Are the higher powers telling me something?

[cyber888]

I agree. The higher powers are telling the OP, he can sell his house and quit his job and he'd be fine.

The Higher Power is telling you to pack up your family and move them to a lower cost of living place. And then you really don't need to worry about your extreme stress levels.

I'd hate to think I had a $1.2 million house and your financial resources and still be living middle class.

There are places that you could be living like a king on far less cash outflow. There's a reason thousands of people are moving out of your state.

 

[StuckinCT]

I feel confident in predicting that will never happen.

I am not as confident- I don't think we will have full scale school regional-ization, but also think there is an agenda to level the playing field in this state, which is why people are leaving. I don't want to get political, as I think income inequality is a legitimate issue, but the politicians see the hedge fund managers making seven and eight figures a year and go elephant hunting, squashing people like me in the process.

So they can do things like change the vehicle tax from a municipal revenue source to the state, change taxing districts etc which will take tax revenue from towns with fat grand lists to redistribute wealth. They also know people are leaving, which is why they have raised the thresholds for the estate tax and income tax on Social Security, annuities and pensions. CT is the only place where if you sell an expensive home, they will add an extra real estate transfer tax and give it back to you as a credit if you stay in state.

We have a lot of great things, schools, low crime, bucolic suburbia, but the measures to address the chasm between the urban poor and the wealthy is scaring everyone, including corporations, away to places like Florida, Texas and North Carolina. I did not vote for our Governor, but I think he understands business and inherited a mess, but I do sincerely hope he can change the attitude here- we are not the bad guys. I know so many Ivy League educated people who worked their butts off to get into school and now commute four hours a day so their kids can have a nice place to grow up, and many of them came from humble backgrounds, like my wife.

 

[socca]

We have a lot of great things, schools, low crime, bucolic suburbia, but ...

Over 30 years ago I lived for a year in CT, working in Tolland and renting an apartment in nearby Vernon. I thought the countryside around Tolland was charming, but the houses were hopelessly expensive for a young engineer just starting his career.

I just checked zillow to see what's available in that area these days. It's possible to buy some nice houses for relatively low prices, but the real estate taxes are about 2.5% of market value. For comparison, the 2019 RE tax for my Florida house is 0.9% of market value. I hope the residents of CT are getting good value for their tax dollars.

 

[SecretlyFI]

NJ property tax is sky high too. Ours is 2.75% of market value. Being frugal, I’m still in the same house we bought in 1993 and long since paid off. But it really stung last year when the taxes breached the $10k a year mark. You do everything right, get out of debt, save all that interest expense...and now still writing a check for almost a thousand a month?! Ouch. Oh and the tolls on the state roads I take to work are $13 a day...and that’s not any bridges or tunnels to NYC, just roads within NJ. Way too expensive. Financially, would love to move when we retire, but all our family & friends are here, so really conflicted on the decision.

 

[Gumby]

I hope the residents of CT are getting good value for their tax dollars.

Why, yes. Yes we are. It's a great place to live.

 

[explanade]

All the taxes are for proximity to NYC?

 

[Murph]

Huh?

You need a Master’s to teach 3rd grade? Since when?

 

[stephenson]

Research and travel.

Pull the plug early taking as much with you as possible.

 

[FI_by_2023]

A year ago firecalc was showing 96% spending $22k a month living in one of the more expensive areas of the country outside NYC.

Today firecalc has us firmly at 100%, and the job is adding a lot of unnecessary stress. I am 48, wife is 38 w/ three kids 10, 8 and 6. Have a $1.3mm house w/ $500k mortgage, $7.85mm in investments for retirement mostly non qualified, $1.4mm for education and total net worth just over $10mm.

StuckinCT, have followed your posts the past few years. Just curious, why has your investment portfolio only marginally grown the last four years. I had impression you are largely stocks and would have expected higher increases. Don’t get me wrong, great nest egg.

 

[Retired Expat]

A year ago firecalc was showing 96% spending $22k a month living in one of the more expensive areas of the country outside NYC.

Today firecalc has us firmly at 100%, and the job is adding a lot of unnecessary stress. I am 48, wife is 38 w/ three kids 10, 8 and 6. Have a $1.3mm house w/ $500k mortgage, $7.85mm in investments for retirement mostly non qualified, $1.4mm for education and total net worth just over $10mm.

We can't sell our house as our real estate market is frozen due to high property and local taxes, we paid $1.7mm and have updated kitchen etc.

My wife is currently pursuing her masters degree to become a 3rd grade teacher which she hopes to complete in two years. She is a pre-school teacher now and runs the book fair, library auction etc in our town so she is well connected. This has been a lifelong dream and now that the kids are a little older, it is doable.

If she teaches in the public schools, it would provide platinum health care and her income would pad our passive income of $250k- we spend $260k roughly with tax. We also are quitting our country club with a huge new assessment to go to a smaller club with just racquets / pool.

