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Anybody retire to a higher cost area?
Old 08-23-2011, 04:19 PM   #1
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Anybody retire to a higher cost area?

I am finding we really need a change. But we're also finding everywhere we like better costs 20-50% more for housing, and slightly more for everything else. My increasingly LBYM POV makes it nearly impossible to accept higher costs. You always read about retirees relocating to lower cost areas, but higher?

I am sure we'll stay put or find a way to justify the additional expense in terms of quality of life (like I could quantify that...)

Sigh...
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Old 08-23-2011, 04:45 PM   #2
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We initially retired to a lower cost area (not a choice driven by cost) when we moved back to the US from Europe. We are now considering a move in the next couple years either back to Europe or to an urban area, both of which would be a significant bump in cost of living.

In the end, subject to available resources, you have to be where you can be happy with your choice. I've never made a choice of where to live due to cost or taxes and never will.
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Old 08-23-2011, 04:54 PM   #3
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Often people downsize when they retire, and the lifestyle becomes less extravagant and more frugal.

But for me, that would only be satisfactory to a point. If I moved to a very expensive location, I worry that I would end up living in a tiny, dingy old condo in poor repair with felons as neighbors and parties going on all night.

Presently I enjoy living in a nice 1600 square foot median priced home in a nice, quiet, safe neighborhood near everything, and doubt I could afford that in places like San Francisco, NYC, or Honolulu.

Perhaps you could spend six months renting in one of these places, before putting your present home on the market. That might give you some idea of what a lifestyle on your planned ER budget would be like in that location.

Choosing a location, any location, involves trade-offs. As long as you know what they are, you will make the right decision.
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Old 08-23-2011, 05:19 PM   #4
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We are wrestling with staying in the high-cost area we live in, which we like, versus moving to places where we could save on state taxes but might not cotton to for other reasons. I think it would be possible to devise a quality-of-life quantification scheme, the trouble is getting good data from a distance

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I am finding we really need a change. But we're also finding everywhere we like better costs 20-50% more for housing, and slightly more for everything else. My increasingly LBYM POV makes it nearly impossible to accept higher costs. You always read about retirees relocating to lower cost areas, but higher?

I am sure we'll stay put or find a way to justify the additional expense in terms of quality of life (like I could quantify that...)

Sigh...
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Old 08-23-2011, 05:29 PM   #5
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I could definitely see it if the portfolio would support the costs. While you are working your job often controls where you live. When you retire you are looking at lifestyle.
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Old 08-23-2011, 05:44 PM   #6
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I am finding we really need a change. But we're also finding everywhere we like better costs 20-50% more for housing, and slightly more for everything else. My increasingly LBYM POV makes it nearly impossible to accept higher costs. You always read about retirees relocating to lower cost areas, but higher?
If you're going by one of those "top 10 places to retire" lists, the data may not necessarily apply to your lifestyle.

If you're doing your own budget research for the size of house and the neighborhood you can live with then you might be able to come in at less than the media summaries.

For example: "Hawaii is so expensive". Well, yeah, the land costs a lot. But the houses are built cheaper than the Mainland. The property taxes are a lot lower than most of the rest of the U.S. Most of the island's livable areas don't need much in the way of heating or cooling or insulation. You don't wear shoes or socks that often, let alone formal clothing or winter wear. You eat local cuisine instead of Mainland, which is about the same price per serving of fruit or fish. You pay a lot more for a gallon of gas, but you drive a lot less distance.

I didn't figure any of this out from living in northern California on our way to Hawaii because the data and lifestyle info was hard to come by. A few years later when we had to move from Hawaii to San Diego, it was immediately obvious that our expenses (especially utility bills) had jumped way up. When we returned to Hawaii it was just as clear that our expenses had dropped again.

When you're ER'd, too, you'll have plenty more time to shop for bargains and to thoughtfully examine the need for each purchase.

