OT: Retire in CA?

[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=bearishgurl]
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.[/quote]

Thanks for your point of view on this. I’ve read thoughts on both sides of this, but I agree with you that something will have to give to solve the financial problems in the state. Maybe it will be prop 13.

[ice9]

[quote=bearishgurl]
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.[/quote]

Thanks for your point of view on this. I’ve read thoughts on both sides of this, but I agree with you that something will have to give to solve the financial problems in the state. Maybe it will be prop 13.

[ice9]

[quote=bearishgurl]
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.[/quote]

Thanks for your point of view on this. I’ve read thoughts on both sides of this, but I agree with you that something will have to give to solve the financial problems in the state. Maybe it will be prop 13.

[ice9]

[quote=bearishgurl]
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.[/quote]

Thanks for your point of view on this. I’ve read thoughts on both sides of this, but I agree with you that something will have to give to solve the financial problems in the state. Maybe it will be prop 13.

[ice9]

[quote=bearishgurl]
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.[/quote]

Thanks for your point of view on this. I’ve read thoughts on both sides of this, but I agree with you that something will have to give to solve the financial problems in the state. Maybe it will be prop 13.

[Coronita]

[quote=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?[/quote] Pardon if I don't understand your numbers, and frankly you don't need to share. But I don't understand how you could be in the lowest two income brackets and considering to retire in california at 39 with a family. Also , I don't follow you you say you have $100k in equity and you plan on downsizing to a house in CA. So either your numbers are off, or your net worth is more than you are indicating (which again is none of anyone's business here)... In any rate, I'd say if you have about $1million that could be liquid (in whatever assets), you probably be able to live comfortably (not lavishly) with a partial income in most non-high cost areas. The key is you aren't willing to liquidate your 401k so that will be tied up. But that's my personal opinion. The thing is with the 1 year old kid, those expenses are going to be significant to say the least. If it were just you or just you and spouse, that would be a different story. It's just that you don't know what sort of additional expenses are going to creep up in the future..Heaven's forbid if your kid needs some special medical treatments or your spouse (I hope not). That said, you're in good financial shape relative to most other peers in America. Imho, the sunshine is overrated BTW :). It's raining right now in San Diego 🙂

[Coronita]

[quote=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?[/quote] Pardon if I don't understand your numbers, and frankly you don't need to share. But I don't understand how you could be in the lowest two income brackets and considering to retire in california at 39 with a family. Also , I don't follow you you say you have $100k in equity and you plan on downsizing to a house in CA. So either your numbers are off, or your net worth is more than you are indicating (which again is none of anyone's business here)... In any rate, I'd say if you have about $1million that could be liquid (in whatever assets), you probably be able to live comfortably (not lavishly) with a partial income in most non-high cost areas. The key is you aren't willing to liquidate your 401k so that will be tied up. But that's my personal opinion. The thing is with the 1 year old kid, those expenses are going to be significant to say the least. If it were just you or just you and spouse, that would be a different story. It's just that you don't know what sort of additional expenses are going to creep up in the future..Heaven's forbid if your kid needs some special medical treatments or your spouse (I hope not). That said, you're in good financial shape relative to most other peers in America. Imho, the sunshine is overrated BTW :). It's raining right now in San Diego 🙂

[Coronita]

[quote=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?[/quote] Pardon if I don't understand your numbers, and frankly you don't need to share. But I don't understand how you could be in the lowest two income brackets and considering to retire in california at 39 with a family. Also , I don't follow you you say you have $100k in equity and you plan on downsizing to a house in CA. So either your numbers are off, or your net worth is more than you are indicating (which again is none of anyone's business here)... In any rate, I'd say if you have about $1million that could be liquid (in whatever assets), you probably be able to live comfortably (not lavishly) with a partial income in most non-high cost areas. The key is you aren't willing to liquidate your 401k so that will be tied up. But that's my personal opinion. The thing is with the 1 year old kid, those expenses are going to be significant to say the least. If it were just you or just you and spouse, that would be a different story. It's just that you don't know what sort of additional expenses are going to creep up in the future..Heaven's forbid if your kid needs some special medical treatments or your spouse (I hope not). That said, you're in good financial shape relative to most other peers in America. Imho, the sunshine is overrated BTW :). It's raining right now in San Diego 🙂

[Coronita]