This could be the third leg of the stool w/ healthcare, extra income, a potential pension and ample time off to travel.

I am wondering if I should wait until she gets hired or if I should just call it quits? The club thing sort of just happened and so did the teacher pursuit. I think the stress is effecting my health - luckily I exercise a lot to manage it and I eat relatively well, but I am sacred to retire at 48. The other concern is what if my kids need to go to private school, so much time until they are out of the nest!

Wondering what others would do in my situation..

I would pull the plug. Lots of savings to be had in retirement if you want to pursue it. Learn to cook and eat home more, clothing, commuting, do the work around the house you pay others to do and learn new skills.

And you can of course move! The loss on the house sale will pay for itself in lower state income and property taxes and general lower cost of living you will likely see somewhere else. Okay not in California...... no one wants to lose money of course, so I get it.

I took a $500k loss on my CA home in 2012 when getting divorced. My freedom was worth it and in the last 7 years more than regained that loss in lower expenses having moved away. Do I miss the tennis court?, absolutely not, the pool? 2x a year and I go to the club instead but surely not the endless maintenance and related costs.

You obviously are a bright guy to have been so successful and can make it all work out in your favor. Now if your 3 kids want to grow up and all go to Harvard, and Harvard Medical school, and you intend to buy them their first homes, well.....better do the numbers!

 

[BoodaGazelle]

Start maximizing your non-IRA assets, including converting to Roth... if you lurk around here, almost every FIRE-we without company-paid healthcare has to live on this money to avoid paying $2000 per month for health care through the ACA.

 

[PoorOldCountryBoy]

Good luck

OP, Just an educational note: Have you ever looked into alternative schooling for you ADHD kids? I'm thinking along the lines of schools in Colorado, etc. that allow kids to climb mountains for 4 hours and only get an hour or two of book work, but find they can get it done and do quite well. For many healthy active boys, the public schools are an rather toxic environment to be put in these days. (I'm sure your DW may not like to hear that seeing how she is being absorbed by the Primary School Borg, but these issues are very well documented in the educational literature, so sorry...but even sorrier for the kids that need to endure it.)

I'd suggest you take a week vacation in Utah or Colorado and have them hike all day and see the results. If you like what you see, consider park city, UT or the front range cities in CO like Boulder, Longmont, Loveland, Fort Collins. Boulder is expensive but still a bargain compared to southern CT.

 

[Amethyst]

+1 And at your asset level, many of those other places are nice, and have good schools!

Don't be held hostage by "I need to get $XXXX for my house."

I'd hate to think I had a $1.2 million house and your financial resources and still be living middle class.

There are places that you could be living like a king on far less cash outflow. .

 

[daschtick]

Have a $1.3mm house w/ $500k mortgage...

We can't sell our house as our real estate market is frozen due to high property and local taxes, we paid $1.7mm and have updated kitchen etc.

You are looking at this incorrectly. I fully understand that you will take a loss on the sale of the home, but staying there is not going to make anything better.

As Dave Ramsey often preaches, you need to look at it differently. Read this carefully....If you did not own a house right now, would you buy yours for $1.3mm with a $500k mortgage? Would you?

HECK NO! Staying put only delays the inevitable. Sell the house, collect your $800k, and move on with your life. The house is an anchor pulling you down. You've already 'lost' the money. Staying longer doesn't help anything. It's not going to appreciate any faster than any other real estate. Collect your money and move on. You've done extremely well - now don't let one poor investment setback determine your life course when you have such a remarkable stash.

Your sound like my in-laws who took a bath in GE stock, but refused to sell because it was too much of a loss......so they stayed in, and took more of a loss. Don't make this mistake!

 

[Erbragg1]

Cathy, good point on the schools and difficulty moving back to a HCOL area. The $250k is our dividend and interest income, so that would be part of our withdrawal rate. The private school we would send to is $28k all in, and I am thinking mainly of our two boys who have ADHD. So far our public schools have done an amazing job, maybe better than a private school could do, so the chances of needing to go private have decreased for sure.

A little advice on private schools for kids with ADHD.... Do your homework and make sure the private schools you are looking at for your kids are equipped and willing to provide extra help for kids that have special needs. My kids were in private school for a few years. My son excelled and my daughter struggled. Eventually, my D was diagnosed with ADHD. The private school was pretty much useless with providing her with help. In fact, they were essentially pushing us to send her to public school since the public schools could provide more help and had teachers that specialize in helping kids like my D. The private school wants to keep only the kids that have high test scores so they can boast how great they are versus public school.

We pulled both kids from private when they were in 5th and 3rd grade. My S was much happier in public school (less clicky and more friends) and my D did much better with her school work in public school. Ultimately, both graduated and both are in college now.