I think the best suggestion is to rent at your dream location for a couple months, drive the neighborhoods, shop in the grocery stores, and start talking to the realtors. You may find more beneath the surface than you expected.
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Old 08-23-2011, 07:24 PM   #7
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I plan to rent for 6-12 months (youse guys already convinced me). The cost of living there is 20% higher, mostly because homes are 50% higher. The higher home cost doesn't bother me as much as 2x property taxes. And state income taxes are about 2x also. So I'll have to think about it for a while, and we're in no hurry at all. If we stay where we are, we are going to downsize anyhow, so we have the luxury of putting our stuff in storage, and then decide whether to make a permanent move or just downsize in the current area. Not a bad situation all considered...
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Old 08-23-2011, 07:54 PM   #8
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I plan to rent for 6-12 months (youse guys already convinced me). The cost of living there is 20% higher, mostly because homes are 50% higher. The higher home cost doesn't bother me as much as 2x property taxes. And state income taxes are about 2x also.
Well, now you're just sellin' the heck outta the place.

It must have really really good weather, or great surfing, or... sorry. Can't think of anything else worth those expenses.
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Old 08-24-2011, 09:46 AM   #9
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....

The higher home cost doesn't bother me as much as 2x property taxes. And state income taxes are about 2x also. ...
You might want to look at the past 10-15 years of property tax allotments. As is common, ours are allocated across all the homes in the tax district, so if everyone's home doubled or dropped in half, the property taxes would remain the same. But the amount of our property taxes have been rising faster than inflation. It's getting to be a significant part of our budget.

-ERD50
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Old 08-24-2011, 10:28 AM   #10
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It can happen -- and if your nest egg allows it to happen, there are several reasons one might do this -- for the "right" weather, to be near the grandkids, or anything else. I've known folks who have done it for precisely these reasons.
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Old 08-24-2011, 01:27 PM   #11
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I moved in retirement from a somewhat lower to a somewhat higher cost area. I moved from a more distant area of WA to the center of the City of Seattle, a huge RE cost difference. The reason was divorce and loneliness. No way would I have made a spreadsheet to quantify the differences. It's my life, and it will one day end, so I am going to enjoy it and tending a garden by myself sounds about as enjoyable to me as overwintering in Nome.

Interestingly one of my friends in our building is planning the reverse move- from very urban to resorty and rural, quite nearby to my former place. But he has a companion who is going in with him.

I wouldn't have had much trouble hooking up in my former spot, but at this stage in my life I want maximum backup. Safety in numbers, doncha know.

Also, I was getting pretty tired of storms and power outs that went on and on. The big trees that visitors find so attractive sure like to fall through power lines, and it can get to be a bother.

Ha
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Old 08-26-2011, 08:20 PM   #12
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I moved in retirement from a somewhat lower to a somewhat higher cost area. I moved from a more distant area of WA to the center of the City of Seattle ..
Just returned from Seattle - nice city with plenty of shorelines. The downtown area has plenty of shops and museums. It even has a decent size Chinatown. There's no state income tax and the sales tax is not that bad (9.5%).
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Old 08-26-2011, 10:51 PM   #13
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If you're going by one of those "top 10 places to retire" lists, the data may not necessarily apply to your lifestyle.

If you're doing your own budget research for the size of house and the neighborhood you can live with then you might be able to come in at less than the media summaries.

For example: "Hawaii is so expensive". Well, yeah, the land costs a lot. But the houses are built cheaper than the Mainland. The property taxes are a lot lower than most of the rest of the U.S. Most of the island's livable areas don't need much in the way of heating or cooling or insulation. You don't wear shoes or socks that often, let alone formal clothing or winter wear. You eat local cuisine instead of Mainland, which is about the same price per serving of fruit or fish. You pay a lot more for a gallon of gas, but you drive a lot less distance.

