45 yrs old | Married | 2 Kids | Is it Time To Quit?

[HawaiiShrimp]

Quote:

Originally Posted by stepford As someone looking at a (smaller) forever home in WA I have to say that $2M doesn't seem all that ridiculous in the higher COL parts of the state. Just to get a nice (~2000 sqft) place with a yard and a view in an area we like looks like it may take most of our $1M budget. If we had the ~$10M resources of the OP and the needs of a family of 4 I would not think $2M that unreasonable (however nuts it must seem in other parts of the country).

Agree, stepford. As much as I want things to be more affordable, it's not always the case. $2.0M is a lot of money but, at the same time, I am looking for 3000 sqfts+ with 4-5 rooms (family visits), decent size lot, and in a nice/good school neighborhood. I have friends in Vancouver, so being able to drive across the Canadian border on the Westside is important to me.

[OldShooter]

Quote:

Originally Posted by stepford ... forever home in WA ...

Maybe not so "forever."

"Earthquakes occur nearly every day in Washington. Most are too small to be felt or cause damage. Large earthquakes are less common but can cause significant damage to the things we count on in everyday life, such as buildings, roads, bridges, dams, and utilities.

"Washington has the second highest risk in the U.S. of these large and damaging earthquakes because of its geologic setting."

-- https://www.dnr.wa.gov/programs-and-...kes-and-faults

[bloom2708]

Go to 50-50 stocks/bonds/cash and retire soon.

Unless your spending (not mentioned) is $350k+

Great work.

[aaronc879]

Quote:

Originally Posted by HawaiiShrimp My wife and I want to visit different countries 3-6 months in a year. Just rough number so far, we haven't really seriously discussed about it.

How does that work with two young kids at home especially if you move away from friends and family?

[aaronc879]

Not paying state income taxes is not a very good reason to relocate IMO. If your kids are in good schools that they like and your friends and family are near by then I don't see a good reason to move. You can easily afford the state income taxes, they shouldn't even be that high after you retire.

[rodi]

Welcome, Shrimp, from another So Cal type. (San Diego in my case).

Financially, you look ok. I'd be nervous not having *any* fixed income allocation to temper the marker swings, and my asset allocation reflects that.

Some questions:
- Will you keep the rental when you retire? Do you use a management company? Is it local to you now, (which means you'd have to add the expense of a management company if you move.)
- What part of Washington are you interested in? I lived in Bellingham for 3 years and LOVE that area. My BFF lives there and it's a gorgeous place to live. I have friends in Seattle, Bellvue, Snohomish, and Vancouver (WA). They've all found their dream homes... but the prices vary a lot depending on the location.
- Is your spouse on board with these ideas?

Other thoughts:
- You will enjoy being a stay at home parent as your kids grow up. I retired when my boys were 11 and 13 and it was the best thing ever. Being actively involved in your kids business is a good way to keep them on the right track. Sure it's frustrating at times, but I have no regrets that I was home as they went through middle and high school.
- You'll need to look at school districts with your new location.

If you haven't yet - run firecalc (link at bottom of page). Explore the tabs. Input of spending on first page is *all inclusive* (include taxes, health insurance, etc.). Make sure you adjust your asset allocation to 100% stock so it can look at market swings for the historical analysis.

Again, welcome to the forum from another SoCal type who loves Washington state.

[HawaiiShrimp]

Quote:

Originally Posted by aaronc879 How does that work with two young kids at home especially if you move away from friends and family?

I think that's one of the challenges. Moving away from CA means moving away from grandparents. We are trying to motivate some other family members to move with us. They are eager to pull the plug and started looking for out of state jobs already.

With the way CA is going though, it's just a matter of when to move. Kids are not too attached to their friends, so the transition will not be TOO difficult. Finger-crossed.

[HawaiiShrimp]

Quote:

Originally Posted by aaronc879 Not paying state income taxes is not a very good reason to relocate IMO. If your kids are in good schools that they like and your friends and family are near by then I don't see a good reason to move. You can easily afford the state income taxes, they shouldn't even be that high after you retire.

Totally agree. One of the major reasons I want to leave South Cal is the HEAT. I like rainy, pacific northwest, cold climate. I will dry-out living here in CA's desert-like climate. I hate the heat.

Kids are in good schools right now. This "move" is a 5-year plan. It does not have to be executed right the way. We can wait until the kids finish up elementary schools before moving. But, eventually, we like to live in a different climate altogether.

When it comes to state income taxes, the problem is: If I want to take out $1.2M cash to pay off a house, I'll be subject to 14% more CA state tax than a different state with no state tax. Also, I do anticipate lifestyle creep, if I ever need to take out $300k annually for traveling and other lifestyle expenses, I will get taxes an arm and a leg. I don't prefer to get punished financially here in CA for the sun tax especially when I don't prefer the sun to begin with. I prefer a cold climate. That's just my logic at the moment. Subject to change over time. I am speaking my mind as I type. Hope it makes sense. Thanks!

