Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Impact of expensive decisions
Old 02-09-2013, 05:16 PM   #1
Moderator Emeritus
Rich_by_the_Bay's Avatar
 
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
Impact of expensive decisions

DW and I are moving to San Francisco to be near at least one set of grandchildren. My reading suggests that housing costs are as much as double the national average (hard figures to interpret but probably true and applicable in my case).

As if that weren't enough, the non-housing COL is about 15% higher than the national average. Tampa is about average where we live.

We are comfortably set for retirement at the usual costs or even a bit higher, but this Pacific t$unami has me a bit concerned.

Here are the commitments we made to make this work. What else would did you suggest?

  • A 1200 SF condo rental will replace our 3200 SF current home.
  • We have distributed our IRA to fill up our 15% bracket for the past 3 years to minimize tax burden. Fla has no state income tax.
  • We will become a one-car family, to which our new neighborhood is conducive. Huge savings in California I am told. Good rail gets you downtown in a jiffy.
  • Emphasize free or modest cost trips and entertainment till we get the lay of the land.
  • Work and austerity are not on the agenda other than at a hobby level (e.g. oversee a resident clinic a half-day here and there; telemedicine like I have discussed in the past).

What else?
__________________

__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.

As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
Rich_by_the_Bay is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 02-09-2013, 05:19 PM   #2
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,107
Quote:
Originally Posted by Rich_in_Tampa View Post
What else?
Do they sell lottery tickets in California?
__________________

__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 02-09-2013, 05:20 PM   #3
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,890
Be sure to save your soft drink cups? (see below) Just joking.

Seriously, though, it sounds like you have made enough lifestyle adjustments. So, my guess is that you should be fine.
Attached Images
File Type: jpg homeless460x276.jpg (35.7 KB, 16 views)
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is offline   Reply With Quote
Old 02-09-2013, 08:02 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
bbbamI's Avatar
 
Join Date: Dec 2006
Location: Dallas 'burb
Posts: 9,039
You seem to know and are prepared for the large expenses.

At least you will be renting and if you find CA is not a good fit, you will not be burdened with selling a house.

Just be sure to have your china cabinet nailed to the wall in case of an earthquake.

But seriously, relax and enjoy. Look at it as a new adventure.
__________________
There's no need to complicate, our time is short..
bbbamI is offline   Reply With Quote
Old 02-09-2013, 08:49 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Moemg's Avatar
 
Join Date: Jan 2007
Location: Sarasota,fl.
Posts: 10,035
I have often thought about moving near my grandchildren but where they live has stopped me in my tracks . If they lived in San Francisco I would be there .Napa , Sourdough bread , great food & wine , very scenic & liberal ! What's not to like !
__________________
Moemg is offline   Reply With Quote
Old 02-09-2013, 09:00 PM   #6
Recycles dryer sheets
 
Join Date: Jan 2010
Posts: 183
State income tax, sales tax are the big expenses in addition to housing, but then you know that already. I dont know if there is rent control in your new location, else budget for 10% annual rent increases, based on how the tech economy is doing. HSA contributions and HSA dividends are not state tax deductible. Utilities are a bit high, but I dont know how that compares to Tampa. We found non-housing costs to be at least 25% higher compared to Chicago suburbs for our basket of goods. Haircuts were really the only thing we found cheaper Be prepared for the cool weather, no warm evenings even in summer!
Have fun.
__________________
pixelville is offline   Reply With Quote
Old 02-09-2013, 09:27 PM   #7
Moderator Emeritus
 
Join Date: May 2007
Posts: 11,044
I faced a similar t$unami last year, when we moved from Alabama to San Francisco. Housing and the CA state income tax are the big ticket items. The rest is actually quite manageable. We spend a lot more on housing than we did in the south, but we have managed to cut the rest of our expenses by being frugal and making concessions. We traded the 2,500 sqft house for a 1,100 sqft apartment (plenty big for us). Although we kept both cars, we rarely use them anymore (weekend outings and road trips. We might sell one in the future). We walk and rely on public transportation a lot. We spend a lot less on entertainment, furnishings and clothing. Overall, ex-income tax but including housing, we manage to spend just a bit more than we did living in the south (our state income tax bill is quite high because DW is still working). Even though we spend less on fun stuff, our quality of life is still good I think. It's a simpler life for sure (less stuff), but still fulfilling thanks to the abundance of cheap things to do around here.
__________________
FIREd is offline   Reply With Quote
Old 02-09-2013, 09:38 PM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,471
Quote:
Originally Posted by Moemg View Post
I have often thought about moving near my grandchildren but where they live has stopped me in my tracks . If they lived in San Francisco I would be there .Napa , Sourdough bread , great food & wine , very scenic & liberal ! What's not to like !
+1! Sounds like a blast to me!

