@tom1944, tbh, I thought that NJ capped more than it apparently does; sorry. That said, even with our lower income after my wife retires, I don’t see it as being value for money to stay in NJ.
Bob I agree. NJ is expensive. I plan to stay but that is entirely driven by family. The majority of my family is here.
I have two friends who just retired recently. One is moving away to be closer to her child’s family but still staying instate. We’ve been chatting for months as we talked about the big cleaning out and downsizing for her move. So much of the personal stuff she got rid of she characterized as a “tax” related to professional work: professional clothes, shoes, accessories, valises, and more. It was hard, but she wisely donated 90% of her work attire to a place where these items could be repurposed to help economically-disadvantaged women looking for work. My friend knows she won’t be needing these things and there was no sense hanging on to them.
She was also one who fretted about “having enough,” and we talked on and off for the past two years. We figured that she would not need to spend money on: commuting, tolls, parking fees, retirement plan contributions, FICA and Medicare taxes, pricey lunches, dues, continuing education and other sundry trappings of being a professional woman–all added up to significant sum, probably enough to pay the property taxes on her new house + some with very little change in lifestyle except for changing cities.
The main difference for her, though, is the fact that her husband is one of those lucky few who has retiree medical benefits until Medicare takes over and it covers spouses. Once she told me that that was in the bag, I just laughed and said, you have it made! Go retire and don’t look back! She’s 57 so those 8 years of retiree medical benefits will make a huge difference.
My sister pays very little from ACA, I remember she told me less than $100. She is not a high earner either but high enough that she doesn’t go on Medicaid. So even though my husband and I have inexpensive health care cost when we retire, it’s not much different from my sister.
When retirement seemed imminent, I took the time to make a rough guesstimate of the categories and amounts we were spending, as well as sources and amounts of income. I then did two comparisons–what would happen in each of those spend categories after H and I retired and then what would happen after one of us died.
It was a pleasant surprise to see how much our disposable income would rise around when we retired. We would have mortgage totally paid off after years of prepaying on it, as well as all of both kids college tuitions and expenses. We also put in PV, so our electric bill had dropped from $100 to $20. H could no longer contribute to retirement or tIRA after retirement, which was another significant expense. Our state has NO tax on pensions! All in all, we could afford to eat out and dine more in retirement, Even while providing full support for D.
Estimates have been fairly accurate and we are financially much more comfortable than we ever anticipated and are very grateful.
DW’s required attire recently switched from “usually business casual” to “nearly always professional.” What a difference in price! Here’s a question where I might actually help my wife. Have any of you found business attire for women that includes useful pockets? Sorry for drifting OT, but it relates to reduced expenses in retirement, because I guarantee that DW will wear nothing fancy after she retires.
Also, since she frequently trains for marathons, she’s usually pretty lean, but the difference between her size when she’s marathon-ready and when she’s more normal is considerable. She used to take clothes in and let them out, now she mostly has clothes that are appropriate for her two fitness levels.
My kids call it my “uniform,” but I have some Underarmour that I find handy in all seasons, although I switch from shorts to cargo pants during the winter. I wear Point 6 wool socks all 12 months, I don’t need a shoe other than New Balance, and black suits me just fine.
New Jersey’s big tax is property tax. I am helping my 91 year old mother sell her house (I’ve been urging for over 10 years but she is finally seeing the need). Her property tax is over $28K per month.
I’m not retiring but will slow down. I wonder if expenses will go down or up [without some affirmative choices].
We’ve been savers ($150K-$250K per year in Defined Benefit Plan). Plus a number of years, substantial post-tax savings. We have to stop the DB savings because there is a cap that we will hit pretty soon. We have been paying for the kids educations with 529 Plans funded a while ago. ShawD will have some left after her Masters. ShawSon will probably go over as his hotshot MBA is probably more than we saved for.
