OT: Retire in CA?

[ice9]

Please poke holes in this hypothetical scenario:

Age: 39
Martial Status: Married
Number Children: 1 (< 1 year old) Savings: 375K 401K, 650K stocks, 50K cash, 100K home equity Goal: Find a place to semi-retire with nice weather (i.e., no extremes and lots of sunshine), low state and property tax, outdoors close by, and safe. I've never lived in California, but I think it might be the best place for the following reasons: * property tax rate is very low and will stay low (I know this offset somewhat by higher house prices) * weather on coast is best in the country, and inland is not bad (I don't mind some heat... really dislike cold winters though). * if my income is mostly dividends, I'll pay no federal tax. State tax isn't too bad, as my income will not be high. Are there any towns you can suggest that would fit what I'm looking for? Jobs don't matter, as if I did any work it would be done remotely.

[bearishgurl]

ice9, you are young enough that it is very likely that “CA’s Proposition 13” (which protects CA parcels from being assessed at more than 2% over the previous tax year) may very well be repealed in full or piecemeal by the time you are ready to “semi-retire” or retire.

The major voting demographic that derives the most benefit from Prop 13 are aging and dying off. These are purchasers prior to April 1978 who still own the same parcels today (and/or their direct descendants/heirs).

There is even less public support for Prop 13’s more recent “progeny,” Proposition 58, which in part provides that these same owners’ property tax basis be transferred to their children or grandchildren by filing any form of familial transfer deed in their favor, either before or upon death. These (very often younger, able-bodied and high-earning) heirs/descendants are enjoying an artificially-low property tax rate that that would not otherwise be available to them had they acquired the same property by means other than a familial transfer deed or “quitclaim deed” from a parent/grandparent.

If you are counting on low property taxes in CA to help provide you a reasonable cost of living in retirement in 2030 and beyond, I feel you may end up having to rethink this current “perk.” The present state of CA’s current finances are VERY precarious at present, verging on bankruptcy. I have no doubt our Legislature will eventually seek and find every way to keep the state’s dwindling coffers funded.

[bearishgurl]

ice9, you are young enough that it is very likely that “CA’s Proposition 13” (which protects CA parcels from being assessed at more than 2% over the previous tax year) may very well be repealed in full or piecemeal by the time you are ready to “semi-retire” or retire.

The major voting demographic that derives the most benefit from Prop 13 are aging and dying off. These are purchasers prior to April 1978 who still own the same parcels today (and/or their direct descendants/heirs).

There is even less public support for Prop 13’s more recent “progeny,” Proposition 58, which in part provides that these same owners’ property tax basis be transferred to their children or grandchildren by filing any form of familial transfer deed in their favor, either before or upon death. These (very often younger, able-bodied and high-earning) heirs/descendants are enjoying an artificially-low property tax rate that that would not otherwise be available to them had they acquired the same property by means other than a familial transfer deed or “quitclaim deed” from a parent/grandparent.

If you are counting on low property taxes in CA to help provide you a reasonable cost of living in retirement in 2030 and beyond, I feel you may end up having to rethink this current “perk.” The present state of CA’s current finances are VERY precarious at present, verging on bankruptcy. I have no doubt our Legislature will eventually seek and find every way to keep the state’s dwindling coffers funded.

[bearishgurl]

ice9, you are young enough that it is very likely that “CA’s Proposition 13” (which protects CA parcels from being assessed at more than 2% over the previous tax year) may very well be repealed in full or piecemeal by the time you are ready to “semi-retire” or retire.

The major voting demographic that derives the most benefit from Prop 13 are aging and dying off. These are purchasers prior to April 1978 who still own the same parcels today (and/or their direct descendants/heirs).

There is even less public support for Prop 13’s more recent “progeny,” Proposition 58, which in part provides that these same owners’ property tax basis be transferred to their children or grandchildren by filing any form of familial transfer deed in their favor, either before or upon death. These (very often younger, able-bodied and high-earning) heirs/descendants are enjoying an artificially-low property tax rate that that would not otherwise be available to them had they acquired the same property by means other than a familial transfer deed or “quitclaim deed” from a parent/grandparent.

If you are counting on low property taxes in CA to help provide you a reasonable cost of living in retirement in 2030 and beyond, I feel you may end up having to rethink this current “perk.” The present state of CA’s current finances are VERY precarious at present, verging on bankruptcy. I have no doubt our Legislature will eventually seek and find every way to keep the state’s dwindling coffers funded.

