specific f/u (follow-up) on the retirement thread

[jimcav]

Hello all,
I was reading the retirement thread with great interest, as I am eligible to retire from the navy in 2016, not that far away. However, I am doubting it will happen. I have googled, but does anyone know a good calculator to determine if you CAN live off a given savings, investments, retirement pension, etc in a given area? For example, I was looking at the CNN money top 100 cities to live in, and honestly most of them I don't want to retire to. However, I think it would be a mistake to only consider places I've been with the navy, where i came from, etc. For example, Walnut CA has good schoools, realtor.com shows 1500+sq ft homes are there for under 400k (no idea if they are nice areas).
My boys are young, they will be 9 and 12 IF i retire in 4 years, schools are key, and I of course can work, but am curious: for those who have or are about to retire, how much research and travel you did to determine WHERE to retire ?
thanks
jim

[eddief]

what's up with that?

[Louis]

what's up with that?

I think f/u stands for "follow up."

[54ny77]

i think he means follow up. :beer: ;)

good question though.

here's one: https://www.fidelity.com/retirement/calculators/retirement-calculators

[eddief]

apologize for my over optimism.

I think f/u stands for "follow up."

[friessco]

T Rowe Price has an excellent calculator.

[eddief]

it is ususally way more complicated than what an online calculator can do for you. i shop at Charles Schwab and he actually has a fairly detailed online calculator. He also provides basic in person consults with certified fi planners. i like where i live a lot here in the Bay Area. given a choice, i'd try to rent a room in Ken Robb's house and enjoy the eternal summer of SoSo Cal.

Hello all,
I was reading the retirement thread with great interest, as I am eligible to retire from the navy in 2016, not that far away. However, I am doubting it will happen. I have googled, but does anyone know a good calculator to determine if you CAN live off a given savings, investments, retirement pension, etc in a given area? For example, I was looking at the CNN money top 100 cities to live in, and honestly most of them I don't want to retire to. However, I think it would be a mistake to only consider places I've been with the navy, where i came from, etc. For example, Walnut CA has good schoools, realtor.com shows 1500+sq ft homes are there for under 400k (no idea if they are nice areas).
My boys are young, they will be 9 and 12 IF i retire in 4 years, schools are key, and I of course can work, but am curious: for those who have or are about to retire, how much research and travel you did to determine WHERE to retire ?
thanks
jim

[jimcav]

okay, yes i did mean follow-up and edited the title. Not angry, but I am nervous about what congress will be doing over the next 4 years, mostly because I can't buy a home now, but low rate make me wish i could--oh well most things are about timing.
it is already a difficult decision to contemplate. In fact I suppose i need to check rents too--assuming i can live another 35-40 years, is it better to buy a home (something i still feel almost compelled to attempt, so firmly is that american dream washed into my brain), or rent a place?

appreciate the links to good calculators--I am checking them out now

[Ken Robb]

If we ignore the financial analysis of rent vs. buy we are left with two big considerations. How long can you be sure of renting the same place at an affordable rate. Rents will almost surely rise and probably more than the monthly cost of owning a place. Excluding apartments that get conversions to condos you can usually expect an apartment to be available to rent "forever". Houses and condos owned and rented out by individual owners often are available for rent for just a few years. People buy them for their own future residence and rent them in the interim. Around La Jolla for instance we have always had people buying homes for their planned retirement a few years in the future. These are good options for tenants who only need a rental for 6 months to two years but not for a retired person who wants to have a permanent rented home. How do you feel about not having control over when you move?

The other consideration is can you decorate and landscape in a way that you enjoy? If the landlord will allow you freedom to do so can you afford to amortize the cost of these improvements over the length of your tenancy?

[Louis]

The single biggest advantage (for me) of home ownership is that you have more choices of location. The two biggest drawbacks are simple: Time and Money. Homes are a huge time sink, both inside and outside. The expenses are also highly variable - the A/C might cr@p out this year, or five years from now. And what about the roof, that also needs to be done eventually. And the siding. All that forces you to have much larger "emergency" and intermittent maintenance budgets than you would with an apartment, where you have a perfectly predictable expense pattern.