 

[StuckinCT]

StuckinCT, have followed your posts the past few years. Just curious, why has your investment portfolio only marginally grown the last four years. I had impression you are largely stocks and would have expected higher increases. Don’t get me wrong, great nest egg.

Well, the house I used to carry at $1.6mm, then $1.5mm now I have it at $1.2mm. So if my house had not lost so much value on paper I would be at $10.7mm or so.

I am about 75% stocks and mainly value stocks, up 14% year was fairly flat last year. I think when I first posted I was in the high 8s.

 

[StuckinCT]

I would pull the plug. Lots of savings to be had in retirement if you want to pursue it. Learn to cook and eat home more, clothing, commuting, do the work around the house you pay others to do and learn new skills.

And you can of course move! The loss on the house sale will pay for itself in lower state income and property taxes and general lower cost of living you will likely see somewhere else. Okay not in California...... no one wants to lose money of course, so I get it.

I took a $500k loss on my CA home in 2012 when getting divorced. My freedom was worth it and in the last 7 years more than regained that loss in lower expenses having moved away. Do I miss the tennis court?, absolutely not, the pool? 2x a year and I go to the club instead but surely not the endless maintenance and related costs.

You obviously are a bright guy to have been so successful and can make it all work out in your favor. Now if your 3 kids want to grow up and all go to Harvard, and Harvard Medical school, and you intend to buy them their first homes, well.....better do the numbers!

Yes, this is sage advice, I could probably sell it for $1.1mm and take a $700k hit, but even that is not a sure thing. Basically the bargain hunters come in at 50% from purchase price, that is sort of the bogey.

What is going on in CT is worse than in CA post financial crisis from what I can see, but there are similarities. I kind of think we are more like a Rochester NY, where people just moved away. We are close to NYC so I expect some rebound at some point but how many people have experienced a 40-50% drop in their real estate market?

 

[timemoveson]

Yes, this is sage advice, I could probably sell it for $1.1mm and take a $700k hit, but even that is not a sure thing. Basically the bargain hunters come in at 50% from purchase price, that is sort of the bogey.

What is going on in CT is worse than in CA post financial crisis from what I can see, but there are similarities. I kind of think we are more like a Rochester NY, where people just moved away. We are close to NYC so I expect some rebound at some point but how many people have experienced a 40-50% drop in their real estate market?

Stuck, I've also read your historical posts and I'm sorry for your situation. I'm you, without your real estate problems, a little older and made choices over the years which turned out great but with many big "hits" along the way including on homes.

I believe you should strongly consider getting out of that house now, taking whatever losses you require to do a life reset in all the positive dimensions you've talked about.

Normal people don't consider and cannot fathom taking million dollar hits. You are not normal in this area. Neither am I and I know many in the same space. Such people make and lose 6 and 7 figures based on decisions and the clear thinkers don't get caught up (for too long) in sunk cost fallacies and other such money psychology traps. They are an incredible emotional and financial drain!

Please give this strong consideration.

 

[tb001]

Ah, that explains it. I thought I remembered you posting a higher property value as well. We're in CA and though things definitely went down, it hasn't been as extreme and most property values have recovered and appreciated. And I thought our taxes were bad--that's painful!

I don't know what the higher powers are telling you, but we're in a very similar place with regard to spend and net worth. A bit higher on the spend and a bit lower on net worth. Wr've been having very similar discussions--Mt Pleasant was even on my short list of places to move! Unfortunately, couldn't convince DH to leave CA, but we relocated to a HCOL area instead of a VHCOL one. That meant I've worked PT (which means a normal FT job) remotely for the last 18mo. DH has been consulting FT since we moved, so FT work, but not consistent and no medical benefits.

My position is ending in December, so at a minimum, I'm taking time off to be home with the family. Have no interest in going back to work unless it's necessary. DH will work as long as there are decent paying opportunities. So not officially completely retired, but taking a big step back and looking forward to it.

Two things that get brought up a lot that are worth thinking about are how you will manage the loss of identity and having a plan for how you will spend your time. For hyper career types especially I think those two things are under appreciated. I've had time to ease into both, having been PT for a while, but it was still a bit jarring to be asked what I did for a living, knowing it would change soon. The time thing, well, I have way too many interests now, so no issues there!

 

[Teacher Terry]

You can afford to move and live where you want. If you like where you live stay. You have enough money to do either.

 

[bolt]

Yes, this is sage advice, I could probably sell it for $1.1mm and take a $700k hit, but even that is not a sure thing. Basically the bargain hunters come in at 50% from purchase price, that is sort of the bogey.

What is going on in CT is worse than in CA post financial crisis from what I can see, but there are similarities. I kind of think we are more like a Rochester NY, where people just moved away. We are close to NYC so I expect some rebound at some point but how many people have experienced a 40-50% drop in their real estate market?

