ER in NJ and other high cost of living areas

[walkinwood]

Hello,
We live in NJ and love it here (no "which exit?" comments, please ) and would like to continue to live here after we retire.

By then, we will own our house, so real-estate prices are not an issue.

I see the huge property taxes being the big difference between living here and in less expensive parts of the country. Auto insurance is higher too, but the bite isn't as much as property taxes. I don't know how medical care compares.

I'd like to hear from other people who have taken early retirement in high cost of living areas. Am I missing other costs that are much higher in places like NJ?

Any tips?

Thanks. This is a wonderful forum and I've learned a lot from it over the past few days.

 

[Scrooge]

I don't know how medical care compares.

It's quite expensive in NJ because it's a "community rated" state - see http://www.tnhis.com/nj.htm :

Average Cost for an Individual Policy Sold in 2004: $340/month*  (single, average age 38, healthy)

...every policy sold in New Jersey is effectively a state risk pool policy because all citizens must be accepted (“guaranteed issue”) at the same premium (“community rated”) regardless of their health. Both HIPAA-eligible applicants and applicants who are not HIPAA-eligible are guaranteed a policy at the same community rate.

 

[brewer12345]

I'm at 120. Which exit for you?

 

[lazygood4nothinbum]

i seem to always wind up in high cost bubble areas. first bergen county exits 15 thru 18, now fort lauderdale and later in life likely i'll be living on a boat, also at high cost and also i'll be watching for bubbles.

those of us who bought before the bubble in south florida are protected from high property taxes by a 3%/yearly cap. i don't know what's going to happen to insurance costs but it aint lookin good.

another aspect to consider is general cost of living. here i head over to einsteins in the morning for a bagel without even a schmeer and an orange juice and i'm out 5 bucks. i was in tampa the other week, stopped off for the same thing at the same place only there, not here, and the cost was about 1/2 the price.

so it's not just the property taxes you pay, apparently it's the taxes and rent your bagels pay too.

 

[brewer12345]

A 'lil more detailed answer from me, now that I don't have a crying baby on my lap.

I think it is quite possible that I will be exiting the Garden State eventually after I retire simply due to the very high cost of living relative to other areas of the country. I suppose if I have a big enough pile, I will have the option of staying, but its too hard to see what things will be like several years out.

The good:

- friends and family are here
- beaches, parks, pine barrens, fishing, etc. NYC and Philly are nearby, with all their amusements
- if you ae not in rude health, you can get health insurance anyway, since NJ forces insurers to take all comers
- if you wish to continue dabbling in a business or profession of some sort, the vibrant economy should offer lots of opportunities
- almost certainly lots of future RE appreciation over the next 10+ years (no guarantees on the next 3 though)

The bad:

- galloping property taxes
- underfunded state pension system that will put pressure on taxes for years to come
- while you are assured of getting health insurance, you are also assured of paying through the nose for it
- with all the people coming to NJ, we are being "loved to death". IOW, it is getting a tad crowded for my taste in much of the state.
- generally high cost of living

So I guess we will see how things play out. I suspect I will be here until my kids are in college, since I have no interest in uprooting them, and in fact have gone to great lengths thus far to avoid doing so.

 

[dumpster56]

A 'lil more detailed answer from me, now that I don't have a crying baby on my lap.

I think it is quite possible that I will be exiting the Garden State eventually after I retire simply due to the very high cost of living relative to other areas of the country. I suppose if I have a big enough pile, I will have the option of staying, but its too hard to see what things will be like several years out.

The good:

- friends and family are here
- beaches, parks, pine barrens, fishing, etc. NYC and Philly are nearby, with all their amusements
- if you ae not in rude health, you can get health insurance anyway, since NJ forces insurers to take all comers
- if you wish to continue dabbling in a business or profession of some sort, the vibrant economy should offer lots of opportunities
- almost certainly lots of future RE appreciation over the next 10+ years (no guarantees on the next 3 though)

The bad:

- galloping property taxes
- underfunded state pension system that will put pressure on taxes for years to come
- while you are assured of getting health insurance, you are also assured of paying through the nose for it
- with all the people coming to NJ, we are being "loved to death". IOW, it is getting a tad crowded for my taste in much of the state.
- generally high cost of living

So I guess we will see how things play out. I suspect I will be here until my kids are in college, since I have no interest in uprooting them, and in fact have gone to great lengths thus far to avoid doing so.

