Fire Calc at 91%, just one more step...

[StuckinCT]

I am 45 and have been on the forum here and there over the last year or so and with this recent market rally, the firecalc is at 91%! This also assumes we maintain our current spending and no social security. I expect our spending to drop considerably when and if I can unload my high property tax house- $33k annually in CT.

But the old saying, it is always darkest before the dawn and I'm noticing a pick up in real estate this spring in CT. We may have had the climatic low last year with GE leaving and now that the state cannot raise taxes anymore as revenue has dropped with each increase, bargain hunters have appeared and I might be able to unload the place and get the firecalc above 95% with a more modest home and lower property taxes. I am still going to take a hit on the house $200- 300k, so it is a tough decision, but how many retired people pay $33k plus in property taxes?

Finally, I have always been of the view to not touch principal, but we would have to liquidate about $25k a year banking on firecalc of a likely $6.7mm portfolio in a $1mm downsized main house, $300k VT house, $1.25 mm in education funds for three kids 7,6, & 4 and no debt. I called the realtor yesterday and hoping we can put the big house on the market this week!

 

[W2R]

Pretty exciting - - it sounds like things are really coming together. I am so happy for you!

 

[Koolau]

Yeah, I can't even imagine that kind of RE tax! Our place is relatively small (1100 SF) but RE taxes are only $1500 and that's in Paradise! Of course, they get it other ways, heh, heh. Excise tax (seems like a sales tax when you pay it) is paid at each stage along the "food chain" and added in. So the "modest" 4.7% doesn't seem too bad at the point of sale, but if you could see what has already been added to your cost of goods, you would realize how onerous GET is. The real kicker is that you pay tax on the previously paid (and added in) tax(s). But I digress.

Curious (nosy) how such a RE tax fits in with the overall budget. In our case, it would be almost a third! YMMV and good luck with the downsizing.

 

[sanfanciscotreat]

Why would you want to stay in CT?

 

[Gumby]

Why would you want to stay in CT?

Because it's the finest state in the country.

 

[Tetto]

Because it's the finest state in the country.

Sarcasm at its finest, right??! Because I beg to differ....

 

[Ready]

Maybe I'm not understanding the OP's situation, but if you only have a 91% success rate on a 6.7M portfolio, you must be living very well. What are you spending all that money on?

 

[rodi]

Congratulations StuckInCT. That is a great feeling to see your goal getting closer.

 

[SecondCor521]

You could probably get to 100% success rate in FIREcalc with plenty left over if you moved to anywhere in flyover country. My entire annual budget for everything(*) for me and three late teen / young adult kids here part time is less than your property tax bill.

(*) except child support, which I don't count in this case.

 

[StuckinCT]

Yeah, I can't even imagine that kind of RE tax! Our place is relatively small (1100 SF) but RE taxes are only $1500 and that's in Paradise! Of course, they get it other ways, heh, heh. Excise tax (seems like a sales tax when you pay it) is paid at each stage along the "food chain" and added in. So the "modest" 4.7% doesn't seem too bad at the point of sale, but if you could see what has already been added to your cost of goods, you would realize how onerous GET is. The real kicker is that you pay tax on the previously paid (and added in) tax(s). But I digress.

Curious (nosy) how such a RE tax fits in with the overall budget. In our case, it would be almost a third! YMMV and good luck with the downsizing.

Total budget is 240k including taxes or 20k per mo but goal is to get it to 17.5 k per mo. So right now real estate taxes are about 12.5% of budget, not including vaca house in VT taxes.

I would love to relocate to a super low property tax area, but might just downsize here because we are so entrenched in the area. Austin TX and Sarasota FL are also tempting because they have great swimming programs, we have one of the best here in CT.

I am also keeping an eye on this proposal to eliminate the state and local income tax deduction, that could definitely sway me towards a no income tax state.

 

[StuckinCT]

Maybe I'm not understanding the OP's situation, but if you only have a 91% success rate on a 6.7M portfolio, you must be living very well. What are you spending all that money on?

We have a few extravagances, country club at 1800 a month, I drive a mid range Porsche crossover, vacation property in VT and 18k per year vacation budget, but honestly everything else is just keeping up with the cost of living around here. Forbes ranks this the most expensive place in the country to raise a family and the guy cutting your hair, mowing your lawn and making your pizza also has the same expenses. Every time I go anywhere else in the country, except maybe Bay Area, I am shocked how much less expensive everything is.