[aaronc879]

Quote:

Originally Posted by HawaiiShrimp I think that's one of the challenges. Moving away from CA means moving away from grandparents. We are trying to motivate some other family members to move with us. They are eager to pull the plug and started looking for out of state jobs already. With the way CA is going though, it's just a matter of when to move. Kids are not too attached to their friends, so the transition will not be TOO difficult. Finger-crossed.

With the massive wealth that you have you could afford to bring the Grandparents with you(at least one set) and build them a small place on your property. That way you have automatic babysitting if you want to spend a couple months at a time travelling the world as you stated.

[HawaiiShrimp]

Quote:

Originally Posted by aaronc879 With the massive wealth that you have you could afford to bring the Grandparents with you(at least on set) and build them a small place on your property. That way you have automatic babysitting if you want to spend a couple months at a time travelling the world as you stated.

That is a great suggestion. I didn't consider that before. It makes perfect sense. Thank you.

[pb4uski]

We have some friends who just moved into a new casita/small house that was built on their daughter's property. About 1,000 sf... two bedrooms, one bath, small kitchen with countertop dining and a small living room.

They plan to winter there in Texas and summer in New England. Kids are older... 6th grade and HS junior but they do want to be near to grandchildren.

[OldShooter]

Quote:

Originally Posted by aaronc879 ... you have automatic babysitting if you want to spend a couple months at a time travelling the world as you stated.

Err ... speaking as a grandparent this idea of being tied down for months would be a nonstarter for us. Being tied down for a couple of afternoons a month, yes. Beyond that, we negotiate. I think our weekly rate for babysitting would be in the $5,000 range, which would allow us to profitably subcontract the work.

[aaronc879]

Quote:

Originally Posted by HawaiiShrimp Totally agree. One of the major reasons I want to leave South Cal is the HEAT. I like rainy, pacific northwest, cold climate. I will dry-out living here in CA's desert-like climate. I hate the heat. Kids are in good schools right now. This "move" is a 5-year plan. It does not have to be executed right the way. We can wait until the kids finish up elementary schools before moving. But, eventually, we like to live in a different climate altogether. When it comes to state income taxes, the problem is: If I want to take out $1.2M cash to pay off a house, I'll be subject to 14% more CA state tax than a different state with no state tax. Also, I do anticipate lifestyle creep, if I ever need to take out $300k annually for traveling and other lifestyle expenses, I will get taxes an arm and a leg. I don't prefer to get punished financially here in CA for the sun tax especially when I don't prefer the sun to begin with. I prefer a cold climate. That's just my logic at the moment. Subject to change over time. I am speaking my mind as I type. Hope it makes sense. Thanks!

Not sure where that $1.2M came from? If you do eventually move to Washington State I would suggest selling the CA house and renting in WA until you establish permanent residency. Then sell the equities needed to buy your dream house with no state tax on the capital gains. You could even get a mortgage so you can stay in a lower Federal tax bracket if your capital gains are really high. With assets like yours you have a lot of options

[aaronc879]

Quote:

Originally Posted by OldShooter Err ... speaking as a grandparent this idea of being tied down for months would be a nonstarter for us. Being tied down for a couple of afternoons a month, yes. Beyond that, we negotiate. I think our weekly rate for babysitting would be in the $5,000 range, which would allow us to profitably subcontract the work.

True. That would be too much like raising another couple kids rather than jujst spoiling the Grandkids a couple times a month. Just a thought. It could work for them, but may not

[HawaiiShrimp]

Quote:

Originally Posted by rodi Welcome, Shrimp, from another So Cal type. (San Diego in my case). Financially, you look ok. I'd be nervous not having *any* fixed income allocation to temper the marker swings, and my asset allocation reflects that. Some questions: - Will you keep the rental when you retire? Do you use a management company? Is it local to you now, (which means you'd have to add the expense of a management company if you move.) - What part of Washington are you interested in? I lived in Bellingham for 3 years and LOVE that area. My BFF lives there and it's a gorgeous place to live. I have friends in Seattle, Bellvue, Snohomish, and Vancouver (WA). They've all found their dream homes... but the prices vary a lot depending on the location. - Is your spouse on board with these ideas? Other thoughts: - You will enjoy being a stay at home parent as your kids grow up. I retired when my boys were 11 and 13 and it was the best thing ever. Being actively involved in your kids business is a good way to keep them on the right track. Sure it's frustrating at times, but I have no regrets that I was home as they went through middle and high school. - You'll need to look at school districts with your new location. If you haven't yet - run firecalc (link at bottom of page). Explore the tabs. Input of spending on first page is *all inclusive* (include taxes, health insurance, etc.). Make sure you adjust your asset allocation to 100% stock so it can look at market swings for the historical analysis. Again, welcome to the forum from another SoCal type who loves Washington state.

