LCOL, MCOL & HCOL Advantages, Disadvantages & Healthcare

[ShokWaveRider]

We hear a lot of folk saying they are moving or have moved to a LCOL area to help with retirement living (Assume General Expenses are lower overall).

Others like their HCOL areas other are happy with the in-between MCOL.

I am curious how folk find each of their choices and how it has worked out for them. Those who have experience more than one would be interesting to hear from. I will start. We live in what we think is a MCOL area in NE Fla. We have previously lived in Canada, Colorado and California, all within very easy access to a big city.

Decent home prices in nice areas are around $400k - $500k, upper middle class homes start at about $550k.

Food costs are average we spend about $400pm for 2.

Home RE taxes are ~1.7% of appraised value.

Our town has about 15,000 people, we are 40 minutes from a big city which has everything.

We have most of the big box store with the exception of Costco and Trader Joes within a 3-5 mile radius. Costco is 45 a minutes drive.

Insurance costs are higher as we are by the coast.

Car, boat and other taxes are very low and not worth mentioning. Sales Tax is 6.5%. There is No State Income Tax.

Electricity and Gas are very reasonable, our monthly bills are always under $175, Water is about $45 a month. HOA is $250 pm and includes Landscaping, Gardening and Gated Entries.

Fire, Police and other necessary services are all within 3 miles.

Healthcare is abundant and no shortages or docs or Specialists, ACA health insurance is very affordable (at least it was up to 2019). There are basically no real wait times to see any provider and there is a great hospital within 3 miles. There is a Mayo Clinic 45 minutes away.

All the above seem very reasonable to us. Our key concern is access to quality affordable healthcare, and we are more than happy with the current arrangement.

We are curious how these compare with LCOL and HCOL areas.

 

[COcheesehead]

I consider our area LCOL.
Average house price is $250k. Very nice houses $400k-$500k
Property taxes are .4%
Utilities are $40, but we have solar panels.
Trash/water/sewer are a bit high at about $60/month.

 

[ivinsfan]

SWR good info for people but you have to get over the cost of Medicare, your family got vitually free HC funded by taxes before 2019. Why don't you plug in your actual HC number projection for 2019 instead of bemoaning the loss of your free ACA.

I think you'd realize you are still getting a heck of a deal...affordable doesn't mean free...

 

[ShokWaveRider]

SWR good info for people but you have to get over the cost of Medicare, your family got vitually free HC funded by taxes before 2019. Why don't you plug in your actual HC number projection for 2019 instead of bemoaning the loss of your free ACA.

I think you'd realize you are still getting a heck of a deal...affordable doesn't mean free...

Not moaning about anything, where did you get that from in this post? Very happy with Medicare so far (I year in, taken by everyone, so far, here). DW has another 5 years of ACA though. Again we are happy with that so far. Also this is a FIRE'd forum. A lot of folks have ACA. Medicare is basically the same cost for all. Not sure what your point is with respect to this post?

Also, it would be nice for folk to share their access to services in their areas as opposed to just the general costs.

 

[ivinsfan]

Not moaning about anything, where did you get that from in this post? Very happy with Medicare so far (I year in, taken by everyone, so far, here). DW has another 5 years of ACA though. Again we are happy with that so far. Also this is a FIRE'd forum. A lot of folks have ACA. Medicare is basically the same cost for all. Not sure what your point is with respect to this post?

Also, it would be nice for folk to share their access to services in their areas as opposed to just the general costs.

you said ACA insurance was very affordable "at least until 2019"... what did you mean by that, I took it to mean you weren't happy with 2019 costs. I think if you listed your annual HC costs it would be in the so called "affordable" range.

 

[ShokWaveRider]

you said ACA insurance was very affordable "at least until 2019"... what did you mean by that, I took it to mean you weren't happy with 2019 costs. I think if you listed your annual HC costs it would be in the so called "affordable" range.

Well you got it incorrect didn't you? It was affordable "up to" 2019, we do not know, it could go wild in 2020 for all we know. Not applicable for me. But for DW and those who use it, it is. Still not relevant to this post.