We are also the highest tax state in the land, my car tax alone is 1500 a year, and Obamacare which is technically a tax is also 2200 a month including HSA in our county. I live on the fringe of the more expensive areas, in Westchester county I doubt you could make ends meet for a family of 5 with no frills on less than 200k. School teachers make 130k as do police officers due to cost of living.

 

[StuckinCT]

You could probably get to 100% success rate in FIREcalc with plenty left over if you moved to anywhere in flyover country. My entire annual budget for everything(*) for me and three late teen / young adult kids here part time is less than your property tax bill.

(*) except child support, which I don't count in this case.

So true, and we have thought about it. I think the schools and things like swimming programs narrow down the list to a few areas. Even a place like Austin TX, which is a really nice area, would be less expensive and no state income tax. Their real estate taxes are about 80% of ours, but they aren't being double and triple taxed like we are.

 

[StuckinCT]

Why would you want to stay in CT?

Schools, swimming, family and fear of unknown and change, not to mention that until recently the real estate market has been so bad I doubt I could even sell my house.

 

[Gumby]

Sarcasm at its finest, right??! Because I beg to differ....

Nope, quite serious. I am here by choice. I've lived in 14 states and visited 32 more, and I find Connecticut to be the best place to live. Yes, I know it is expensive, but the quality of life makes it worth the money. My retirement plans do not require moving somewhere cheaper.

I can appreciate that you may see it differently, particularly if you were born and raised here. The grass is always greener somewhere else, until you actually go there.

 

[Ready]

I used to have an office by the White Plains airport. I've spent a lot of time driving around Westchester County and still visit it once or twice a year. It's an amazing neighborhood. And very expensive, but I can understand the attraction to it. I had no idea the taxes were so high though.

 

[StuckinCT]

Nope, quite serious. I am here by choice. I've lived in 14 states and visited 32 more, and I find Connecticut to be the best place to live. Yes, I know it is expensive, but the quality of life makes it worth the money. My retirement plans do not require moving somewhere cheaper.

I can appreciate that you may see it differently, particularly if you were born and raised here. The grass is always greener somewhere else, until you actually go there.

I agree Gumby, quality of life still is good here in many ways. I hope we can turn things around and listen to what the laffer curve is telling us: higher taxes equals less revenue, not to mention everyone leaving the state.

It's funny, because I was not planning on posting on CT, but somehow the topic always comes up because people can't believe how expensive it is and I have to explain, that's just the cost of living here...

 

[Chuckanut]

I live on the fringe of the more expensive areas, in Westchester county I doubt you could make ends meet for a family of 5 with no frills on less than 200k. School teachers make 130k as do police officers due to cost of living.

Well, at least you folks pay these people enough to live where they work, or close to it. I live in an area where not only the lower-skilled people (servers, store clerks, cleaning crew, etc) can't afford to live, but also the more skilled professionals like policemen, teachers, and nurses can't afford to live.

One wonders what will happen when we run out of people willing to drive 15-30 miles one way in heavy traffic to make our caffè lattes?

 

[USGrant1962]

I am 45 and have been on the forum here and there over the last year or so and with this recent market rally, the firecalc is at 91%! This also assumes we maintain our current spending and no social security. I expect our spending to drop considerably when and if I can unload my high property tax house- $33k annually in CT.

The beauty of FIRECalc is that you can run the likely scenarios. So you can run cases with various assumptions: with SS (I assume I'll collect 75%); with your post-downsizing monthly spend; with Medicare instead of Obamacare at 65; with various spending levels over time (I cut spending ~15% at 75 and ~15% more at 85).

You've kind of run a worst case and it looks like you are in good shape, so exploring these parameters should add to your comfort level. Even just a couple of these likely improvements should easily kick you above 100%.

In my case if I zero out all of those kind of assumptions I'm at 92.5%, versus well above 100% in my base case with realistic assumptions.

 

[Tetto]

Nope, quite serious. I am here by choice. I've lived in 14 states and visited 32 more, and I find Connecticut to be the best place to live. Yes, I know it is expensive, but the quality of life makes it worth the money. My retirement plans do not require moving somewhere cheaper.

I can appreciate that you may see it differently, particularly if you were born and raised here. The grass is always greener somewhere else, until you actually go there.

