Recently retired early in CA

[Route246]

Wow. I didn’t realize California state income tax was so high. 10%+ is steep!

Caps at 12.3 percent.

https://www.nerdwallet.com/article/taxes/california-state-tax

 

[Surewhitey]

Loved living there but 9.3% extra for that & other premium costs pushed us back to Texas eventually. We visit often though.

I always thought Prop 13 was regressive for newbies moving in. They're paying for the longer living home owners as I understand it.

 

[Diogenes]

I always thought Prop 13 was regressive for newbies moving in. They're paying for the longer living home owners as I understand it.

It's akin to fraternity hazing. Newcomers suffer, but veterans benefit, reveling in the travails of the callow. One supposes that if choosing to settle here, and buying here, than after 20 years, one becomes grateful, and well-positioned... housing monthly costs have stabilized (relative to inflation), while housing prices have burgeoning (benefitting one's net worth). This is a reasonable strategy for FIRE, assuming that one's portfolio is suitably structured. But if not... not.

 

[1242Vintage]

Welcome. Another native retired Californian here. Raised in S.F. and educated at San Jose State.

Settled up in the Sierras.

 

[equakesfan]

Welcome to retirement and the forum, equakesfan!

The last time DH and I went to an Earthquakes game at PayPal Park was a couple years ago. It was frustrating because they played so poorly. Nowadays we mostly watch English Premier League.

You should go again. They won two trophies this year. (OK one was the wooden spoon for the worst team in the league). Excited for the Bruce Arena era to begin, but not excited enough to buy season tickets

 

[equakesfan]

Loved living there but 9.3% extra for that & other premium costs pushed us back to Texas eventually. We visit often though.

I always thought Prop 13 was regressive for newbies moving in. They're paying for the longer living home owners as I understand it.

When my neighbor passed away she was paying about $1000/ year in property taxes while we were paying $10k/year and the new neighbors are paying about $22k/year. Of course she didn't have kids in the schools since the 60s and the new neighbors and us have kids in schools now. Someday we will be in her shoes (paying nothing in property taxes but not using the services much)

 

[equakesfan]

It's akin to fraternity hazing. Newcomers suffer, but veterans benefit, reveling in the travails of the callow. One supposes that if choosing to settle here, and buying here, than after 20 years, one becomes grateful, and well-positioned... housing monthly costs have stabilized (relative to inflation), while housing prices have burgeoning (benefitting one's net worth). This is a reasonable strategy for FIRE, assuming that one's portfolio is suitably structured. But if not... not.

My wife bought our house in 99 and it has increased 4x in value in 25 years and the property tax has about doubled (partly due to me buying her sister out). In my projections, I have real estate growing at the inflation rate in the future, but I think I am being too optimistic after the growth we've had in the last 25 years.

What's really killing us (Californians) is the commercial properties. There are lots of commercial properties that haven't changed hands (and probably never will) that are still paying property taxes based on the 70s property value and charging rents in the current market.

 

[tmitchell]

Welcome & congrats! I also left my career at 54. Curious to know how your emotional journey has been thus far and how you're thinking about spending your time as you go.

 

[equakesfan]

Welcome & congrats! I also left my career at 54. Curious to know how your emotional journey has been thus far and how you're thinking about spending your time as you go.

I have a long to do list with some big tasks on it (i.e. paint the house, landscape the front and back yard). I still have kids in school so I have some volunteer work to do. So I have been pretty busy.

I am still in the honeymoon phase of retirement so emotionally I am quite happy. I'll see how I am doing when the honey do list is done (or almost done) and the kids have gone to college. When I left my job I gave plenty of notice and offered to work part-time. If I get bored or need more structure in my life I might go back to work.

 

[EastWest Gal]

Loved living there but 9.3% extra for that & other premium costs pushed us back to Texas eventually. We visit often though.

I always thought Prop 13 was regressive for newbies moving in. They're paying for the longer living home owners as I understand it.

Actually, Prop 13 most benefitted big businesses, whose ownership never changes. I did a report on the effects to cites and school districts when I was in college in 1978.

 

[anothercog]

It's highly "progressive" and punitive towards the unmarried. But it excludes Social Security and possibly other pensions. So, for a 65+ married couple with pension income, the taxes are moderate - maybe even below average. For a younger single retire with a large taxable portfolio - say a Silicon Valley tech-bro who cashed out $50M and put it all into the S&P 500 - the taxes are really really going to bite.

My in-laws are retired in California and barely pay anything in taxes. Thanks to Prop 13 and VA disability, their property taxes on a $500k house are $100/year. Most of their 100k+ income is tax exempt (SS plus VA disability) so they are paying maybe $2k/year in income taxes.

Unfortunately mine will be substantially higher when I retire. Only my SS will be tax exempt from CA income taxes. Prop 13 is nice but as one poster mentioned, it's still quite high as I started from a high base even though I'm paying less than half of what new buyers would pay.

Still, not sure where I would move to if I leave California. The weather pretty much anywhere else does not appeal to me.

 

[ElizabethT]

Welcome OP from another Californian- Coastal S. CA here.

Our situation was not to far off from yours, and we’re now 12 glorious years in.

Currently we’re sitting at the ocean in short sleeves, after an 8 mile walk. We could never fully enjoy Sunday fun during our w#+king years, but man do we enjoy them now.

Tomorrow, Monday, I’ll be kayaking all day, instead of commuting. Tuesday we play Bridge then go to gym, Wednesdays we hike, Thursdays we bicycle 25-40 miles, depending, Fridays we do long urban coastal hikes plus lunch.

Never ever bored. Tired sometimes, but never bored.

 

[rodi]

My wife bought our house in 99 and it has increased 4x in value in 25 years and the property tax has about doubled (partly due to me buying her sister out). In my projections, I have real estate growing at the inflation rate in the future, but I think I am being too optimistic after the growth we've had in the last 25 years.

What's really killing us (Californians) is the commercial properties. There are lots of commercial properties that haven't changed hands (and probably never will) that are still paying property taxes based on the 70s property value and charging rents in the current market.

I've seen some interesting transactions where property is held by an LLC... and 49% ownership can change without triggering a reassessment. This seems to happen with strip malls etc. where partnerships own the real estate...

 

[equakesfan]

Welcome OP from another Californian- Coastal S. CA here.

Our situation was not to far off from yours, and we’re now 12 glorious years in.

Currently we’re sitting at the ocean in short sleeves, after an 8 mile walk. We could never fully enjoy Sunday fun during our w#+king years, but man do we enjoy them now.

Tomorrow, Monday, I’ll be kayaking all day, instead of commuting. Tuesday we play Bridge then go to gym, Wednesdays we hike, Thursdays we bicycle 25-40 miles, depending, Fridays we do long urban coastal hikes plus lunch.

Never ever bored. Tired sometimes, but never bored.

Our youngest just started middle school so I've got some time before we can have as much fun as you are but in about 6.5 years we'll be done and can really start enjoying life.