[bearishgurl]

ice9, you are young enough that it is very likely that “CA’s Proposition 13” (which protects CA parcels from being assessed at more than 2% over the previous tax year) may very well be repealed in full or piecemeal by the time you are ready to “semi-retire” or retire.

The major voting demographic that derives the most benefit from Prop 13 are aging and dying off. These are purchasers prior to April 1978 who still own the same parcels today (and/or their direct descendants/heirs).

There is even less public support for Prop 13’s more recent “progeny,” Proposition 58, which in part provides that these same owners’ property tax basis be transferred to their children or grandchildren by filing any form of familial transfer deed in their favor, either before or upon death. These (very often younger, able-bodied and high-earning) heirs/descendants are enjoying an artificially-low property tax rate that that would not otherwise be available to them had they acquired the same property by means other than a familial transfer deed or “quitclaim deed” from a parent/grandparent.

If you are counting on low property taxes in CA to help provide you a reasonable cost of living in retirement in 2030 and beyond, I feel you may end up having to rethink this current “perk.” The present state of CA’s current finances are VERY precarious at present, verging on bankruptcy. I have no doubt our Legislature will eventually seek and find every way to keep the state’s dwindling coffers funded.

[bearishgurl]

ice9, you are young enough that it is very likely that “CA’s Proposition 13” (which protects CA parcels from being assessed at more than 2% over the previous tax year) may very well be repealed in full or piecemeal by the time you are ready to “semi-retire” or retire.

The major voting demographic that derives the most benefit from Prop 13 are aging and dying off. These are purchasers prior to April 1978 who still own the same parcels today (and/or their direct descendants/heirs).

There is even less public support for Prop 13’s more recent “progeny,” Proposition 58, which in part provides that these same owners’ property tax basis be transferred to their children or grandchildren by filing any form of familial transfer deed in their favor, either before or upon death. These (very often younger, able-bodied and high-earning) heirs/descendants are enjoying an artificially-low property tax rate that that would not otherwise be available to them had they acquired the same property by means other than a familial transfer deed or “quitclaim deed” from a parent/grandparent.

If you are counting on low property taxes in CA to help provide you a reasonable cost of living in retirement in 2030 and beyond, I feel you may end up having to rethink this current “perk.” The present state of CA’s current finances are VERY precarious at present, verging on bankruptcy. I have no doubt our Legislature will eventually seek and find every way to keep the state’s dwindling coffers funded.

[Coronita]

[quote]
Savings: 375K 401K, 650K stocks, 50K cash, 100K home equity
[/quote]

With all due respect, I think CA is quite expensive and with the numbers you provided, I don’t think you could retire in CA at 39 and live “comfortably”

First off, you cant liquidate your 401k without a penalty until you are 65.

Second, 650k in stock, I’m assuming you would have to pay taxes on gain. So it’s not really 650k, not to mention that if you relocate to CA, you would be paying extra taxes on that.

Third, 100k equity…Unless you plan on selling or unless you can cash flow, you won’t be able to touch this either.

Fourth: 50k cash isn’t nearly enough of a cash reserve if you are going to be “retired”.

[quote]
* if my income is mostly dividends, I’ll pay no federal tax. State tax isn’t too bad, as my income will not be high.
[/quote]

Um… That isn’t true…Either that, or you have a very creative accountant.

[quote]
Number Children: 1 (< 1 year old) [/quote] Do you have any idea how much it's going to cost you to raise your child from 1 year to sending him/her to college? Sorry, but the numbers don't seem to add up here in CA especially because (a) your age (b) the age of your family (just starting out) (c) your home expenses (you don't own your home outright and you will either have to rent or buy in CA). (d) your medical expenses moving forward with you + spouse + kid Perhaps, the question you should ask folks here is how much you think you need to have to retire in CA at 39, married, with one kid...

[Coronita]

[quote]
Savings: 375K 401K, 650K stocks, 50K cash, 100K home equity
[/quote]

With all due respect, I think CA is quite expensive and with the numbers you provided, I don’t think you could retire in CA at 39 and live “comfortably”

First off, you cant liquidate your 401k without a penalty until you are 65.

Second, 650k in stock, I’m assuming you would have to pay taxes on gain. So it’s not really 650k, not to mention that if you relocate to CA, you would be paying extra taxes on that.