I hear you, it is a very nice state from weather, proximity to Boston/NY etc but the Realestate taxes, fees and taxes in general make it a tough place to want to retire. Car registration and insurance, real estate taxes, gasoline costs per year alone and oil to heat house run me about $12,000 per year. Then there's everything else... I live in Eastern CT, the "poor" part of CT, don't know where you are, but we are as different out here from Fairfield Cty as one could get... almost forgotten in some ways.

 

[SecondCor521]

So true, and we have thought about it. I think the schools and things like swimming programs narrow down the list to a few areas. Even a place like Austin TX, which is a really nice area, would be less expensive and no state income tax. Their real estate taxes are about 80% of ours, but they aren't being double and triple taxed like we are.

I went to public schools here and was accepted at both Princeton and Stanford. My sister went to the same high school and was accepted to Stanford as well. No tricks - the famous Princeton and the famous Stanford.

A family friend went to the same school system and lived in the same town and she was an Olympic qualifying level swimmer. Another friend who also went to the same school system set several national level age group swimming records. Kid who lived across the street from me was a nationally ranked diver in high school.

Not all of the area here is like CT I'm sure, but the exclusive neighborhoods are probably similar but cost 1/4 of what you are paying. We do have country clubs and people who drive Porches here also. And if your kids are good at swimming or school, they can live in flyover country and still compete with the best in the nation and the world.

No disrespect to anyone or any other state, including you and CT. Just want to challenge your thinking a little more.

 

[StuckinCT]

The beauty of FIRECalc is that you can run the likely scenarios. So you can run cases with various assumptions: with SS (I assume I'll collect 75%); with your post-downsizing monthly spend; with Medicare instead of Obamacare at 65; with various spending levels over time (I cut spending ~15% at 75 and ~15% more at 85).

You've kind of run a worst case and it looks like you are in good shape, so exploring these parameters should add to your comfort level. Even just a couple of these likely improvements should easily kick you above 100%.

In my case if I zero out all of those kind of assumptions I'm at 92.5%, versus well above 100% in my base case with realistic assumptions.

I appreciate the tips on using the firecalc. I have played around with the SS input in the past but did not fine tune it to that degree. I have used other financial calculators cutting spending 5% every 20 years. The one thing though is that when you get old, healthcare costs may replace other costs and I also plan to travel a lot. They also may means test social security I am afraid- just gravy. Hard to model!

 

[StuckinCT]

I hear you, it is a very nice state from weather, proximity to Boston/NY etc but the Realestate taxes, fees and taxes in general make it a tough place to want to retire. Car registration and insurance, real estate taxes, gasoline costs per year alone and oil to heat house run me about $12,000 per year. Then there's everything else... I live in Eastern CT, the "poor" part of CT, don't know where you are, but we are as different out here from Fairfield Cty as one could get... almost forgotten in some ways.

So true. My favorite was the late penalty bill they just mailed out for failing to get an emissions test when they had suspended emissions requirements but now, they are just fulfilling their "legal" responsibility to collect it!

 

[StuckinCT]

I went to public schools here and was accepted at both Princeton and Stanford. My sister went to the same high school and was accepted to Stanford as well. No tricks - the famous Princeton and the famous Stanford.

A family friend went to the same school system and lived in the same town and she was an Olympic qualifying level swimmer. Another friend who also went to the same school system set several national level age group swimming records. Kid who lived across the street from me was a nationally ranked diver in high school.

Not all of the area here is like CT I'm sure, but the exclusive neighborhoods are probably similar but cost 1/4 of what you are paying. We do have country clubs and people who drive Porches here also. And if your kids are good at swimming or school, they can live in flyover country and still compete with the best in the nation and the world.

No disrespect to anyone or any other state, including you and CT. Just want to challenge your thinking a little more.

Good to know- did you grow up in Austin?

 

[pb4uski]

I think he was talking about Boise.

 

[SecondCor521]

Born in San Antonio, Texas, grew up in a small town near Boise. Went off to college, then moved back to Boise and have lived here ever since.

First two paragraphs were about the town I grew up in; third paragraph was about Boise proper.

Not every kid here is world class (obviously), but if you have a world class kid they can definitely make it onto that stage from Idaho if the parents guide them toward the proper resources (swim coaches/schools/classes/teachers).