Impact of expensive decisions

[Rich_by_the_Bay]

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?

 

[REWahoo]

What else?

Do they sell lottery tickets in California?

 

[W2R]

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.

 

[bbbamI]

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.

 

[Moemg]

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 !

 

[pixelville]

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.

 

[FIREd]

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.

 

[audreyh1]

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.

 

[ERhoosier]

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).

 

[MichaelB]

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.

 

[Buckeye]

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?

 

[donheff]

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.

 

[LakeTravis]

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.

 

[Rich_by_the_Bay]

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_by_the_Bay]

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.

 

[kramer]

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.

 

[Rich_by_the_Bay]

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

 

[Midpack]

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.

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.

 

[MBAustin]

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!

 

[clifp]

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.

 

[Rich_by_the_Bay]

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.

Hmm.. good ideas.

 

[imoldernu]

Wish you the very best in this move.
Though My CA experience lasted only lasted a few years... work, not living there... my view may be through rose colored glasses. Enough to see and experience within a 2 hour drive, to last several lifetimes.
My territory ranged (central) Oakland... to Grass Valley and Auburn, Placerville, Sonora, and Twain Harte and Watsonville. The mountains Tahoe, and down to Yosemite, just fabulous. Got caught up in the "Gold Rush" history culture, and totally enjoyed San Francisco, as well as Sacramento. First experience with calamari , Fisherman's wharf....1983, when I didn't realize it was squid... @ $14.95.
A great place... culture, climate, history, and enough to stay busy forever.

The only downsides, for us, would have been #1... we couldn't afford it... #2 it takes a while to build a circle of friends and we're getting a little old in the tooth to do that... ok when young, but a little harder as we age. #3. just us, but grand kids are great 'til about age 13-15, after that, not so much.

Affordability is relative. IMHO, it's a personal thing, and based on my short experience here, there aren't many who would take a chance based on a wish and a hope. Am certain you have that figured.

Looking far ahead, one thought... in the event of need for short or longer term assisted, retirement or rehabilitative living, what are the relative costs? Comparable costs in our area, (appt. for 2) is about $40K/yr. Our friends in Long Island are looking at equivalent costs of nearly $100,000/yr.

Last thing... Will you do the move?... or as I'd guess have it done. After 7 company paid/managed moves, the reality of self moving is/was a nightmare. If/when we move again, will pray for a fire!

Envy your new adventure. A truly great part of the world.

 

[braumeister]

just us, but grand kids are great 'til about age 13-15, after that, not so much.

This is such a good point.
Looking back, I had a really marvelous relationship with my grandparents (Mom's parents) all through my childhood. For a few intervals, we all lived in the same house, extended family, for 2-3 years at a time.

But when I got into high school, my world opened up to so many new interests that there was no longer time to spend with them, so they decided the time had come to move to Florida.

It was great while it lasted, but I think my memory of it must be fairly typical.

 

[Koolau]

Rich, just some random thoughts from someone who moved 5000 miles after ER:

Consider NOT moving your "stuff". I always like to tell the story of moving to Paradise in 4 suitcases (two air fares = 4 bags). This was prior to the airlines "gouging" for luggage handling - as cheap as I am, the story now might have been 'moving to Paradise wearing the clothes on our backs.' We calculated what it would cost to move our stuff and found out 1) Nothing we owned was worth the cost of moving it. 2) Most of our stuff would not fit our new life-style. 3) Believe it or don't, we could store our stuff cheaper than we could move it assuming we disposed of it within a few years. The added advantage of storage is that you can 'come back' if the move doesn't work out. Truly a YMMV scenario if ever there was one.

You may actually SAVE money by moving closer to kids/grand kids. Our situation is the reverse. We moved AWAY from everyone. So now one of the big prices of Paradise is returning regularly to the mainland. Now, you no longer need to travel to SF because you're already there.

You will quickly learn how to ameliorate the costs which typically enter into the scary C-O-L comparisons you read about moving to a so-called "high C-O-L" area like SF (or Hawaii in our case). You've already figured out that cars are a good place to cut back (substituting PT). You'll find many more once moved. Our favorite example is substituting frozen blueberries for fresh. (Fresh can cost upward of a dollar per ounce at times).

Slight disclaimer here: We ARE spending considerably more than we had originally calculated for our change of venue. Fortunately, so far, it is not a problem to us. If it becomes a problem, we know how to fix the problem without moving back to the mainland. Spending several months on the mainland each year is the single biggest "unplanned" expense we face. If that becomes a problem, we can adapt. Again, YMMV.

Best of luck!