 

[Teacher Terry]

I have lived in upstate New York, Texas, Kansas,Wisconsin and Nevada. I definitely prefer Nevada. Kansas and Wisconsin would definitely be cheaper to live in but we love it here. MCOL, mild 4 seasons, average home is 420k, property taxes based on age of home partly so for a 1950’s 350k house we only pay 700/ year. Tons of stuff to do year round and all stores, etc close by. HC is our biggest expense averaging between 10-13k/year. Good access to doctors but it took me 6 months to get into see the neurologist I wanted. My doctor said even she couldn’t speed it up. If you go to the ER and they refer you it would happen sooner. We spend 400/ month for food.

 

[ivinsfan]

HC is relevant and so far that's the great thing about Medicare if you buy a regular supplement, it costs money but give you great coverage.. It's definitely true that when some people go from ACA to Medicare they see a pretty big uptick in price. I doubt ACA will go wild within 6 months but the networks could certainly change.

 

[ivinsfan]

I have lived in upstate New York, Texas, Kansas,Wisconsin and Nevada. I definitely prefer Nevada. Kansas and Wisconsin would definitely be cheaper to live in but we love it here. MCOL, mild 4 seasons, average home is 420k, property taxes based on age of home partly so for a 1950’s 350k house we only pay 700/ year. Tons of stuff to do year round and all stores, etc close by. HC is our biggest expense averaging between 10-13k/year. Good access to doctors but it took me 6 months to get into see the neurologist I wanted. My doctor said even she couldn’t speed it up. If you go to the ER and they refer you it would happen sooner. We spend 400/ month for food.

In your case TT when you both hit Medicare those HC numbers should drop. When comparing COL is definitely makes a difference if you get low cost ACA or Medicare.

 

[W2R]

We hear a lot of folk saying they are moving or have moved to a LCOL area to help with retirement living (Assume General Expenses are lower overall).

Others like their HCOL areas other are happy with the in-between MCOL.

I am curious how folk find each of their choices and how it has worked out for them. Those who have experience more than one would be interesting to hear from. I will start. We live in what we think is a MCOL area in NE Fla. We have previously lived in Canada, Colorado and California, all within very easy access to a big city.

Decent home prices in nice areas are around $400k - $500k, upper middle class homes start at about $550k.

Food costs are average we spend about $400pm for 2.

Home RE taxes are ~1.7% of appraised value.

Our town has about 15,000 people, we are 40 minutes from a big city which has everything.

We have most of the big box store with the exception of Costco and Trader Joes within a 3-5 mile radius. Costco is 45 a minutes drive.

Insurance costs are higher as we are by the coast.

Car, boat and other taxes are very low and not worth mentioning. Sales Tax is 6.5%. There is No State Income Tax.

Electricity and Gas are very reasonable, our monthly bills are always under $175, Water is about $45 a month. HOA is $250 pm and includes Landscaping, Gardening and Gated Entries.

Fire, Police and other necessary services are all within 3 miles.

Healthcare is abundant and no shortages or docs or Specialists, ACA health insurance is very affordable (at least it was up to 2019). There are basically no real wait times to see any provider and there is a great hospital within 3 miles. There is a Mayo Clinic 45 minutes away.

All the above seem very reasonable to us. Our key concern is access to quality affordable healthcare, and we are more than happy with the current arrangement.

We are curious how these compare with LCOL and HCOL areas.

Our suburb of New Orleans used to be LCOL but with the recent housing boom it has transitioned to MCOL or even the high side of MCOL.

Thank goodness I bought my Dream Home four years ago, just before the housing prices skyrocketed here. Median home prices are now very high compared with what my house was back then. The lowest price home in our neighborhood is a complete teardown on a tiny 5000 sf lot (the wreck that is on the lot now is legally uninhabitable so the buyer must pay to have it demolished and removed before building, so this is worse than a vacant lot). It is listed at 133% of what my home was listed for back in 2015.