IMO, You're spending >100000% to make <1000%.
Forget numbers, thriving businesses use %.
Is a 3rd grade teachers minimal qualifying terms the cost of a Masters or Doctorate necessary, or prudent under the circumstances?

Two pals merely graduated HS. One started making subs, pizza, and such. His brother became a plumber/electrician/handyman. If you purchased appliances @ Sears, HomeDepot, etc. he & his crew'd instal it for you reasonably, as an independent contractors.

If some lifestyle permits it some people step up.

Best wishes.......

 

[StuckinCT]

Ah, that explains it. I thought I remembered you posting a higher property value as well. We're in CA and though things definitely went down, it hasn't been as extreme and most property values have recovered and appreciated. And I thought our taxes were bad--that's painful!

I don't know what the higher powers are telling you, but we're in a very similar place with regard to spend and net worth. A bit higher on the spend and a bit lower on net worth. Wr've been having very similar discussions--Mt Pleasant was even on my short list of places to move! Unfortunately, couldn't convince DH to leave CA, but we relocated to a HCOL area instead of a VHCOL one. That meant I've worked PT (which means a normal FT job) remotely for the last 18mo. DH has been consulting FT since we moved, so FT work, but not consistent and no medical benefits.

My position is ending in December, so at a minimum, I'm taking time off to be home with the family. Have no interest in going back to work unless it's necessary. DH will work as long as there are decent paying opportunities. So not officially completely retired, but taking a big step back and looking forward to it.

Two things that get brought up a lot that are worth thinking about are how you will manage the loss of identity and having a plan for how you will spend your time. For hyper career types especially I think those two things are under appreciated. I've had time to ease into both, having been PT for a while, but it was still a bit jarring to be asked what I did for a living, knowing it would change soon. The time thing, well, I have way too many interests now, so no issues there!

Very interesting re Mt Pleasant, we're heading down the end of the month to have a look around after giving up on Raleigh - which I like but the DW has concerns on the schools overcrowding etc.

I agree with the identity issue. I think for me in retirement, I envision myself volunteering and maybe managing a few rental/investment properties. I would never start a business here- too risky and expensive and just another opportunity for the state to shake me down.

Yes CT taxes are out of control, only NY has a higher tax burden as of last year and I know NJ raised taxes but at least they have airports, services. We are dead last in the country in terms of the economy since the financial crisis, so there is no growth to fund all the programs so they just keep raising taxes. It's painful.

It is still a great place to live and even I think the real estate market is oversold here. I recognize that there are far worse problems to have, but it is conundrum.

 

[Housewife]

Stuck, I am also stuck in the southwestern corner of CT. Beautiful town, good school district, great place to raise a family, except for high taxes, free falling property market, fleeing businesses and non-stop political fiascos such as regionalization of schools and redistribution of wealth across towns.

I have two children in local public elementary school. DH and I both have many years to go before Medicare. We do not qualify for ACA subsidies. We always worry about whether we have enough, even though firecalc says that we should be fine. So I understand where your frustration comes from. A few quick thoughts though—

— You have accumulated enough wealth to stay in CT. You may be able to spend more lavishly if you move south, but you can certainly live comfortably here as well. You might have been a member of the most exclusive country club in town, but maybe you can be almost as happy just being part of swim and racquet club. Life is still good. Cutting a little extra here and there goes a long way.

— I also worked in finance before becoming a SAHM. The consistently long hours and constant stress may very well have contributed to some of the chronic health problems I am dealing with now. Get out of it when you can. An extra million or two will not make any material difference to your net worth. Your health is your most valuable asset (cliche, but ever so true).

— I assume you live in one of the nicer towns in Fairfield county. Almost all these towns have great schools and great resources for special education. Going to private school may or may not have much additional benefits. Even if you do decide to send two children to private school, the additional cost is within $500k-$1mm range. Earmark it as such, and you should still have enough in the pot for your retirement.

— If your wife is willing, able and happy to become a teacher, and you are willing to shoulder more housework and chauffeuring the kids, then it would absolutely be the perfect situation. One of my biggest worries is the uncertainty related to HC, particularly how few providers there are in individual market in CT, and how expensive it has become. If your wife’s teaching job can take that worry away, not to mention a potential pension down the road, then you are definitely sitting pretty.

Whatever you decide to do, you should be fine financially.

 

[Gumby]

I'm not seeing a real estate collapse in my area. Based on my tax assessment and Zillow (which has proven to be fairly accurate with respect to sales in the neighborhood), my home value has almost exactly kept up with inflation over the past 10 years.

 

[Housewife]

We are down about 25% compared to our cost basis, and this is being optimistic. This does not include any transaction related expenses (commissions, fees, etc). If we sell now, we will be down even more. Our house is probably around average or a bit smaller than a typical house in our town. The big houses with big land are down more, and in many cases just linger on market for years.