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Old 05-11-2021, 03:13 PM   #61
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We moved from San Diego to College Station, TX, in 1984. At that time, we did not know anything about COL differences and were simply going where my late ex's job went. (Remember that this was 37 years ago and nothing I say here says anything about today.... I am just rambling on.) But still, imagine our glee after we moved when we discovered that for the same price as our San Diego home, we could buy a house with twice the square footage, on twice the lot size, in a neighborhood that was probably 10x better. It was like that old TV show, "Queen for a Day". Grocery shopping was equally mind blowing and everything cost less than half.

Well, except property/school taxes which were insanely high in Texas compared with San Diego.

Back in the 1960's people talked about LSD as a "mind expanding drug". Well, this particular cross country move wasn't a drug, but it was sure mind expanding for me.
We got sort of a "reverse" surprise from W2R. We thought our tax expenses would go through the roof. When we moved to HI we were "prepared" for housing costs and most other things (consumables) to be higher. What surprised us was our low tax bill. No, state tax rates aren't a lot lower than what I'm reading about from the Cali folks (I think ours go as high as 10%) but so much income is exempt from taxation for retirees that we really pay very little in state tax. RE taxes are lowest in the nation IIRC. We pay less than $2K/year.

Of course, housing costs are HIGH - but probably in line with MUCH of Cali and lower than SF and some other isolated places. If I'm making a point, being able to live someplace is combining all costs with the fact that you are retired. I can see OPs dilemma. When housing costs are on a tear and you are in the market - your retirement could be derailed if you must stay in the same area. No easy answers since we don't know the future, thus YMMV.
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Old 05-11-2021, 03:51 PM   #62
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Perhaps don't compromise on location, but carefully watch prices and buy in Winter and buy with some fixing to do That way you can spend on renovation as you have extra or earned $$$. Perhaps you will enjoy DIY

Is there any way to earn part-time $ after a long vacation

It sounds like retirement is very important to you. For me, time became more important than extra $ so I retired. However, I was confident I could keep initial discretionary costs low and adjust to be secure if circumstances changed.
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Old 05-11-2021, 03:55 PM   #63
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That was my point I think they missed...CA is simply not very attractive for a new retiree coming from out-of-state.

Sure, those who bought a home back during Reagan's terms have greatly benefitted from Prop 13 over the decades.

Still, as you note the increased costs, which a retiree has to pay, year after year, for everything else in CA offsets that for someone looking for a new place to retire...heck, even Hawaii might be more attractive for those with a public pension.

California may not be attractive for some retirees due to the high housing costs. Yet, there are many retirees in our senior clubs who moved here in retirement, but they tend to be high income households. Many of the people we know who moved here in retirement did so because their kids and grandkids are here. Income taxes and house size weren't their main criteria. Capitol Journal: High taxes be damned, the rich keep moving to California - Los Angeles Times (latimes.com)
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Old 05-11-2021, 04:07 PM   #64
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The kids/grandkids thing seems to be the big motivator for my family too. My wife and I don't have any kids but all of my nieces and nephews have moved to Seattle or thereabouts, and their parents are compelled to come to the land of high costs.
I really want to build our last home in 2 years, but this market does have me worried, especially when you when you couple it with the cost of building materials.
2 years out I don't feel like I'm able to plan for anything. The permit process is also glacially slow.
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Old 05-11-2021, 04:15 PM   #65
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Back to OPs original question: I would stick with the housing budget and buy something smaller. Baring that I would keep working longer since I don't want to move from my adopted home state. If you are OK with moving then you can take advantage of geographic arbitrage.

Side comments: This was the exact scenario going through my mind five years ago so I started moving the chess pieces then rather than waiting for THE day when I am ready to FIRE. e.g. bought a modest piece of land which is my dream RE, started arranging assets/investments focusing on cashflow requirements in RE, etc. I mention this for the young dreamers. I am treating RE as a glide path rather than flipping a switch. I am still working but this glide path allowed us to move to the farm property during this housing frenzy which allowed us to sell the monster house we had at a nice gain. Let someone else pay the giant tax bill going forward. And speaking of tax bill, I have also made conscious efforts to lower our future taxes (both income and property taxes). The farm property now has ag valuation in place which cuts down the property tax bill in half. YMMV.
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Old 05-11-2021, 04:23 PM   #66
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Believe it or not, stocks and houses will come back to earth. When have they not?
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Old 05-11-2021, 08:31 PM   #67
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Iíve often wondered what expenses other than housing are really higher in Southern California. We own our home outright. We do pay a fair amount in taxes even with the benefit of Prop 13. But other than housing, I canít really say I notice anything here costing more than I would anticipate it costing in other parts of the country.