[quote=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?[/quote] Pardon if I don't understand your numbers, and frankly you don't need to share. But I don't understand how you could be in the lowest two income brackets and considering to retire in california at 39 with a family. Also , I don't follow you you say you have $100k in equity and you plan on downsizing to a house in CA. So either your numbers are off, or your net worth is more than you are indicating (which again is none of anyone's business here)... In any rate, I'd say if you have about $1million that could be liquid (in whatever assets), you probably be able to live comfortably (not lavishly) with a partial income in most non-high cost areas. The key is you aren't willing to liquidate your 401k so that will be tied up. But that's my personal opinion. The thing is with the 1 year old kid, those expenses are going to be significant to say the least. If it were just you or just you and spouse, that would be a different story. It's just that you don't know what sort of additional expenses are going to creep up in the future..Heaven's forbid if your kid needs some special medical treatments or your spouse (I hope not). That said, you're in good financial shape relative to most other peers in America. Imho, the sunshine is overrated BTW :). It's raining right now in San Diego 🙂

[Coronita]

[quote=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?[/quote] Pardon if I don't understand your numbers, and frankly you don't need to share. But I don't understand how you could be in the lowest two income brackets and considering to retire in california at 39 with a family. Also , I don't follow you you say you have $100k in equity and you plan on downsizing to a house in CA. So either your numbers are off, or your net worth is more than you are indicating (which again is none of anyone's business here)... In any rate, I'd say if you have about $1million that could be liquid (in whatever assets), you probably be able to live comfortably (not lavishly) with a partial income in most non-high cost areas. The key is you aren't willing to liquidate your 401k so that will be tied up. But that's my personal opinion. The thing is with the 1 year old kid, those expenses are going to be significant to say the least. If it were just you or just you and spouse, that would be a different story. It's just that you don't know what sort of additional expenses are going to creep up in the future..Heaven's forbid if your kid needs some special medical treatments or your spouse (I hope not). That said, you're in good financial shape relative to most other peers in America. Imho, the sunshine is overrated BTW :). It's raining right now in San Diego 🙂

[ice9]

[quote=flu]
Pardon if I don’t understand your numbers, and frankly you don’t need to share. But I don’t understand how you could be in the lowest two income brackets and considering to retire in california at 39 with a family. Also , I don’t follow you you say you have $100k in equity and you plan on downsizing to a house in CA. So either your numbers are off, or your net worth is more than you are indicating (which again is none of anyone’s business here)…
[/quote]

The lowest two federal tax brackets for married (filing jointly) are for income under $67,900. I think the standard deduction for married filing jointing is around 10K. I wouldn’t expect my income to be higher than ~80K if I were retired or semi-retired.

Regarding the house, my point is that I could sell my home today and have 100K from the sale. I could then buy a house in CA with 20% down using less than 100K (if the house is less than 500K of course). The cheaper the house, the more left over.

[ice9]

[quote=flu]
Pardon if I don’t understand your numbers, and frankly you don’t need to share. But I don’t understand how you could be in the lowest two income brackets and considering to retire in california at 39 with a family. Also , I don’t follow you you say you have $100k in equity and you plan on downsizing to a house in CA. So either your numbers are off, or your net worth is more than you are indicating (which again is none of anyone’s business here)…
[/quote]

The lowest two federal tax brackets for married (filing jointly) are for income under $67,900. I think the standard deduction for married filing jointing is around 10K. I wouldn’t expect my income to be higher than ~80K if I were retired or semi-retired.

Regarding the house, my point is that I could sell my home today and have 100K from the sale. I could then buy a house in CA with 20% down using less than 100K (if the house is less than 500K of course). The cheaper the house, the more left over.

[ice9]

[quote=flu]
Pardon if I don’t understand your numbers, and frankly you don’t need to share. But I don’t understand how you could be in the lowest two income brackets and considering to retire in california at 39 with a family. Also , I don’t follow you you say you have $100k in equity and you plan on downsizing to a house in CA. So either your numbers are off, or your net worth is more than you are indicating (which again is none of anyone’s business here)…
[/quote]

The lowest two federal tax brackets for married (filing jointly) are for income under $67,900. I think the standard deduction for married filing jointing is around 10K. I wouldn’t expect my income to be higher than ~80K if I were retired or semi-retired.

Regarding the house, my point is that I could sell my home today and have 100K from the sale. I could then buy a house in CA with 20% down using less than 100K (if the house is less than 500K of course). The cheaper the house, the more left over.

[ice9]

[quote=flu]
Pardon if I don’t understand your numbers, and frankly you don’t need to share. But I don’t understand how you could be in the lowest two income brackets and considering to retire in california at 39 with a family. Also , I don’t follow you you say you have $100k in equity and you plan on downsizing to a house in CA. So either your numbers are off, or your net worth is more than you are indicating (which again is none of anyone’s business here)…
[/quote]

The lowest two federal tax brackets for married (filing jointly) are for income under $67,900. I think the standard deduction for married filing jointing is around 10K. I wouldn’t expect my income to be higher than ~80K if I were retired or semi-retired.

Regarding the house, my point is that I could sell my home today and have 100K from the sale. I could then buy a house in CA with 20% down using less than 100K (if the house is less than 500K of course). The cheaper the house, the more left over.

[Author]

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