Our property taxes, utilities, and some other expenses are more reasonable but overshadowed by the real estate costs here. Since my house is already bought and paid off, the higher real estate costs don't affect me. Insurance costs for house and car are also exorbitant. Health insurance is not, since I have Medicare and federal retiree BCBS; so my highest expense category in 2018 was income tax. We live in an urban inner suburb, so everything imaginable is within a mile of our homes. Well, except the best hospital in this entire part of Louisiana, which is two miles away, as are the doctors and labs of that medical corridor.

Last year I indulged myself in anything and everything I wanted to buy or experience, and spent $35,538 for everything including fairly exorbitant income tax (IMO). That's just for one person, with no dependents, travel, mortgage or loans, though, so it's not all THAT frugal. However I can easily afford that much, so I feel like I am "sitting pretty" here in our New Orleans suburb.

We seriously considered moving to Springfield, Missouri back in 2009-2010, due to the LCOL there. However we are probably happier here, despite the higher COL.

There is a limit to how much we would pay for location, and I think this is right at that limit. I would never in a million years pay what it costs to live in the most expensive coastal regions like SF or Manhattan, no matter how nice they are, because the costs vs benefits compared with our present location would be less favorable for us. YMMV and does, for many.

Two factors could conceivably motivate us to move away. Hurricanes ("Katrina II"), or an overwhelming increase in crime. Either is possible and we already have about all we can take of both, so we keep that in mind. If, heaven forbid, we need to move away from here, I swear this time I will take no more with me than would fit in my Venza. I'd have the rest sold for me by someone who manages estate sales. I have had it with big, stressful, exhausting, physically demanding moves and just will not do that again.

 

[Teacher Terry]

I am on Medicare but have to keep my expensive state insurance because my husband is 5 years younger. From what friends are saying if we don’t go the MA route we will be paying about 500/person by the time we pay for supplements. I would have to make sure we could go out of network for it or I wouldn’t do it.

 

[ivinsfan]

I am on Medicare but have to keep my expensive state insurance because my husband is 5 years younger. From what friends are saying if we don’t go the MA route we will be paying about 500/person by the time we pay for supplements. I would have to make sure we could go out of network for it or I wouldn’t do it.

That's a bummer....we are on Medicare and pay around 380 PP which includes everything from the first dollar except for meds, which I realize can be very expensive...

 

[Teacher Terry]

I am on 5 medications that and DH has diabetes. Lots can change in 5 years so will see what happens.

 

[aja8888]

The woodlands, TX about 25 miles from downtown Houston:

Decent home prices in nice areas are around $400k - $500k, upper middle class homes start at about $550k.

Houses here start at ~$200K and up to $millions. Ave "normal" house sells for $120/ sq foot.

Food costs are average we spend about $400pm for 2. Same for us.

Home RE taxes are ~1.7% of appraised value. Here it's 2.% AV

Our town has about 15,000 people, we are 40 minutes from a big city which has everything. 120,000 in The Woodlands, Houston is 20 minutes away.

We have most of the big box store with the exception of Costco and Trader Joes within a 3-5 mile radius. Costco is 45 a minutes drive. We have all stores plus Costco and Sams, 3 Walmarts, Etc.

Insurance costs are higher as we are by the coast. Can't comment

Car, boat and other taxes are very low and not worth mentioning. Sales Tax is 6.5%. There is No State Income Tax. Same with sales tax of 6.25% to 8.25%

Electricity and Gas are very reasonable, our monthly bills are always under $175, Water is about $45 a month. HOA is $250 pm and includes Landscaping, Gardening and Gated Entries. About the same for utilities with $195/mo HOA fees.

Fire, Police and other necessary services are all within 3 miles. Same

Healthcare is abundant and no shortages or docs or Specialists, ACA health insurance is very affordable (at least it was up to 2019). There are basically no real wait times to see any provider and there is a great hospital within 3 miles. There is a Mayo Clinic 45 minutes away. Three major hospitals within 1 mile and the MD Anderson clinic 1/2 mile away.