Third, 100k equity…Unless you plan on selling or unless you can cash flow, you won’t be able to touch this either.

Fourth: 50k cash isn’t nearly enough of a cash reserve if you are going to be “retired”.

[quote]
* if my income is mostly dividends, I’ll pay no federal tax. State tax isn’t too bad, as my income will not be high.
[/quote]

Um… That isn’t true…Either that, or you have a very creative accountant.

[quote]
Number Children: 1 (< 1 year old) [/quote] Do you have any idea how much it's going to cost you to raise your child from 1 year to sending him/her to college? Sorry, but the numbers don't seem to add up here in CA especially because (a) your age (b) the age of your family (just starting out) (c) your home expenses (you don't own your home outright and you will either have to rent or buy in CA). (d) your medical expenses moving forward with you + spouse + kid Perhaps, the question you should ask folks here is how much you think you need to have to retire in CA at 39, married, with one kid...

[Coronita]

[quote]
Savings: 375K 401K, 650K stocks, 50K cash, 100K home equity
[/quote]

With all due respect, I think CA is quite expensive and with the numbers you provided, I don’t think you could retire in CA at 39 and live “comfortably”

First off, you cant liquidate your 401k without a penalty until you are 65.

Second, 650k in stock, I’m assuming you would have to pay taxes on gain. So it’s not really 650k, not to mention that if you relocate to CA, you would be paying extra taxes on that.

Third, 100k equity…Unless you plan on selling or unless you can cash flow, you won’t be able to touch this either.

Fourth: 50k cash isn’t nearly enough of a cash reserve if you are going to be “retired”.

[quote]
* if my income is mostly dividends, I’ll pay no federal tax. State tax isn’t too bad, as my income will not be high.
[/quote]

Um… That isn’t true…Either that, or you have a very creative accountant.

[quote]
Number Children: 1 (< 1 year old) [/quote] Do you have any idea how much it's going to cost you to raise your child from 1 year to sending him/her to college? Sorry, but the numbers don't seem to add up here in CA especially because (a) your age (b) the age of your family (just starting out) (c) your home expenses (you don't own your home outright and you will either have to rent or buy in CA). (d) your medical expenses moving forward with you + spouse + kid Perhaps, the question you should ask folks here is how much you think you need to have to retire in CA at 39, married, with one kid...

[Coronita]

[quote]
Savings: 375K 401K, 650K stocks, 50K cash, 100K home equity
[/quote]

With all due respect, I think CA is quite expensive and with the numbers you provided, I don’t think you could retire in CA at 39 and live “comfortably”

First off, you cant liquidate your 401k without a penalty until you are 65.

Second, 650k in stock, I’m assuming you would have to pay taxes on gain. So it’s not really 650k, not to mention that if you relocate to CA, you would be paying extra taxes on that.

Third, 100k equity…Unless you plan on selling or unless you can cash flow, you won’t be able to touch this either.

Fourth: 50k cash isn’t nearly enough of a cash reserve if you are going to be “retired”.

[quote]
* if my income is mostly dividends, I’ll pay no federal tax. State tax isn’t too bad, as my income will not be high.
[/quote]

Um… That isn’t true…Either that, or you have a very creative accountant.

[quote]
Number Children: 1 (< 1 year old) [/quote] Do you have any idea how much it's going to cost you to raise your child from 1 year to sending him/her to college? Sorry, but the numbers don't seem to add up here in CA especially because (a) your age (b) the age of your family (just starting out) (c) your home expenses (you don't own your home outright and you will either have to rent or buy in CA). (d) your medical expenses moving forward with you + spouse + kid Perhaps, the question you should ask folks here is how much you think you need to have to retire in CA at 39, married, with one kid...

[Coronita]

[quote]
Savings: 375K 401K, 650K stocks, 50K cash, 100K home equity
[/quote]

With all due respect, I think CA is quite expensive and with the numbers you provided, I don’t think you could retire in CA at 39 and live “comfortably”

First off, you cant liquidate your 401k without a penalty until you are 65.

Second, 650k in stock, I’m assuming you would have to pay taxes on gain. So it’s not really 650k, not to mention that if you relocate to CA, you would be paying extra taxes on that.

Third, 100k equity…Unless you plan on selling or unless you can cash flow, you won’t be able to touch this either.