Best of luck to you! I suspect you'll be well prepared.
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is offline   Reply With Quote
Old 02-09-2013, 09:46 PM   #9
Thinks s/he gets paid by the post
 
Join Date: Feb 2011
Posts: 1,629
As has been said- stay light on your feet so you can move on if you find SF not to your liking (family or not).
__________________
ERhoosier is offline   Reply With Quote
Old 02-10-2013, 06:11 AM   #10
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,455
San Francisco is an excellent option and has all the potential to be a great adventure. The COL is higher, but how that impacts you probably has more to do with the daily lifestyle choices you make, such as eating out.

I would guess the bigger budget effect will come from being together with grandchildren. Some lifestyle choices their parents make could affect your budget in a way that might be difficult to manage.

For us, however, being close to the grandchildren (less than 60min drive) is much more enjoyable than living together during vacations.

If you still have time and tax room, you might appreciate a little ROTH conversion before becoming a Cal resident.
__________________
MichaelB is offline   Reply With Quote
Old 02-10-2013, 07:39 AM   #11
Thinks s/he gets paid by the post
 
Join Date: May 2006
Location: Largo
Posts: 1,945
Be sure to get paid for babysitting the GK's so you can turn around and spend it on them! People pay $10 per hour in the TB area so it must be $20 an hour in SF!

Did you eat out much in TB? You now have access to great ingredients in SF so maybe more cooking at home to save $$'s. Gourmet cooking lessons?
__________________
Buckeye is offline   Reply With Quote
Old 02-10-2013, 07:46 AM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 8,643
If I moved to SF I would want a condo about that size. The other frugal steps will let you feel out what the change really holds in store. You can share tastings at Napa/Sonoma wineries to make those cost efficient outings . I would love to live in that area but with the grand kids 5 blocks away I think I will stay put for now.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Old 02-10-2013, 08:07 AM   #13
gone traveling
 
Join Date: Jun 2012
Location: Austin
Posts: 245
Quote:
Originally Posted by MichaelB View Post
I would guess the bigger budget effect will come from being together with grandchildren. Some lifestyle choices their parents make could affect your budget in a way that might be difficult to manage.
+1

I'm betting that's going to be the biggest cost increase you see. The opportunities to spend money on grandchildren are directly proportionate to your proximity to them.
__________________
LakeTravis is offline   Reply With Quote
Old 02-10-2013, 10:00 AM   #14
Moderator Emeritus
Rich_by_the_Bay's Avatar
 
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
Quote:
Originally Posted by MichaelB View Post
San Francisco is an excellent option and has all the potential to be a great adventure. The COL is higher, but how that impacts you probably has more to do with the daily lifestyle choices you make, such as eating out.

I would guess the bigger budget effect will come from being together with grandchildren. Some lifestyle choices their parents make could affect your budget in a way that might be difficult to manage.

For us, however, being close to the grandchildren (less than 60min drive) is much more enjoyable than living together during vacations.

If you still have time and tax room, you might appreciate a little ROTH conversion before becoming a Cal resident.
Thanks for the tips. It might be a challenge to keep up the parents' pace but fun trying.

We distributed most of our disposable tax-deferred "allowance" by filling up the 15% bracket. I can tell that state taxes are a big deal out there andn I'll keep a Roth in mind for next year.

Rich
__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.

As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
Rich_by_the_Bay is offline   Reply With Quote
Old 02-10-2013, 10:03 AM   #15
Moderator Emeritus
Rich_by_the_Bay's Avatar
 
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
Quote:
Originally Posted by Buckeye View Post
Be sure to get paid for babysitting the GK's so you can turn around and spend it on them! People pay $10 per hour in the TB area so it must be $20 an hour in SF!