We have had 1.5 houses up until now (plus a couple of rental properties). In the upcoming years, we may go bicoastal, which could lead to the purchase of another property. This winter, we are going to experiment by renting.
I think that like cbreeze, we will contribute to their 529s again so that they can be used for grandkids when they arrive (neither kid is anywhere near there). If they are willing, we will take them on vacations as young adults. My FIL did that and it led to some real family bonding that wouldn’t have been there otherwise. Last year, we took them to Croatia and the Czech Republic. This year, we are having a hard time finding dates that work for both – we’re just going to head up to our half-owned vacation house for part of August with both of them.
Right now, I travel a lot for my work. Once a month to London. Once a month these days to Germany. Random trips to NY, Miami, Sao Paulo, Singapore, etc. We sometimes connect these to vacations (ShawWife met me after I was working in Singapore last January and we went to Vietnam, Cambodia and Thailand). A couple of years ago, a client put me up for a week at the Four Seasons in Mexico City while I was working and ShawWife came and we stayed for a long weekend. One of our Australian clients basically paid for my family to come when I was coming to Australia (made it more likely I would agree to come). A group offered to pay for a vacation in Hawaii for me and my family if I would speak to their annual gathering. We can also use miles and points to pay for airfare and hotels. So, it is possible that our travel expenses would go up if I slowed down on work.
As a business owner, I’ve been funding medical costs all along, so I’m not waiting for any retirement age. These costs likely will increase every year. If medical costs of nursing homes became prohibitively costly, ShawWife and I have a Plan B to move to Canada (she’s Canadian).
I currently do one pro bono projects. Sometimes these also involve foreign travel. In the current case, it is in DC. But, my other pro bono project is writing a book on how to think about career choices and career trajectories. I often get paid marginal amounts for my pro bono projects, the pay is far below my opportunity cost.
ShawWife and I have been putting money into a Fidelity Charitable Giving Plan (?). The idea will be to provide support when we do pro bono projects to push them along. We have a friend who built a school in a town in Cambodia and a dormitory for female law students in Phnom Penh. I always thought that direct giving combined with the use of my skills would be what distinguishes my future activities from current ones.
We did a retirement plan with a financial planner four years ago. It showed that if I keep working, even at a reduced rate, we will continue to accumulate. I guess the question would be what would happen if I couldn’t work. It assumes earning an amount that is less than half of what I have earned over the last few years. It further assumes I slow down work to half-time in 2019 and stop altogether 15 years later. On travel expenses, it assumes: Travel expenses average $15,000 until 2019. They are increased to $25,000 annually over the next decade until 2029. Between 2030 and 2039, travel expenses are reduced to $15,000 per year and then are further reduced to $7,500 annually between 2040 and 2049. In the years after 2050, travel expenses are expected to average $4,000 per year. It factored in costs for weddings but I don’t see that it included funding vacations with kids or grandkids 529 plans. I guess we ought to revisit.
@shawbridge, can you clarify this for me?
28k per month? Or 28k per year?
336k per year?
If somebody is paying 336k in property tax, that somebody can probably retire. May have to downsize though. 
I was under the impression a lot of retirees leave NJ because of the death taxes–it can be a very expensive place to die. Kiplinger’s ranks New Jersey #1 among “states with the scariest death taxes.” It’s one of only two states (Maryland is the other) that has both a state estate tax (over and above the federal estate tax) and an inheritance tax. And New Jersey’s estate tax exemption is by far the smallest of any state, $675,000. So if you die as a New Jersey resident leaving assets of more than $675,000, the estate tax needs to be paid out of your estate before your heirs get anything, and the rates aren’t trivial, ranging from 4.8% all the way up to 16%. Fortunately, property you leave to a surviving spouse is exempt from the estate tax, but if the surviving spouse later dies leaving assets of more than $675,000, the estate tax will need to be paid. Separately, there’s an inheritance tax ranging from 11% to 16% on inheritances of any size, paid by the party receiving the inheritance. Spouses, children and their descendants, parents, and charities are exempt from the inheritance tax, but any other beneficiaries named in your will, or other heirs at law if you die intestate, will need to pay it. In short, some of what you leave may be taxed by New Jersey twice, first through the estate tax and then a second time through the inheritance tax. New Jersey also does a “look back” on gifts you make within 3 years before your death and will charge the recipient inheritance tax on the gift, unless the recipient can show that the gift wasn’t made “in contemplation of death.” Maybe it’s possible to get around some of this through sound estate planning, but I think many NJ residents figure it’s just cheaper and easier to pack up and move to a state like Florida or Arizona that taxes neither estates nor inheritances.