 

[Dtail]

SWR - we live in the "New Tampa" area, which is considered MCOL. I understood your ACA post. As you know already, ACA costs can be low with a low MAGI in our area with great hospital and doctor access.
Property taxes about 2% of assessed value.
Our utilities do range into the $200's pm in the summertime and our water bill is always over $100 pm.
One area we seem to spend more than most on this site is the cost of food. Our average is $1,250 monthly which includes dining out and liquor. This is our choice, as we like to dine out ~3x a week.
HOA is $133 monthly for gated access, but does not include lawn service.
Housing in our complex is ~200k-500k.

 

[swakyaby]

LCOL, MCOL & HCOL Advantages, Disadvantages & Healthcare

I live in central California in an area I consider between MCOL for housing and HCOL due to state taxes. Average home price is $450K and property taxes are 1.2% plus Mello Roos. A master-planned community with many parks in the residential communities. Water/gas bills average $200/month, water/trash/sewer about $100/m, HOA $75/m. Spend about $800-$1000/month on food for 2 (we like food!). Shopping is a big plus—An upscale Galleria, Costco, Trader Joe, automall, a dozen grocery and specialty food stores within 7 miles, and just about any kind of retail store you would want. There are 3 major hospitals within 7 miles and health care facilities in abundance. But along with the good comes the high price. State sales tax is 7.75%, and there’s no break on state income tax on long-term capital gains. Healthcare premiums without subsidy was about $2,100/month for 2 in 2018, and currently am paying $545/month for 2 with the ACA.

 

[ShokWaveRider]

We do know that HC costs vary widely from area to Area. In my OP I was thinking about Access to HC and General Services in LCOL States vs the others. We hear so much about HC accessibility in certain areas, I was wondering if it was worse in less affluent states/counties than affluent ones, as LCOL areas seem to be in less affluent states/counties and HCOL seem to be in more affluent states/counties. Sorry I did not make that clearer.

 

[Walt34]

We live in what I suppose would be called a LCOL area, the eastern panhandle of West Virginia. Martinsburg is the nearest "large" city. We moved from a HCOL area near Washington, D.C. so houses, and pretty much everything, seemed like a real bargain. Average house price for this area is ~$200k, ours is maybe $240k, so not out of line. Put this house where we were near D.C. and it would be many many millions. Location is everything in real estate. Health care is readily available and two other large health care centers, Winchester, VA and Hagerstown, MD are about 30 minutes away. Being in my early fifties at the time we bought we gave this heavy consideration. Another primary consideration was easy proximity to DW's father and brother, who at the time had a young daughter, since grown.

I am on Medicare but DW still has a few years to go. I keep the same health insurance plan for both of us I had when working for 30% of the premium, now secondary to Medicare for me. The coverage is excellent, I rarely see a bill, and I'd be a fool to drop it.

Grocery stores are ~10-15 minutes away, normal shopping/restaurants about the same. It is not a walkable community, you need a car to live here. Utilities in WV are regulated and the costs are not out of line although I haven't bothered to compare with other areas, a pointless exercise I think since they are what they are and we have no plans to move soon.

Sales taxes are 6%, and property taxes are laughably low compared to what I see others paying, about $1,200 year, although I get a small break being over 65.

 

[Scuba]

We live in a HCOL area - So CA beachfront condo. Access to anything and everything locally, but high taxes - income, property and sales tax. Property values are high - average home in a good area is over $1M, much higher if on the water. Property taxes are lower in terms of rate than many places, but because values are so high, the absolute cost is huge - almost $15K for us. Sales tax ranges from 9.5%-10.25% depending on area. Healthcare expenses are high but access is excellent with a PPO pre-ACA plan.

Bottom line - demand exceeds supply here so the COL keeps going up.

 

[footenote]

We live in a small (pop 8,000), LCOL zipcode (median house: 187k) in a resort area.