Fourth: 50k cash isn’t nearly enough of a cash reserve if you are going to be “retired”.

[quote]
* if my income is mostly dividends, I’ll pay no federal tax. State tax isn’t too bad, as my income will not be high.
[/quote]

Um… That isn’t true…Either that, or you have a very creative accountant.

[quote]
Number Children: 1 (< 1 year old) [/quote] Do you have any idea how much it's going to cost you to raise your child from 1 year to sending him/her to college? Sorry, but the numbers don't seem to add up here in CA especially because (a) your age (b) the age of your family (just starting out) (c) your home expenses (you don't own your home outright and you will either have to rent or buy in CA). (d) your medical expenses moving forward with you + spouse + kid Perhaps, the question you should ask folks here is how much you think you need to have to retire in CA at 39, married, with one kid...

[ice9]

[quote]
First off, you cant liquidate your 401k without a penalty until you are 65.
[/quote]

Indeed, I wouldn’t plan on taking anything out of the 401K with a penalty.

[quote]
Second, 650k in stock, I’m assuming you would have to pay taxes on gain. So it’s not really 650k, not to mention that if you relocate to CA, you would be paying extra taxes on that.
[/quote]

This is true (well kinda, I have lots of losses to offset future gains), but assuming the current tax rates on capital gains are permanent, the tax rate is 5% for the lowest two income brackets (which the gains would fall under for me).

[quote]
Third, 100k equity…Unless you plan on selling or unless you can cash flow, you won’t be able to touch this either.
[/quote]

I would be selling, and probably downsizing to a house so I wouldn’t need 100K for a 20% down. But true, a good chunk of that would be deployed into a down payment on a new home.

[quote]
Fourth: 50k cash isn’t nearly enough of a cash reserve if you are going to be “retired”.
[/quote]

I generally don’t like much in cash, since it’s not earning anything.

[quote]
[quote]
* if my income is mostly dividends, I’ll pay no federal tax. State tax isn’t too bad, as my income will not be high.
[/quote]

Um… That isn’t true…Either that, or you have a very creative accountant.
[/quote]

Qualified dividends are taxed at 0% in the lowest two tax brackets.

http://en.wikipedia.org/wiki/Dividend_tax

[quote]
[quote]
Number Children: 1 (< 1 year old) [/quote] Do you have any idea how much it's going to cost you to raise your child from 1 year to sending him/her to college? Sorry, but the numbers don't seem to add up here in CA especially because (a) your age (b) the age of your family (just starting out) (c) your home expenses (you don't own your home outright and you will either have to rent or buy in CA). (d) your medical expenses moving forward with you + spouse + kid Perhaps, the question you should ask folks here is how much you think you need to have to retire in CA at 39, married, with one kid...[/quote] Fair enough... so how much?

[ice9]

[quote]
First off, you cant liquidate your 401k without a penalty until you are 65.
[/quote]

Indeed, I wouldn’t plan on taking anything out of the 401K with a penalty.

[quote]
Second, 650k in stock, I’m assuming you would have to pay taxes on gain. So it’s not really 650k, not to mention that if you relocate to CA, you would be paying extra taxes on that.
[/quote]

This is true (well kinda, I have lots of losses to offset future gains), but assuming the current tax rates on capital gains are permanent, the tax rate is 5% for the lowest two income brackets (which the gains would fall under for me).

[quote]
Third, 100k equity…Unless you plan on selling or unless you can cash flow, you won’t be able to touch this either.
[/quote]

I would be selling, and probably downsizing to a house so I wouldn’t need 100K for a 20% down. But true, a good chunk of that would be deployed into a down payment on a new home.

[quote]
Fourth: 50k cash isn’t nearly enough of a cash reserve if you are going to be “retired”.
[/quote]

I generally don’t like much in cash, since it’s not earning anything.

[quote]
[quote]
* if my income is mostly dividends, I’ll pay no federal tax. State tax isn’t too bad, as my income will not be high.
[/quote]

Um… That isn’t true…Either that, or you have a very creative accountant.
[/quote]

Qualified dividends are taxed at 0% in the lowest two tax brackets.

http://en.wikipedia.org/wiki/Dividend_tax

[quote]
[quote]
Number Children: 1 (< 1 year old) [/quote] Do you have any idea how much it's going to cost you to raise your child from 1 year to sending him/her to college? Sorry, but the numbers don't seem to add up here in CA especially because (a) your age (b) the age of your family (just starting out) (c) your home expenses (you don't own your home outright and you will either have to rent or buy in CA). (d) your medical expenses moving forward with you + spouse + kid Perhaps, the question you should ask folks here is how much you think you need to have to retire in CA at 39, married, with one kid...[/quote] Fair enough... so how much?