Did you eat out much in TB? You now have access to great ingredients in SF so maybe more cooking at home to save $$'s. Gourmet cooking lessons?
The food thing, definitely. Wife is a bonafide foody, me mostly I eat what she cooks but I'm ready for some lessons.
__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.

As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
Rich_by_the_Bay is offline   Reply With Quote
Old 02-10-2013, 11:09 AM   #16
Thinks s/he gets paid by the post
 
Join Date: Jun 2005
Posts: 1,152
Rich, I am curious, how many times have you been to San Francisco for more than a few days in the last few years?

I hope you don't mind me asking. This seems like such a huge change in multiple dimensions.
__________________
kramer is offline   Reply With Quote
Old 02-10-2013, 11:40 AM   #17
Moderator Emeritus
Rich_by_the_Bay's Avatar
 
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
Quote:
Originally Posted by kramer View Post
Rich, I am curious, how many times have you been to San Francisco for more than a few days in the last few years?

I hope you don't mind me asking. This seems like such a huge change in multiple dimensions.
It is big and multidimensional event, to be sure. We probably averaged 4 visits a year plus shorter ones now and again. It helps that we have been frequent movers related to career opportunities so the process is not unfamiliar (Rochester to Wisconsin to Arizona to Florida).

Your point is well taken -- the Disney effect won't last forever. OTOH, being 3000 miles away was not ideal for us as the older GKs turn 11.

Rich
__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.

As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
Rich_by_the_Bay is offline   Reply With Quote
Old 02-10-2013, 12:17 PM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,974
Quote:
Originally Posted by RIT
We will become a one-car family, to which our new neighborhood is conducive. Huge savings in California I am told. Good rail gets you downtown in a jiffy.
One of our goals too, and (Manhattan aside maybe) if there's anyplace better than San Francisco where it's possible, I don't know where it would be. The transit system out there is great.
Quote:
Originally Posted by RIT
Emphasize free or modest cost trips and entertainment till we get the lay of the land.
That should be very easy from San Francisco. There's so much to see & do in SF and I'm not sure I'd ever get tired of Napa/Sonoma, Monterey-Carmel, Muir Woods, Big Sur, Yosemite, Chez Panisse, Scharffen Berger Chocolate, sailing on the bay, the Pacific...we could go on and on. You could keep happily busy with day trips forever out there if you wanted.
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 02-10-2013, 02:36 PM   #19
Moderator
MBAustin's Avatar
 
Join Date: Jul 2010
Posts: 4,155
Look for ways to economize on day-to-day expenses in addition to food. Examples:
- Don't get a landline - use something like OOMA or just your cell phone
- Look at internet TV alternatives to expensive cable TV
- Shop at Goodwill for basic clothes such as jeans, khakis, shirts, etc.
I'm sure you'll think of more.

Also remember that LBYM is a great philosophy to teach your grandkids by your example (regardless of whether their parents are of the same discipline). Enjoy!
__________________
"One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute." William Feather
----------------------------------
ER'd Oct. 2010 at 53. Life is good.
MBAustin is offline   Reply With Quote
Old 02-10-2013, 03:00 PM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
clifp's Avatar
 
Join Date: Oct 2006
Posts: 7,450
Quote:
Originally Posted by MichaelB View Post
San Francisco is an excellent option and has all the potential to be a great adventure. The COL is higher, but how that impacts you probably has more to do with the daily lifestyle choices you make, such as eating out. . ..

If you still have time and tax room, you might appreciate a little ROTH conversion before becoming a Cal resident.
There are some cheap place to eat in SF, like chinatown, but not a lot.

Since you are renting in SF and presumably still have a residency in FL, for 2013 it might make sense to check out the residency requirement for CA. I think if you spend enough time out of state, say visiting the kids in MO, you maybe able to remain a resident of FL for 2013.

It is PITA to do file multiple state income tax forms, and IMO California is extraordinarily aggressive about want to tax income you have earned in other states.
__________________

__________________
clifp is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 04:43 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.