Considering moving from MCOL area to HCOL area for retirement

[RyanSoCal]

I live in Southern California and we might become neighbors if you make this move.

That being said, you really need to think about how all of your major costs will change if you move to this place. CA taxes are really high, gas prices are way higher than most other places in the country, there are other higher costs, too.

My family and I love the weather and we have extended family here so we plan to stay until the kids go to college. However, I achieved FI last year and we are looking to move to a place with a MCOL/LCOL to as part of our plan to maintain FIRE for the long run.

Good luck.

 

[ut2sua]

Hello. We are considering moving from our MCOL area to a HCOL area for retirement. To do this we would probably have to give up the idea of living in a single family home and move into a condo/or townhome. This would still cost us an extra $250,000. If we did this our numbers would be:

$750,000 (AA 50/50, $400k of this is non-ira) after paying cash for residence
age: both 59
pensions = $27,550/yr
SS at 67 for both= $51,000/yr
estimated expenses (including HC and taxes) $60k/yr
no debts
firecalc says 100% success rate
retiring in May 2020

If we stay where we are our stash would remain $1M

What do you folks think of this plan in terms of success or practicality. Is it too risky moving to the HCOL area and reducing our stash to $750k?

Thank you for helping us

Personally, I don't see that you "lost" $250k for this move. That $ is just pushed into your residence value. The real cost, IMO, is the HOA monthly cost of the condo and other things such as taxes and cost of living vs where you currently live. I think it is better for you to make this move than to travel back and forth every year given that the travel cost is gone, whereas this one time cost boosts your home NW. Doing the move sounds like it could cut down your vacation budget to other places (my guess), and that would be a way to recover some of that cost too.

 

[Out_the_Door]

I've lived in HCOL ares for my entire life. I vote for the move

I ditto this sentiment - just retired six days ago and I have no intention of leaving SoCal for at least ten more years (at the earliest) and if/when I do leave it will probably be just further up the coast (in the Carmel area)

 

[ShokWaveRider]

I ditto this sentiment - just retired six days ago and I have no intention of leaving SoCal for at least ten more years (at the earliest) and if/when I do leave it will probably be just further up the coast (in the Carmel area)

Never understood why folks want to move to LCOL Locations. Less Services, you name it. HCOL area have their benefits, the older we get the more we need those services. It should be the reverse.

 

[aja8888]

Never understood why folks want to move to LCOL Locations. Less Services, you name it. HCOL area have their benefits, the older we get the more we need those services. It should be the reverse.

We live in a LCOL area (north side of Houston) and we have the best medical facilities in the southwest within a mile of us along with top shelf entertainment, colleges, shops, etc. It depends on where the LCOL area is located. You can't generalize.

 

[ShokWaveRider]

We live in a LCOL area (north side of Houston) and we have the best medical facilities in the southwest within a mile of us along with top shelf entertainment, colleges, shops, etc. It depends on where the LCOL area is located. You can't generalize.

What are your House RE Taxes, Hardly Low Cost based on my friends that live there.

 

[aja8888]

What are your House RE Taxes, Hardly Low Cost based on my friends that live there.

2.1% of appraised value, and nice houses here sell for $120 sq/ft. No state income tax.

M.D. Anderson is 0.5 miles away and there are 4 large hospitals within 1.5 miles.

Lots of shopping, fine restaurants, community activities, etc.

 

[Mountain skier]

Personally, I don't see that you "lost" $250k for this move. That $ is just pushed into your residence value. The real cost, IMO, is the HOA monthly cost of the condo and other things such as taxes and cost of living vs where you currently live. I think it is better for you to make this move than to travel back and forth every year given that the travel cost is gone, whereas this one time cost boosts your home NW. Doing the move sounds like it could cut down your vacation budget to other places (my guess), and that would be a way to recover some of that cost too.

Exactly. If we stay where we currently live DW and I would want to disappear for parts of the summer-which gets expensive. I figure those high travel costs would approximate the higher housing/HOA/increased costs of living in So Cal.

 

[Mmm Rrr]

I'm getting ready to move from a MCOL area (eastern WA) to a HCOL area (Seattle). Even though my primary residence will go from a $250k house to a $500k condo, I am certain that the investment in the condo is sound and that the extra $250k investment will continue to appreciate.

I also am happy to leave the responsibility and cost of the stand-alone house behind and feel that the HOA payment is a reasonable alternative.

 

[pb4uski]

Hello. We are considering moving from our MCOL area to a HCOL area for retirement. To do this we would probably have to give up the idea of living in a single family home and move into a condo/or townhome. ...

Sounds like financially you are all set though I think it would be prudent to run the numbers assuming that one or the other of you passed and see if the result with only survivor SS still has a high success rate (as breaumeister suggested).

My main concern is non-financial. There are all sorts of stories of people who made major changes in life when they retired and it ended up being the grass is greener on the other side of the fence sort of thing. You might be better off to sell the MCOL abode, invest the proceeds and rent for a year or so to make sure that the So Cal situation is your cup of tea.

We had some friends who retired about the same time, moved to Florida to a retirement community and then a few years later sold and moved "back home" and similar stories abound.

As far as condo vs a SFH, we have both and I much prefer condo living.... now we have a top-floor end unit so nobody above us and only one neighbor to the side but the common wall is good so we hardly hear the neighbor to the side and hadrly ever hear the people below us (in part because they are hardly ever there).

 

[Mountain skier]

Sounds like financially you are all set though I think it would be prudent to run the numbers assuming that one or the other of you passed and see if the result with only survivor SS still has a high success rate (as breaumeister suggested).

My main concern is non-financial. There are all sorts of stories of people who made major changes in life when they retired and it ended up being the grass is greener on the other side of the fence sort of thing. You might be better off to sell the MCOL abode, invest the proceeds and rent for a year or so to make sure that the So Cal situation is your cup of tea.

We had some friends who retired about the same time, moved to Florida to a retirement community and then a few years later sold and moved "back home" and similar stories abound.

As far as condo vs a SFH, we have both and I much prefer condo living.... now we have a top-floor end unit so nobody above us and only one neighbor to the side but the common wall is good so we hardly hear the neighbor to the side and hadrly ever hear the people below us (in part because they are hardly ever there).

One our huge concerns is the noise factor of living in a condo/townhome. We certainly do not want to hear someone else's tv, arguments, washing machine, etc.

My folks now live in a townhome but we have never heard their neighbors. But from what we understand from other folks who live in a condo/townhome they do sometimes hear there neighbors.

 

[pb4uski]

^^^ Another good reason to rent for a while to see if condo living suits you.

 

[Retired Expat]

Take a closer look at housing costs and expenses of the house versus condo. And then look at the amenities and benefits offered. A pool with no pool maintenance and the cost of running the pool pump (assuming you have a pool now), savings on landscaping or time gained, give up Gym membership assuming new condo has one. General repairs and upgrades, cooling and electric costs. Etc. You paying for water to irrigate, fill the pool etc?

Also consider implications if you might want to do swaps or Airbnb rentals for a condo versus a stand alone house, if you want to travel? Condo may not allow it but if they do is much easier usually.

 

[Hyper]

I would research the HCOL area to see how they vote in taxes, raise property taxes, etc. The area we live in our state NEVER ever lowers property taxes even with several yr downturns and considerably lower valuations. They go up every single yr regardless of mill limits which I was told each of the past few yrs were maxed out. Our county horribly mishandles finances. If we planned on a tight retirement, our county would not be a good choice for retirement. Over a 20yr time frame the upward cost could be considerable.