We drive Teslas so gas is not a factor for us. We live by the beach so we donít need much heat or air conditioning. So it doesnít feel like it cost us that much to live here. And yet we still spend around $110K per year to live what I would call a relatively ďmodestĒ lifestyle, which seems to be quite a bit more than others are spending in LCOL areas.


Gasoline is a lot higher in CA due to emissions regulations. When DH and I seriously considered leaving CA, we did a spreadsheet of the things we commonly buy and compared prices for those items in FL, TX, NV, and CA. Even for produce grown in CA, prices were much lower for groceries in other states. Labor costs are higher in CA which drives up prices at retail, dining out, etc. Utilities are about the only thing Iíve personally seen thatís lower.
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Old 05-11-2021, 08:55 PM   #68
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It depends on how old you are. It makes a difference if your 50 or 65
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Old 05-11-2021, 10:08 PM   #69
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Gasoline is a lot higher in CA due to emissions regulations. When DH and I seriously considered leaving CA, we did a spreadsheet of the things we commonly buy and compared prices for those items in FL, TX, NV, and CA. Even for produce grown in CA, prices were much lower for groceries in other states. Labor costs are higher in CA which drives up prices at retail, dining out, etc. Utilities are about the only thing I’ve personally seen that’s lower.
I checked the produce price index by state and the retail prices don't seem much different in California compared to the other major cities listed - Produce Price Index.

Healthcare by state seems pretty similar according to this chart, with California looking to be in the middle of the pack - Healthcare Costs in All 50 States Ranked (businessinsider.com)

Gas prices are higher here. I checked the price of Costco gas in Phoenix on Gasbuddy and there was an 87 cent difference, with our local Costco being higher. So for us that would mean a couple hundred extra dollars a year on gas expenses.

We get a lot of retail and grocery staple purchases online from stores like Amazon, Walmart and Costco and I don't think any of them charge more based on state.

Your personal costs may indeed be higher in California, but for people like me who get gas and shop at Costco and eat out with coupons, we couldn't see any big savings by moving, except for housing. Our relatives in a more rural area actually pay more for most goods and services due to a lack of price competition, like only one big grocery store close by.
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Old 05-11-2021, 11:26 PM   #70
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California may not be attractive for some retirees due to the high housing costs. Yet, there are many retirees in our senior clubs who moved here in retirement, but they tend to be high income households. Many of the people we know who moved here in retirement did so because their kids and grandkids are here. Income taxes and house size weren't their main criteria. Capitol Journal: High taxes be damned, the rich keep moving to California - Los Angeles Times (latimes.com)
Previous to reading this thread, I always figured the income tax in CA was so bad, we should avoid it.
Looks like I'll have to use our numbers to see how it compares for us. Maybe it's Ok.
However the cost of housing and the property tax might still take it off the list.

Interesting thread..
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Old 05-11-2021, 11:55 PM   #71
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Perhaps don't compromise on location, but carefully watch prices and buy in Winter ...
That alone is advice I can agree with. Trying to buy now when everyone is looking to purchase and get moved in before the next school year (assuming it's a working family neighborhood) is brutal these days. This is the time of the year when inventory is at its highest, and when buyers start seeing houses go off the market quickly, they'll overspend on the next one in order to not lose it also.

Around the end of August, many sellers will lower their asking prices rather than risk being stuck with an "overpriced" property through to next Spring. You'll have less selection during this period, but you may be able to make it work and keep your budget under control.
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Old 05-12-2021, 04:22 AM   #72
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Around the end of August, many sellers will lower their asking prices rather than risk being stuck with an "overpriced" property through to next Spring. You'll have less selection during this period, but you may be able to make it work and keep your budget under control.
I second that. I have been on the both side of the fence. I was trying to sell last July and we priced the house lower than market price. The house still did not sell. We sold the same house for $110K more this spring! I have also bought the last property in December where we got a good price break. Winter effect is real everywhere.
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Old 05-12-2021, 05:56 AM   #73
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I checked the produce price index by state and the retail prices don't seem much different in California compared to the other major cities listed - Produce Price Index.

Healthcare by state seems pretty similar according to this chart, with California looking to be in the middle of the pack - Healthcare Costs in All 50 States Ranked (businessinsider.com)

Gas prices are higher here. I checked the price of Costco gas in Phoenix on Gasbuddy and there was an 87 cent difference, with our local Costco being higher. So for us that would mean a couple hundred extra dollars a year on gas expenses.

We get a lot of retail and grocery staple purchases online from stores like Amazon, Walmart and Costco and I don't think any of them charge more based on state.

Your personal costs may indeed be higher in California, but for people like me who get gas and shop at Costco and eat out with coupons, we couldn't see any big savings by moving, except for housing. Our relatives in a more rural area actually pay more for most goods and services due to a lack of price competition, like only one big grocery store close by.