I didn't figure any of this out from living in northern California on our way to Hawaii because the data and lifestyle info was hard to come by. A few years later when we had to move from Hawaii to San Diego, it was immediately obvious that our expenses (especially utility bills) had jumped way up. When we returned to Hawaii it was just as clear that our expenses had dropped again.
This is what we found when we stayed semi-long term on Maui. All our friends thought we were crazy because everything on Maui was crazy expensive. But we found a bunch of locals, mainly teachers, and lived like they did, sharing the price of two gallons of milk and 1.5 dozen eggs between us for less than 1.25 times the price of a single gallon/dozen. Hubby found a couple of friends with boats and went fishing with the boys for the price of gas and beer, all fish divided up at the end and excess sold to restaurants to offset the gas.

We ate local food, did free stuff, beached a lot and didn't buy trinkets. We spent less for a month than a friend of ours spent in a week at the Sheraton, hee. Dang I hope we're not making a mistake moving to NC.
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Old 08-27-2011, 08:40 AM   #14
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I am finding we really need a change. But we're also finding everywhere we like better costs 20-50% more for housing, and slightly more for everything else. My increasingly LBYM POV makes it nearly impossible to accept higher costs. You always read about retirees relocating to lower cost areas, but higher?
Unless you are retiring to the NYC area or San Francisco, it's hard to imagine that your costs will be higher than Chicago.
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Old 08-27-2011, 09:52 AM   #15
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We have always lived in a comparable high-cost area (close to NYC/Phila) with no plans on moving, upon retirement.

I guess you can say that we just continued to live in a high-cost area (although we're looking at Maui as an alternative, starting our search early next year).

As far as Maui (which we've traveled to more than a few times), our projection of living there is equal to our current costs, so we see it as a "wash".

However, cost is only one consideration on the area you select to live in "for the rest of your life"...
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Old 08-27-2011, 11:24 AM   #16
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Dang I hope we're not making a mistake moving to NC.
Well, if you have to ask, then I guess you're not a surfer...

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I guess you can say that we just continued to live in a high-cost area (although we're looking at Maui as an alternative, starting our search early next year).
As far as Maui (which we've traveled to more than a few times), our projection of living there is equal to our current costs, so we see it as a "wash".
However, cost is only one consideration on the area you select to live in "for the rest of your life"...
One significant issue which always gives us pause is the driving time to grocery stores, home improvement stores, and hospitals.
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Old 08-27-2011, 03:04 PM   #17
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One significant issue which always gives us pause is the driving time to grocery stores, home improvement stores, and hospitals.
With more and more emphasis on "hospitals" as we get older and older...
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Old 08-27-2011, 03:21 PM   #18
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Whenever I moved during my working years - usually talked to the locals who didn't have the 'big bucks' jobs and learned how they survived on a 'frugal?' budget.

Picked up all kinds of information even in high cost areas.

heh heh heh - Portland, Seattle, Denver, Baltimore, Long Island, Huntsville AL, New Orleans and perhaps some I skipped.

Now in the burbs but as each year goes by the 'Big City' part of Kansas City - apartment or condo is looking better and better.
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Old 08-27-2011, 03:39 PM   #19
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Unless you are retiring to the NYC area or San Francisco, it's hard to imagine that your costs will be higher than Chicago.
I live in a distant suburb, not in Chicago. And we're looking at Chapel Hill NC, it is a good 20% higher, mostly due to real estate about 50% higher as I mentioned earlier. We may have to settle for another part of the Triangle area...
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Old 08-28-2011, 09:16 AM   #20
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This is one of our concerns also. We live in a very low cost area now (suburb of St Louis). We are currently thinking moving to the PNW, specifically OR. The cost of living is much more there, especially the housing.

We are wondering if we are better off staying somewhere more affordable that is less polluted, less traffic, etc. (than St Louis) like Columbia, MO, Traverse, MI, etc. where we can afford our "dream house" and just travel when the weather is "oppressive".

Anyone decide to do something like that instead of going to the higher cost location?
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