[1centaur]

Don't want to make this a philosophical debate, but just on the arithmetic, if the governments of the developed world (not just the US) print enough money to solve the debt problems, there will be inflation and that favors debtors (mortgage holders) more than renters. Money is VERY cheap today, but Japan proves it can stay cheap for a long time. Many "smart money" investors are now betting that housing has bottomed, or soon will as another wave of foreclosures roll through. Personally, I'd rather buy given my belief that the government COULD print enough money to create inflation.

[Ralph]

Well....We don't spend more than 3.5-4 percent of our investible assets in any year. And we try to stay well diversified. So nothing really kills us. Mostly own stocks that pay that much (or more based on original cost basis) in dividends. And various types of bond funds, some pay more than that.

One great thing about retired military, you won't have to budget for health insurance....a big item in our budget....and I'm medicare. But still spend about $1100 monthly for my suppliment, and wife and handicapped daughter's primary health insurance.

Also we don't spend less in retirement. Don't get any shirts and suits measured up in the office anymore, don't take clients to clubs, etc....so savings there. But traveling eats that savings up.

My advice.....pick a low cost sunbelt place to live....buy a simple house for about $150,000 even if you can afford more (There is help for first time buyers), and get a part time job. Live the good life, and ride a lot.

Edit addition.....REgarding best weather place in US to live. Met a truck driver and wife team a few years ago....who were ready to retire....really a small businessman....who had delivered stuff all over US in every time of year over a 35 year period. So I says to him...."where in US is best place to live re climate?" He said...."not too far N or S of I 40, someplace across the US". After studying a US map, I see what he means. I currently live about 500-600 miles S of that line....it's a little hot sometimes...but cheap living.

[dekindy]

I would find a good place to live with a good climate and plenty of water not close to the ocean, earthquake zone, or volcano; in other words Nirvana! Halfway kidding but there are factors serious factors that the surveys don't take into consideration and other factors that get too much weight. I consider Nashville(is that close enough to satisfy your I-40 hypothesis?) a very nice place to live but since it is very close to the New Madrid fault that would not be a place that I would choose. I have been down on Indiana in recent years, lived here my entire life, but when you add serious environmental catastrophes like water shortages, earthquakes, tidal waves, etc., it is not half bad.

[jimcav]

I would find a good place to live with a good climate and plenty of water not close to the ocean, earthquake zone, or volcano; in other words Nirvana! Halfway kidding but there are factors serious factors that the surveys don't take into consideration and other factors that get too much weight. I consider Nashville(is that close enough to satisfy your I-40 hypothesis?) a very nice place to live but since it is very close to the New Madrid fault that would not be a place that I would choose. I have been down on Indiana in recent years, lived here my entire life, but when you add serious environmental catastrophes like water shortages, earthquakes, tidal waves, etc., it is not half bad.
it was cornfields when i grew up near there--now it has top rated schools and is considered a great place to raise a family. I still hate the humidity and mosquitos of summer and the cold winds of winter though.
Ideally, i'd love to find a place where the previous owner was forward thinking and invested in solar or geothermal!
thanks to all for the serious comments--much more to think about and research.

[bargainguy]

Me and the missus just moved to Sacramento. I like to bike every day and the climate here is ideal. We've been here a little over a month and I've been able to, whereas in the midwest where I moved from, it would be a little dicey in the dead of winter, but not impossible given the warmer winters lately.

We chose to rent first, get the lay of the land. No hurry in buying a house. This area was hit hard by the housing bubble and it doesn't look like it'll rebound fully for at least another 5-10 yr., so we're content to hunker down in a rental to see how much we like the city vs. the burbs. vs. whatever before we plunk down some serious coin.

Rental vs. buying is a tough choice. If you know the area and like it, buying makes more sense financially. If you don't know the area well, start with a rental. Nothing worse than buying and then realizing it doesn't work at all for a reason you never suspected -- bad neighbors, horrible traffic, crazy local ordinances, etc.

Don

[1centaur]

...and in California, always, always the water situation. I would be looking to avoid areas dependent on a reservoir that's drying up or the legislature to send someone else's water your way, especially if I had a pool or something other than a cactus/rock garden. And in much of the state I'd hire a geologist to opine on the rock formations under the house before buying it - the difference in earthquake damage from getting more bedrock and less liquifaction-prone soil can be enormous, whereas I felt post-Northridge insurance exclusions/deductibles were a real threat to a retiree's net worth.