I didn't fully appreciate it when we moved here five years ago, but we have many bigger city amenities (healthcare, shopping) because the area's population grows 6x during the summer.

The big boxes serving the area (Target, Best Buy, Costco, Walmart) all landed in our community and we have a 0.4% city sales tax. Yes, locals pay it too, but the summertime revenue pays residents back more than it costs us. (The taxes funded a new water treatment plant its first year.) Tourists subsidize a much higher-COL experience (nicer roads, big boxes, good health facilities) for year-round residents.

If you can live with not shopping on Fridays three months of the year, it's a good deal.

 

[Bamaman]

We live in an ultra LCOL area, with existing home prices extremely low--$150K or less. New homes are normally priced for LCOL places--around $250K. Alabama property taxes are ridiculously low with $200K home taxes @ $650 per year, and those that are disabled have no property taxes. Defined pensions and social security--so we retirees essentially pay no state income taxes.

We moved here for the LCOL and high quality of life. Our city home is 5,200 square feet with two double car garages, and it was under $300K. Neighbors' homes go 7000-10,000 square feet. We also have a waterfront lake house across town that was inherited, and two Robert Trent Jones golf courses are down the street.

We executed a long term plan to get here, and that included living in LCOL cities rather than climbing the corporate ladder with a company in places like Chicago and Detroit. Controlling living expenses allowed us to live in previous homes of 4400 sq. ft., 4200 sq. ft. and 3300 sq. ft.--never having a payment over $800 per month.

We prefer living in a medium size city that are relatively close to large cities. We have a great new hospital, however we're 2 hrs. or less from four great medical communities. We have just about all we need--great restaurants too--in our community, and seldom have to travel elsewhere.

 

[candrew]

Our home base is in the NW Phoenix area. I would say ours is a mix between LCOL - property taxes & insurance, but in other ways MCOL - sales taxes at about 8% and auto insurance can be pricey. Our burb in particular has excellent public safety.

Home prices average $275K.

Grocery prices would probably be considered LCOL compared to many other areas as there are several large grocery chains competing for business.

Our ACA plans have plenty of local providers in-network.

Water, sewer, garbage averages $65/month. We have low water use landscape and no pool.

Not sure about average electricity rates here as we have grid-tied rooftop PV solar on our home.

 

[ncbill]

We live a LCOL lifestyle in a MCOL city (city cost of living index ~120)

Sales tax ~7%, state income tax ~5%, property tax ~1.2%

Health insurance through DW's employer, but should that go away our LCOL spend would make it possible to 'manage' mAGI for significant subsidies under the ACA (10+ years from Medicare)

Home prices are ridiculous here, IMHO, though we have no plans to move...we can inexpensively modify the master bath in our two-level home to permit one-level living as several older neighbors have already done.

 

[Rianne]

Great thread. There are so many varying neighborhoods in our town. Our house value ~ $250K, property taxes 2.5% (awful in Illinois). 3 blocks away are $300-$400K newer homes. We remodeled our 55 yr. old house to suit our needs/likes. MCOL area but many amenities being a Big Ten university town. Sales tax is 9%. Awful. But so many free things to do. Always fun activities with the university and a large Community College.

I'm not sure we'd ever move again. Moved 6 times during careers, chasing rainbows ). Allowed for FIRE and worth it. We can travel if we so desire.

 

[Midpack]

We’re moving from a LCOL area to a MCOL area, though the only big difference is home prices. Living in a LCOL area in a cheap house for the past 26 years undoubtedly helped us retire early. Though I’d like to stay in a LCOL area and save $, we feel like we paid our dues and our WR in the MCOL area should still be very reasonable (not a big stretch). <—- To me that’s the key answer.

So we trade a dumpy town and horrible winters for a milder four season climate, a mile from a big lake, 2 hours to the mountains and 2-1/2 hours to the ocean and close to a major metro area with all the arts-culture-restaurants-shopping we need (even if it doesn’t match Chicago). We think/hope it’ll be worth it - finders crossed.