We did it we left. Sold the place in warren cty for up over 500K, took 300K and bought a beauty in NC near Raleigh, taxes less than 3000 a year. Car insurance 1000 less a year. My plan is still to finish about 15 more months teaching up in NJ while staying with daughter, sister and other friends, heck even at a nice hotel some weeks. then leave with the ER around jan 2008 or july 2007.

No place is perfect, NJ has its moments lived there for 44 years, for me it was time when my taxes were pushing 8500 a year and had no services. Heck down here my trash sewer bill is also 1000 less a year than I was paying in NJ.

 

[Rich_by_the_Bay]

Sometimes the cost of living between locations is not as great as it appears.

We find that living in a fairly expensive area (Tampa Bay), there are costs that seem way out of line (homeowners insurance, upscale housing, property taxes mainly). But when you factor in lack of a state income tax, a 3% cap on property tax (high, but stable), and proximity to recreation it probably only costs us a few thousand dollars more than many other places. All in all, we're happy here and willing to pay a small premium for that. You gotta look at the whole picture.

By all means if you are not happy with your locale, or if you seek a lifestyle change, go for it. But moving in an effort to maintain a similar lifestyle but at much lower cost may not save as much as you think when all is said and done.

 

[HFWR]

As a point of reference, my water/sewer/trash bills averaged $65/mo. last year.

 

[dumpster56]

As a point of reference, my water/sewer/trash bills averaged $65/mo. last year.

Our sewer bill was 600 a year paid 150 quarterly

Our Trash bill was 300 a year paid 75 a quarter

Our water bill was 625 last year about 160 a quarter

Total 1525.00

down here in NC our water sewer and trash are running 45 a month

545.00 a year. a big difference.

 

[justin]

down here in NC our water sewer and trash are running 45 a month

In incorporated Raleigh, mine's around $30-35/month for sewer/water/trash/recycling/stormwater. It's doubled in the last 5 years or so when it used to be $15/month.

 

[Rich_by_the_Bay]

Our sewer bill was 600 a year paid 150 quarterly
Our Trash bill was 300 a year paid 75 a quarter
down here in NC our water sewer and trash are running 45 a month

In follow-up of my post about COL differences being trickier than they might appear, in my higher tax neighborhood twice-weekly trash pickup, sewer, brush and large trash hauling and reclaimed water (owner pays to hook up) and one of the best high schools in the region are included in our taxes.

 

[Scrooge]

By all means if you are not happy with your locale, or if you seek a lifestyle change, go for it. But moving in an effort to maintain a similar lifestyle but at much lower cost may not save as much as you think when all is said and done.

Very true. Underestimating the cost of living in your new neighborhood ("But everything is so much cheaper in the boonies, dear!") appears to be common. I suspect that it's the second leading cause of what they call "churning" right after unexpected lifestyle changes. What do you mean I can't order pizza after midnight?!

 

[justin]

What do you mean I can't order pizza after midnight?!

You guys can order pizza??

 

[Gone4Good]

What do you mean I can't order pizza after midnight?!

Better the devil you know.

I also live in NJ and have often thought of moving somewhere cheaper. $11K for health insurance is one that really has me steamed. But I figure quitting my job will be enough of a life altering change all by it self that maybe simultaneously relocating to a new, and strange, environment isn't the best course of action. Unfortunately that means working a little bit longer than I'd have to if we decided to up and move to the boonies.

As mentioned by others, I also wonder how much money I'd really save by moving. Certainly I'd be able to pull a bundle out of my house . . . but then I'd probably swap my 1,000 sqf appartment for a larger place and wouldn't save quite as much. Healthcare would be cheaper . . . but would it end up costing more if one of us got really sick? Most other stuff seems to be roughly the same price wherever you go, so how much cheaper would it be?