[bart998]

I used to patrol Walnut. Most of it is decent to high end. The only run down area is the south west corner around Camino Teodoro... Also look at Diamond Bar, Glendora, San Dimas, Claremont and LaVerne in the same general area. All decent places to live. $400k sounds a bit low for Walnut, which does have the highest rated schools, but that range is doable for San Dimas/LaVerne which also have good schools.

[Climb01742]

i spent part of my childhood in portland, oregon, so i am biased and semi-knowledgeable. western oregon feels like an ideal place to me (eastern oregon is quite different). the climate is temperate and varied, with ocean, mountains, rivers and gorgeous valleys all within an hour or so. and if water ever does become an issue in america (which sure seems like it could happen) the PNW has one thing in abundance. rain. and for those that care (and i sure do) portland has a ton of great places to eat. one caveat for those who aren't aging ex-hippies (guilty as charged): portland definitely has a crunchy vibe. i dig it. but not everyone would.

[LouDeeter]

Don't forget to look at both the state income tax and state property taxes. Florida and Texas are two states with no personal income tax and great weather. You are retiring from the military and you say you plan to work given the age of your kids. Work might dictate where you live after the military and will give you opportunities to see whether the place you are working is where you also want to retire. I initially took a job in Huntsville AL after military retirement, but a year and a half later, a job offer from Orlando brought us to Florida, where we are now retired from industry and military. My recommendation is to look for a job in an area that has the attributes of a place you might like to retire and has good schools.

[oldpotatoe]

Hello all,
I was reading the retirement thread with great interest, as I am eligible to retire from the navy in 2016, not that far away. However, I am doubting it will happen. I have googled, but does anyone know a good calculator to determine if you CAN live off a given savings, investments, retirement pension, etc in a given area? For example, I was looking at the CNN money top 100 cities to live in, and honestly most of them I don't want to retire to. However, I think it would be a mistake to only consider places I've been with the navy, where i came from, etc. For example, Walnut CA has good schoools, realtor.com shows 1500+sq ft homes are there for under 400k (no idea if they are nice areas).
My boys are young, they will be 9 and 12 IF i retire in 4 years, schools are key, and I of course can work, but am curious: for those who have or are about to retire, how much research and travel you did to determine WHERE to retire ?
thanks
jim

Thanks for your service and retire at age 40-43 or so?

You aren't going to do nothing, I assume, at that age. I retired at 42 from the USN in 1993 but never thought I would actually stop working.

I looked at doing something, along with pension, that would sort of equal what I was making in the USN..plus wife work?

Look at available Docs in any area to see if they take TriCare, if you wish to use that health care plan(HIGHLY recommended, not a better plan in existence today) but it's tough to find TriCare docs here in the republic.

We chose Boulder because of the amount of family in and around Boulder.

We made it work.

AND next year I'm starting Social Security, before the numbskulls(all of them) in DC change it.

But ain't selling the biz anytime soon. That is retirement $ as well, when I sell it.

[MattTuck]

As far as trying to time the real estate market, don't.

Yes, rates are low now. And prices are relatively low compared to recent years. But there are still a lot of head winds to real estate. As they raise rates (maybe not for some time) that will be a drag on prices, most of the desirable stock is already gone (or goes very fast when on the market) and so the existing available inventory is pretty poor, without strong economic growth it will be difficult for prices to increase, foreclosures in 2012 are expected to hit all time highs, no one can get a mortgage, etc. etc.

When you are ready to buy, invest the time and have patience to get the house you want at the price you want.

As far as retiring, I don't have any comment other than make sure you are on firm financial footing. You have two children, and you don't want to realize you made an error a decade from now when your skills and contacts to the work force have atrophied.

[Ken Robb]

...and in California, always, always the water situation. I would be looking to avoid areas dependent on a reservoir that's drying up or the legislature to send someone else's water your way, especially if I had a pool or something other than a cactus/rock garden. And in much of the state I'd hire a geologist to opine on the rock formations under the house before buying it - the difference in earthquake damage from getting more bedrock and less liquifaction-prone soil can be enormous, whereas I felt post-Northridge insurance exclusions/deductibles were a real threat to a retiree's net worth.

There are maps detailing all known faults and soil types in San Diego to help narrow one's choice of neighborhoods. As for Sacramento, the summers are too hot for me but one can escape to lovely mountains easily.