[ice9]

[quote]
First off, you cant liquidate your 401k without a penalty until you are 65.
[/quote]

Indeed, I wouldn’t plan on taking anything out of the 401K with a penalty.

[quote]
Second, 650k in stock, I’m assuming you would have to pay taxes on gain. So it’s not really 650k, not to mention that if you relocate to CA, you would be paying extra taxes on that.
[/quote]

This is true (well kinda, I have lots of losses to offset future gains), but assuming the current tax rates on capital gains are permanent, the tax rate is 5% for the lowest two income brackets (which the gains would fall under for me).

[quote]
Third, 100k equity…Unless you plan on selling or unless you can cash flow, you won’t be able to touch this either.
[/quote]

I would be selling, and probably downsizing to a house so I wouldn’t need 100K for a 20% down. But true, a good chunk of that would be deployed into a down payment on a new home.

[quote]
Fourth: 50k cash isn’t nearly enough of a cash reserve if you are going to be “retired”.
[/quote]

I generally don’t like much in cash, since it’s not earning anything.

[quote]
[quote]
* if my income is mostly dividends, I’ll pay no federal tax. State tax isn’t too bad, as my income will not be high.
[/quote]

Um… That isn’t true…Either that, or you have a very creative accountant.
[/quote]

Qualified dividends are taxed at 0% in the lowest two tax brackets.

http://en.wikipedia.org/wiki/Dividend_tax

[quote]
[quote]
Number Children: 1 (< 1 year old) [/quote] Do you have any idea how much it's going to cost you to raise your child from 1 year to sending him/her to college? Sorry, but the numbers don't seem to add up here in CA especially because (a) your age (b) the age of your family (just starting out) (c) your home expenses (you don't own your home outright and you will either have to rent or buy in CA). (d) your medical expenses moving forward with you + spouse + kid Perhaps, the question you should ask folks here is how much you think you need to have to retire in CA at 39, married, with one kid...[/quote] Fair enough... so how much?

[ice9]

[quote]
First off, you cant liquidate your 401k without a penalty until you are 65.
[/quote]

Indeed, I wouldn’t plan on taking anything out of the 401K with a penalty.

[quote]
Second, 650k in stock, I’m assuming you would have to pay taxes on gain. So it’s not really 650k, not to mention that if you relocate to CA, you would be paying extra taxes on that.
[/quote]

This is true (well kinda, I have lots of losses to offset future gains), but assuming the current tax rates on capital gains are permanent, the tax rate is 5% for the lowest two income brackets (which the gains would fall under for me).

[quote]
Third, 100k equity…Unless you plan on selling or unless you can cash flow, you won’t be able to touch this either.
[/quote]

I would be selling, and probably downsizing to a house so I wouldn’t need 100K for a 20% down. But true, a good chunk of that would be deployed into a down payment on a new home.

[quote]
Fourth: 50k cash isn’t nearly enough of a cash reserve if you are going to be “retired”.
[/quote]

I generally don’t like much in cash, since it’s not earning anything.

[quote]
[quote]
* if my income is mostly dividends, I’ll pay no federal tax. State tax isn’t too bad, as my income will not be high.
[/quote]

Um… That isn’t true…Either that, or you have a very creative accountant.
[/quote]

Qualified dividends are taxed at 0% in the lowest two tax brackets.

http://en.wikipedia.org/wiki/Dividend_tax

[quote]
[quote]
Number Children: 1 (< 1 year old) [/quote] Do you have any idea how much it's going to cost you to raise your child from 1 year to sending him/her to college? Sorry, but the numbers don't seem to add up here in CA especially because (a) your age (b) the age of your family (just starting out) (c) your home expenses (you don't own your home outright and you will either have to rent or buy in CA). (d) your medical expenses moving forward with you + spouse + kid Perhaps, the question you should ask folks here is how much you think you need to have to retire in CA at 39, married, with one kid...[/quote] Fair enough... so how much?

[Author]

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