1. Yes, I am keeping the rental. No mgmt agency needed. I have reliable tenants (relatives) live there. They are close to us and trouble-free for the last 12 years.
2. I'm considering Bellingham, Blaine. Mainly Bellingham. Is Homelessness an increasing problem there?
3. Yes, my wife is on board with this. Shes likes the idea. Trust me, she's not easily convinced but she's convinced.

I'm working from home at the moment and will continue to do so in the next 6 months to a year. It's great to spend time with family. Since the kids have a school schedule, even if I call it a quit now, we can't really go travelling full time. They have school to return to. That's another reason I'm still staying put.

I love to hear the pros and cons of living in Bellingham. For example:
1. Is it easy to get used to the weather since you are from SD?
2. Is it easy to get used to the new neighborhood?
3. Are people in general nice there?
4. What kind of hobbies do you have? Any outdoor activities you recommend?
5. Do you drive up to Vancouver? If so, how long it usually takes for you?
6. How's the home buying experience up there? Which real estate agent you recommend?
7. Any tips and tricks in terms of home buying?
8. Any tips and tricks in terms of relocation? Things you'd do differently?
9. Any cultural shock? How long it takes to adapt to the new state/city?
10. Are the cost of goods and services more expensive? Less expensive?
11. How frequent you travel? Is it a pain to travel out from nearby airport?

Sorry in advance for so many questions. I am just trying to learn. Thanks!!

[HawaiiShrimp]

Quote:

Originally Posted by OldShooter Err ... speaking as a grandparent this idea of being tied down for months would be a nonstarter for us. Being tied down for a couple of afternoons a month, yes. Beyond that, we negotiate. I think our weekly rate for babysitting would be in the $5,000 range, which would allow us to profitably subcontract the work.

Ha ha.. I love the honesty. Never assume the grandparents can endure the kids for months.

[HawaiiShrimp]

Quote:

Originally Posted by aaronc879 Not sure where that $1.2M came from? If you do eventually move to Washington State I would suggest selling the CA house and renting in WA until you establish permanent residency. Then sell the equities needed to buy your dream house with no state tax on the capital gains. You could even get a mortgage so you can stay in a lower Federal tax bracket if your capital gains are really high. With assets like yours you have a lot of options

Thank you, aaronc879. That's a great suggestion. I intend to sell the house here in CA because I simply don't want to maintain an out-of-state house. The condo is fine since it has relatives to maintain it, but not the CA house.

Renting in WA until establishing permanent residency. I agree. The downside is: We will have to move twice (or store all things in storage). Not a big deal, but it certainly is a sensible thing to do. Do you hire any local WA CPA to handle tax/accounting? This is something I don't have at the moment but will start looking into (after the move), preferably local firm.

[someguy]

Congrats on your situation!

A quick question. Your HHI is $230K and your annual expenses are $60K (very low for SoCal) for a rough net of $100K/yr. Even assuming you had that salary (and net) available for all 20 years, that's still a 14% annual compounding rate of return! I'm guessing it wasn't always $100K/yr so the question is what did your investment strategy/numbers look like over time?

In terms of moving, it's hard for me to fathom leaving SoCal for the PNW (and doubling housing to boot), but different strokes! That said, I recommend all four of you spending ~2 months for a summer or two up in WA and see how you like it. See how likely you are to make new friends, and see what it's like being away from family.

How do you (or your wife) feel about being a full-time teacher and/or stay at home parent? If you want to travel 3-6 mos/yr, I'm assuming you'd take the kids and home school them? I know Rodi mentioned she loved being at SAHM, but I don't think all folks would feel the same.

[someguy]

One other thing: the CA FTB is notorious in going after former or potential CA residents. All the more so if you are high net worth and moved to avoid high CA state taxes. I believe if you maintain that CA rental after moving to WA, you will still be required to file a CA tax return which will give them visibility into your total financial picture. I would definitely consult a CPA attorney at some point.

[HI Bill]

Quote:

Originally Posted by aaronc879 Not paying state income taxes is not a very good reason to relocate IMO.

+1. At your asset level and potential income, you can afford to live in the highest COL areas, including Hawaii, the Caymans, etc. You can afford to live in the geographic area that you most prefer. If that's Honolulu, San Francisco, or an island in the Bahamas. Paying taxes is part of the price of success, so why not move to the place where you'd really love to be?

I deferred ER by at least 5 years to be able to continue to live in Hawaii, and factored in the state taxes and higher COL. Except for growing up, I've only lived in great cities (San Diego, Monterey, Honolulu, Kihei), and can't imagine moving somewhere less great, just to avoid taxes.