[jimcav]

I used to patrol Walnut. Most of it is decent to high end. The only run down area is the south west corner around Camino Teodoro... Also look at Diamond Bar, Glendora, San Dimas, Claremont and LaVerne in the same general area. All decent places to live. $400k sounds a bit low for Walnut, which does have the highest rated schools, but that range is doable for San Dimas/LaVerne which also have good schools.

I hope to maybe do a family trip there and check things out--looks like it is about 7 hrs away though.
thanks
jim

[jimcav]

Don't forget to look at both the state income tax and state property taxes. Florida and Texas are two states with no personal income tax and great weather. You are retiring from the military and you say you plan to work given the age of your kids. Work might dictate where you live after the military and will give you opportunities to see whether the place you are working is where you also want to retire. I initially took a job in Huntsville AL after military retirement, but a year and a half later, a job offer from Orlando brought us to Florida, where we are now retired from industry and military. My recommendation is to look for a job in an area that has the attributes of a place you might like to retire and has good schools.

austin is on my list of places to visit! Not a fan of florida weather, but have only spent time in navy places: jacksonville, pensacola, panama city, and orlando

[jimcav]

My wife has been at home for the last 8 years, and I already see she is not wanting to even try to re-enter her old field. she is using the time away as justification to stay away. She talks about just getting a retail job.
That seems a complete waste, but then i suppose if i just sit on my ass (well, actually, ride, guitar, woodwork, maybe kayak etc) then that is a waste too. But I definitely feel like a break from work is in order, although as i crunch numbers at the t rowe price calculator that seems unlikely. one of us has to work (doesn't have to be me :)
Well, I appreciate all these thoughtful and insightful replies!
jim
Thanks for your service and retire at age 40-43 or so?

You aren't going to do nothing, I assume, at that age. I retired at 42 from the USN in 1993 but never thought I would actually stop working.

I looked at doing something, along with pension, that would sort of equal what I was making in the USN..plus wife work?

Look at available Docs in any area to see if they take TriCare, if you wish to use that health care plan(HIGHLY recommended, not a better plan in existence today) but it's tough to find TriCare docs here in the republic.

We chose Boulder because of the amount of family in and around Boulder.

We made it work.

AND next year I'm starting Social Security, before the numbskulls(all of them) in DC change it.

But ain't selling the biz anytime soon. That is retirement $ as well, when I sell it.

[Johnny P]

One of the biggest problems with retiring at an early age is the cost of health insurance. You will be eligible for medicare at 65, but what do you do till then?

[jimcav]

One of the biggest problems with retiring at an early age is the cost of health insurance. You will be eligible for medicare at 65, but what do you do till then?
access to care at military treatment centers or VA medical centers. I don't know enough about it, but think if you live far from these it gets expensive
at any rate, health care is not currently on my list of major retirement expenses, but i f i retire somewhere far from a VA hospital it might have to be

[oldpotatoe]

access to care at military treatment centers or VA medical centers. I don't know enough about it, but think if you live far from these it gets expensive
at any rate, health care is not currently on my list of major retirement expenses, but i f i retire somewhere far from a VA hospital it might have to be

Tricare is a bargain...just need to find somebody that takes it.

[wasfast]

I tried the retirement thing at 45 (some years back) and learned several things.

1) Even with no debts, the cost of health insurance, even for 2 people, is by far the largest living expense. The luxury of the health insurance with low deductables etc quickly gave way to catatrophic policies with lower premiums (~$200/mo) and a $2000 deductable. Lifewise of Oregon is a good carrier for such policies (at least back then).

2) If you don't have a plan of what you think you'll be doing, in 6 months, you'll be bored out of your mind.

3) Time is more valuable, when you're working, as far as getting projects done (bike, house, car etc). When you don't have a slot of time to get it done, it doesn't get done. You think "I'll just do it tomorrow". Tomorrow didn't seem to come for some reason.....and I'm a total Type A, organizer.

4) For some, you'll have plenty of money but the standard dream of doing all sorts of expensive trips etc can be a short to ground on your finances. This is hyper true as you could easily need your money to last 40 plus years. That's a long time. You certainly don't want to run out of money at 80 and have to find some sort of work.....not going to happen!

Regarding location, there is no such thing as temperate climate and low cost. Pick one or the other. You lived in San Diego, you know one example of that.

For my wife and I, we researched areas for several years with the intent of positioning for later retirement. It's easier to get moved etc when you're working than once the time comes. It also lets you time the market some and find the place you like without time pressures of "now". Choose wisely.