 

[Rich_by_the_Bay]

Certainly I'd be able to pull a bundle out of my house . . . but then I'd probably swap my 1,000 sqf appartment for a larger place and wouldn't save quite as much.

Not to mention the actual cost of moving, closing costs, fix-up the new place, etc. Takes a nice bite out of your proceeds.

 

[kat]

Golly gee...... I pay $10 a month for water/sewer/trash. And my property taxes are less than $3k.

Where am I?

NEW YORK

 

[brewer12345]

Uhuh, but if we are talking about NYC, you have to tell them about the 9 or 10% local income taxes.

 

[walkinwood]

Hello,
Thanks for all the feedback.

Made me go back and look at annual cost of utilities
- Garbage - $372
- Sewer - $150
- Water - $294

While these are higher than in the low cost areas, they are not large numbers.

Car insurance is a slightly bigger number, but at about $1000, not that big.

Property tax on the other hand... oy ve!! we pay $10,000 for a plot that is 50' x 100'. That is in feet!! The value of the house is probably somewhere between $450-$500K. This is the part that I can' stand because property taxes elsewhere are 20%-30% this LARGE number. Let's hope the extra 1% in sales tax (6% to 7%) allows them to lower property taxes.

We will have to pay our own health insurance for close to 15 years (plan to ER at 50), so I like the fact that NJ insurance companies charge everyone the same irrespective of whether you are sick or not. I think $10-$12K a year is a LOT, but better than being denied if something were to go wrong.

I'd like to hear what other people are paying for Medical Insurance in other states.

Besides, the gas station attendant fills gas in your car here.. its great when it's freezing outside. And the bagels are GOOD and probably less expensive than Ft. Lauderdale!.

 

[justin]

Car insurance in $400/yr for me with comprehensive and collision being a big part.

Property taxes? $1300 on the house (that's per year, not per month!) and $80 on the car. 1.01% of the appraised value. Ya'll northerners are killin me!

 

[walkinwood]

oh, and it seems that a few of you are in high cost of living areas. Are you retired already?

Brewer? Rich in Tampa? Lazygood4..., 3 yrs to go? kate?

If so, any surprise post-retirement expenses related to your location?

 

[Scrooge]

Made me go back and look at annual cost of utilities

Utilities can be rather unpredictable. Your water bill will be likely lower in Potomac, MD, one of the most prosperous areas in the country, than Carbondale, Illinois, one of the poorest area. But a visit to the best restaurant in Carbondale (I know, that's not saying much ) will cost you a fraction of what a vist to a comparable place in Potomac will.

 

[Rich_by_the_Bay]

oh, and it seems that a few of you are in high cost of living areas. Are you retired already?

Still working, 3 years to go. But, the house is paid off and we plan to retire on about the same monthly expenses we have now, adjusted for inflation.

Tampa probably is not in the same league as the higher profile "expensive places," though. According to this site, it is a little over half the cost of NYC, 30% less than San Diego, and even a tad less than Charlotte. It's in-town houses that get you here, and that's just where we live.

 

[Gone4Good]

oh, and it seems that a few of you are in high cost of living areas. Are you retired already?

Brewer? Rich in Tampa? Lazygood4..., 3 yrs to go?  kate?

Not yet. I still have "3 yrs to go"

 

[jclarksnakes]

Walkinwood,
....I think folks here have posted some very good info. In your original post you wrote

"By then, we will own our house, so real-estate prices are not an issue"

I look at this very differently. Real estate prices represent how much you could get selling the house (minus commissions and moving expenses) to live somewhere else. It is an important part of the overall financial picture. It does sound like you like NJ so well that you may just stay there after you retire. We are trying to decide where to live after we retire and staying put here in Savannah GA where real estate prices are relatively low is a very real possibility.
jc

 

[brewer12345]

oh, and it seems that a few of you are in high cost of living areas. Are you retired already?

Brewer? Rich in Tampa? Lazygood4..., 3 yrs to go?  kate?

If so, any surprise post-retirement expenses related to your location?

Nope, still a working stiff.