One thing about this thread…there have been just a few posts about state inheritance or estate taxes. This should be an issue for many.
Also property taxes… Calif for example has very low prop taxes. No estate or inheritance taxes. Yes income taxes are very high… But if you are retired… High income taxes may not be an issue. Plus we have lots of municipal bonds for sale here. Tax free to both state and federal government. 
Real estate costs a lot but still…a person can buy a pretty damn nice place for $2 million and the prop tax will be about $24,000 and increases are capped.Sounds like the prop tax rate is $65,000 in NJ for a similarly priced place. (You can buy a nice place here for less than $2 million. I am using $2 million for comparison purposes).
And the weather is sooooo good here. You don’t need as big a house here. You have the outdoors here.
My advertisement for Calif is over.
@IxnayBob, with pencil skirts, there is virtually nothing that looks good with pockets. Pockets defeat the desired silhouette. But, if your W has to pull her jacket on before conferring with people, some jackets have discreet inside pockets or have side pockets, just like men’s jackets obviously.
I’m sure that your W is a good shopper already :), but if she wants a wardrobe makeover, my suggestion is to do a good inventory of what she has now, then go to Nordstroms or Saks to have herself fitted for some great new tailoring to fill in the missing pieces. That way she’ll know which labels work best for her height and body type. She can build a good mix and match work-uniform wardrobe. There was a recent thread here regarding a woman attorney who needed to shop for new work clothes. If you care to read through it, there are many great ideas here:
http://talk.collegeconfidential.com/parent-cafe/1793942-fashionistas-help-needed-p1.html
HI also tracks the Fed estate and gift taxes, so if you dong owe any fed estate and gift taxes, you don’t owe any state estate and gift taxes either. There is currently NO HI tax on SS and pension benefits, so our state income tax fell significantly once H retired and his pension is a primary source of our income. We have great weather, except for the VOG (especially if you live on the Big Islsnd). If you’re an owner-occupant, you get some real estate property tax exemptions. You can get a very nice place here for under $2 million. Property taxes here are $6 per $1000 for properties valued at over $1,000,000.
HI is a great place for the right folks. Have an extended visit before buying to avoid buyer’s remorse. 
“As a business owner, I’ve been funding medical costs all along, so I’m not waiting for any retirement age. These costs likely will increase every year. If medical costs of nursing homes became prohibitively costly, ShawWife and I have a Plan B to move to Canada (she’s Canadian).”
?? Seems to me that if you are wealthy, saving tons of money, funding schooling for grandkids, traveling like crazy, owning a charitable giving plan, that Plan B should be paying for a nursing home out of your savings, not moving to go on the dole for the Canadian government to support you. Because really, isn’t that what your money is for?
It’s one thing to accept social security and Medicare benefits, because you’ve been paying for them forever. But moving to get your nursing home paid for so it doesn’t have to come out of your own substantial assets? Just saying, that sounds unethical to me.
yup, @dstark, $28k per year in property tax, which seems pretty bad to me. And that is for a house I’d value at $1.5 MM.
I wish I could convince Shawwife to go to a low tax state, assuming we could make that our primary residence over time.
Ok… @shawbridge, you shocked me.
I like what you are doing with the charity work not that my opinion matters. I still like what you are doing.