All I can say is my personal study using specific items we buy frequently had very different conclusions. Anyone considering a move to another state should do their own personal study and confirm what prices will be for the major things they consume/purchase rather than relying on published indices. Just like the CPI may or may not reflect our personal rate of inflation that we are experiencing due to differences on whatís included. YMMV
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Old 05-12-2021, 08:01 AM   #74
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We are on a 4 day mission tomorrow to study these things at a possible retirement spot in our state.
It is going to be tough, but I am proposing NOT looking at properties this trip.
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Old 05-12-2021, 08:52 AM   #75
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Previous to reading this thread, I always figured the income tax in CA was so bad, we should avoid it.
Looks like I'll have to use our numbers to see how it compares for us. Maybe it's Ok.
However the cost of housing and the property tax might still take it off the list.

Interesting thread..
+1

While I am working, I would pay less state income tax in Cali. than I do in Wisconsin. (AGI ~$150k.)

Of course, maybe my salary would be higher in Cali!
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Old 05-12-2021, 08:54 AM   #76
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Believe it or not, stocks and houses will come back to earth. When have they not?

I've lived in the same area for 30+ yrs. Housing costs have NEVER dropped, although the rate of price increases has fluctuated.
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Old 05-12-2021, 09:31 AM   #77
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Originally Posted by daylatedollarshort View Post
I checked the produce price index by state and the retail prices don't seem much different in California compared to the other major cities listed - Produce Price Index.

Healthcare by state seems pretty similar according to this chart, with California looking to be in the middle of the pack - Healthcare Costs in All 50 States Ranked (businessinsider.com)

Gas prices are higher here. I checked the price of Costco gas in Phoenix on Gasbuddy and there was an 87 cent difference, with our local Costco being higher. So for us that would mean a couple hundred extra dollars a year on gas expenses.

We get a lot of retail and grocery staple purchases online from stores like Amazon, Walmart and Costco and I don't think any of them charge more based on state.

Your personal costs may indeed be higher in California, but for people like me who get gas and shop at Costco and eat out with coupons, we couldn't see any big savings by moving, except for housing. Our relatives in a more rural area actually pay more for most goods and services due to a lack of price competition, like only one big grocery store close by.
I can't vouch for your evaluation of Cali prices in general - sounds reasonable BUT where you CAN save a LOT of money in MANY states is on taxes. We did it by accident. Some folks actually plan to lower their taxes just by moving. All else being equal - and, yes, I know all else is rarely equal - you can save 10% or more JUST on taxes by changing states. Most likely, you'll find lower housing prices in those low-tax states, though we did not here in the Islands. YMMV
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Old 05-12-2021, 09:40 AM   #78
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Figuring out what the herd is doing and then doing nothing for a while or doing the opposite myself usually works out pretty well financially after a few years. Itís the FOMO moves I usually regret.
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Old 05-12-2021, 10:36 AM   #79
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All I can say is my personal study using specific items we buy frequently had very different conclusions. Anyone considering a move to another state should do their own personal study and confirm what prices will be for the major things they consume/purchase rather than relying on published indices. Just like the CPI may or may not reflect our personal rate of inflation that we are experiencing due to differences on whatís included. YMMV

It is pretty easy these day to look up individual prices online on sites like Gasbuddy, Instacart, Chili's menus by city, etc. For health insurance, our prices are on Covered California. For state income tax, the state has a tax tables and an online tax calculator here, which is what I used to get the numbers in this post: Tax calculator, tables, rates | FTB.ca.gov-.
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Old 05-12-2021, 10:50 AM   #80
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Similar situation here. We are moving to Idaho, which has a slightly higher cost of living. (So is everyone else apparently.) All said and done, we expected to have $60-$140K mortgage. We have the property and the shop is going up as we speak upon availability of materials, delays, delays, delays.

Saving grace right now is I had already priced in a $35,000 price increase, I am still working and we haven't yet listed our current home, so the value is moving in tandem with most everything else, maybe except Idaho. Move is on for 2022, no exceptions. Have waited long enough.

We have choices. Order the home now since construction time is 1 year out, sell next Spring and see what we can afford at that point or put most of our things into storage and move into our single wide mobile home on another property in Idaho and wait. We do have some flexibility since we are ordering a modular home. I have already stepped down on the floor plan and options with something I would love just as well, but still expect prices to be high.

I would love to just sell our home and move into the mobile home, saving hoards of cash every month, but also risk the uncertainty of the housing market, stock market, interest rates, etc. etc., not to mention I would no longer have a good piece of real estate appreciating anymore. Will home prices stabilize and come down? Will interest rates hold? Who knows? The scary part is, what if everything keeps escalating past two years from now and we get stuck in the middle? In one sense, bite the bullet makes a lot of sense, but that cash is really calling too, maybe a couple thousand a month.

We previously haven't set plans on the mobile home because of our pets (we need zones), but the way we are going right now, we will be going down on that count soon, so that issue should be resolved by the end of the year.
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