago. I don't know how payroll & employer taxes compare, which is an issue since I operate an S-Corp. In short, with all the complaining about Illinois taxes I actually pay higher income tax in Missouri, although the real estate market is less expensive in many cases. I suppose it's a trade-off. For me, my industry is concentrated in Chicago, so there would be better work opportunities there. But KC is a greener city that is more easily navigatable. I'm just beginning to invest in real estate rentals, and it seems my investment goes farther in KC.
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Old 08-02-2018, 08:04 AM   #11
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Originally Posted by HighOnLife View Post
<snip>Except it turns out that income tax in Missouri is higher than in Illinois. Plus in addition, there is a KC municipal income tax of 1%, totaling 7% vs Illinois' 4.95%.

<snip>But KC is a greener city that is more easily navigable. I'm just beginning to invest in real estate rentals, and it seems my investment goes farther in KC.
Yeah, the income taxes are bad- and both KS and MO tax SS if you have any other decent income, which is pure greed. (The Feds claim they use the taxes on SS to shore up the SS system- the states that tax it can make no such claim.) Still we came out ahead because of the smaller mortgage and MUCH lower property taxes. I see that the nice little 3 BR Cape Cod (OK, it had a swimming pool) that I sold in Bergen County now has taxes of over $10K/year. I'm paying under $4K/year here on a nicer house.

You're right about navigability. I rarely went into NYC other than for business because it was a PITA. Here, I can go to a concert in a world-class music hall and be back home in 45 minutes.
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Old 08-02-2018, 09:13 AM   #12
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We agreed before we got married that it was important to live in a place that makes us happy and that we were willing to make some compromises in order to have the life we wanted in a So Cal beach town. Compared to friends and sibs who were moving to low COL places, we knew we might have to work longer, have fewer children, take fewer extravagant vacations, buy a condo instead of a house, etc. Thirty-one years later, I can say that the choice we made has worked out for us and through some good luck and hard work there were definitely fewer sacrifices than we envisioned.

We're still happy and staying put.
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Old 08-02-2018, 09:26 AM   #13
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I'm used to the high COL here in NJ, but at least we don't live an exorbitant lifestyle. From a strict dollars and cents perspective I'd love to leave for a lower COL area. But both my kids - and the 4 grandchildren - are nearby so there's no way I'd leave.
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Old 08-02-2018, 09:39 AM   #14
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The COL is definitely a factor in where I have chosen to retire, but not the most important one. I have no interest in moving to Alabama just because the house prices and real estate taxes are significantly lower than in Michigan which is my (initial) retirement destination. On the other hand I would have seriously considered California as a possible destination if it wasn't for the super high COL there.
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Old 08-02-2018, 09:58 AM   #15
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I too have moved way too much (a "perk" of the military) and have never enjoyed it. Back in 2012, I was able to relocate back to my home town (outside of Atlanta) and I thought it was going to be great. Well, Atlanta has changed significantly from 1993-today...and changes that I do not like. The COL is pretty reasonable and I live in an area that has one of the best local governments I have had the "pleasure" of paying taxes to.

Now that my Dad has passed on, there is nothing keeping us we will soon be moving to OKC to be closer to DW's family. I was stationed in that general area a while ago and I really liked it there. The city is big enough to have many of amenities of a big metropolis but small enough that you can purchase land/homes for what I think is a reasonable amount of $. And traffic? So much better than here in ATL! As far as COL, most numbers show that OKC and ATL are very similar, so that doesn't weigh into it all for us.

We are thinking that we will be building our "forever home", so that means two more moves (one to a family rental, then the built house). We are in process of downsizing our home while also dealing w/ Dad's estate, so I am growing tired of the whole thing. I am very anxious to get there and get settled.
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Old 08-02-2018, 03:15 PM   #16
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What brought you to where you are living now? Work. I like the work culture here a lot.

Will this be your retirement home/location? Unlikely. Most of my social life is in this country and back home, but spread out (in European norms, half hour to two hour drives). Then again, I don't have a large circle of friends.

Will the cost of living in the area affect your future decisions? Absolutely, specifically wealth-related taxes. Which is probably #1 reason to leave, at least for a while. If I need medical help it's also heading home for me. I already moved out of Amsterdam two years back, one factor being cost and tourist pressure.

If I weren't involved with my current activity, I might start moving between several low COL countries and a few higher COL countries, but in the low cost areas. Follow the seasons basically.
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Old 08-02-2018, 04:07 PM   #17
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What brought you to where you are living now? Work. We were in Atlanta and was asked by my company to take a role that required us to move here, to Chicago.

Will this be your retirement home/location? Certainly not. While we love Chicago, we are truly Southerners. Most of our family and friends are there. Also, Chicago is too far from the mountains or the coast.

Will the cost of living in the area affect your future decisions? Absolutely. In addition to the points above, the high COL in Chicago is another driving force. When we leave, we'll be able to sell our place here, pay cash for our retirement home and have a lot left over to add to our next egg.

So, as soon as DD graduates high school, in 7 years, we are outta here and headed to somewhere around North GA, Western NC, Eastern TN.
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Old 08-02-2018, 04:12 PM   #18
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Property taxes here are 4 times as high as Denver but we made enough off our Denver house to cover buying a larger house and paying property tax increase for 10 years. We wanted a rural life style and near one of our scattered children. We did not want to move back to the south.
I have lived in 9 states and Germany. I was a little tired of moving. I plan to die here.
Only been retired for a year, so still feeling our way. Haven’t had to liquidate any investments yet, RMD start next year.
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Old 08-02-2018, 05:21 PM   #19
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What brought us here was primarily escaping the traffic in the Washington, D.C. area and secondarily the lower COL. Also DW insisted on being within an hour drive of where her father and brother/niece were living. Having lived in the D.C. area all our lives we were completely unprepared for the dramatically lower housing prices. Our house 10 miles from the D.C. line was paid for and we bought a new, larger house in WV. It's a nicer home than either one of us ever thought we'd be living in at the time. And, of course, we paid cash. Our next planned move will be to a CCRC.

Property taxes are significantly lower. I just mailed the check yesterday for the property taxes and personal property taxes for $1522.12. Where we used to live I'm sure it would be four or more times that. We do get a slight break because I'm over 65.

Gasoline, groceries and utilities are a little cheaper but not significantly so, I'm thinking mostly because of lower land prices and somewhat lower salaries than in the D.C. area.

COL and admission costs/rent will definitely factor in to where that CCRC is. We can afford many of them but certainly not all.
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Old 08-02-2018, 06:06 PM   #20
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The missus and I were both born, raised, went to school, and work in Vancouver all our lives (save for me doing some extended work assignments abroad). I see us retiring in Vancouver other than trying to travel when the weather is a bit icky in the late fall and winter. Cost of living in Vancouver isn't a deterrent because we're working a bit longer to build enough of a buffer.

Housing cost is the big issue in Vancouver. But we were lucky that we bought before the spike in the early 2000's that's been non-stop save for a blip during the 2008/9 recession. Fuel costs are also an issue due to the lack of refineries in the area but we try to get by with only 1 car, using car-sharing, taking transit. Property taxes have risen faster than inflation the last decade because of a variety of fluffy initiatives by the party in power at city hall, some excessive city worker contract settlements, and a rebalancing of the property tax split towards residents in an effort to attract businesses and industry. I suspect the current party in power will be tossed out in this fall's elections. I just want the city to provide basic services.

Target April 2022
"Life moves pretty fast. If you don't stop and look around for a while, you could miss it."
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