Hmmmm… So property taxes in NJ are about twice Calif’s prop rates…not almost three times like I was assuming.
We do have caps on property tax increases.
This clarification lessens the impact of my prior post pro California post.
My advertisement for California compared to New Jersey is a little less effective.
My family used to go to vacation in Oregon. The state has Portland, Sunriver, Eugene, Ashland…I like it there. When interest rates dropped the first time to 1 percent, maybe in 2004, that wasn’t good for us. I told my wife maybe we should move to Oregon. She didn’t like that.
Plus Oregon has an estate tax or an inheritance tax. I don’t like that. Oregon has high property taxes. I don’t like that. Income taxes are pretty high too.
We aren’t going to move there. I prefer Oregon to Arizona except for the taxes. I am not moving to Arizona either.
I think if we had to move, I am not expecting we will…we would still stay in California. Maybe move to Northern Marin, or a little north of the wine country. Maybe, a little south of San francisco.
Some homes in Berkeley now go for about $1,000 a sq ft. That blows my mind. Damn it.
@shawbridge, have you been to Park City in Utah?
I’m contemplating going on phased retirement when I hit 66 or 67, and working part-time until I’m 70, postponing Social Security until age 70 to maximize my benefit. My Social Security benefit will be larger than DW’s and I’m thinking she’s a good bet to outlive me–she’s female, she’s 5 years younger, she’s generally in better health, and she has better longevity genes. So maximizing my Social Security benefit by waiting until I’m 70 could give her more income in her later years because if she outlives me she can claim my Social Security benefit as a surviving spouse benefit, in lieu of her own smaller benefit.
My employer allows tenured faculty to take phased retirement. I think they really just want to start pushing us out the door as soon as they can but they can’t force us to retire, so they do it through incentives. Pretty sweet deal–they’ll pay a pro rata share of my salary based on how much I work, but they’ll continue to pay full benefits, including fairly generous employer contributions to my 403(b) defined-contribution retirement account, as if I were still working full-time. My actual income will be lower under that arrangement, but that’s OK because DW and I will be looking to downsize from our large, expensive house to a 2 br apartment or condo once both daughters are finished with college and my 98-year-old MIL passes on (she lives with us and is in poor health). So we’re looking at much lower expenses down the road. Rent will be less than our current mortgage, lower or no property taxes, lower utility bills (ours are enormous), less property upkeep/maintenance, lower insurance, fewer mouths to feed, no more college tuition.for starters. And once I retire, commuting costs disappear and wardrobe costs decrease; and depending on how close we are to good public transit lines, I’m thinking we can get by comfortably with one car instead of the 2 or 3 we’ve had lately, meaning further savings on car insurance, gas, maintenance, and the cost of replacing multiple cars every few years. About the only thing I see possibly increasing is travel, but we already spend quite a bit on travel, including travel by our two daughters which will eventually be on their own budgets, not ours, so my best guess is no net change there. Oh, and we have two aging dogs, one of whom is quite sick; his veterinary care, meds, and special diet are quite costly. I’m quite certain that once those two little guys pass on, we won’t replace them. None of this involves any serious level of self-denial on our part. It’s not as if we love this big, expensive house which we bought to accommodate my MIL when she came to live with us and she needed everything on one floor due to mobility issues. DW and I lived quite simply and comfortably in smaller spaces before we had kids, dogs, and live-in extended family, and getting back to that life has actually been a goal of ours for some time now. Just a few more crosses to bear and hurdles to overcome.
@bclintonk, are you thinking of staying in the upper midwest?
@AttorneyMother, DW switched to relatively man-tailored suits, but obviously big bulging pockets still won’t work. She likes Nordstroms, but has not been happy with their suits (she thinks they’re too foufy for her no-nonsense style).
Re property tax in NJ, ours is slightly above 2% of FMV.
Hmmmm…I don’t know why I thought NJ. Prop tax rates are 3% of fmv.
I pay less than 1 percent of fmv.