Exactly. The delays in the Truck and Semi were not good news.
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I think thatâs a great idea. IMHO, itâs frequent enough to feel like youâre reasonably on top of things and not so often that it becomes an obsession.
H does something similar for us. He produces a power point presentation 
and a pretty detailed deck. I humor him and act appropriately impressed and interested in the minutiae. Heâs well aware that Iâm humoring him but appreciates it anyway. Iâm the one with the MBA and finance/investments background, but heâs always enjoyed running the numbers.
We have most of our equity money in a few index funds (finally, and at my insistence) but H likes to also review our spending in numerous categories.
Yes, weâre fortunate to have some pension income and when itâs eventually combined with SS we could live on that, barring any outrageous medical expenses.
H has only recently realized how much downsizing is reducing our household expenses. While building weâre living in a temporary home that has an electric heat pump and two electric tank type water heaters. Only the fireplace and the cooktop are gas. Our latest combined gas and electric bills were less than 1/4 what we paid in our old house and weâre keeping the thermostat set warmer. The new house is going to be super energy efficient, so even though itâs larger than where weâre living now I expect the bills will be no higher.
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Knowing when to walk away is the most underrated skill.
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Thatâs an interesting point, Silpat - when creating/buying a retirement place, to make it as sustainable and inexpensive to maintain as possible. As we are talking about retirement monies, I keep seeing two tracks - how to have enough saved and invested well to support yourself, and how to minimize your expenses (e.g., buy a place in cash if able to). If you have the option - ensuring energy bills are as low as possible is a factor I didnât think about (maybe solar, extra energy efficient, etc.). That could add some peace of mind.
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Property tax can be a big factor for retirement planning, minimizing monthly expenses.
Sometimes Iâve heard of empty nest couples moving to a nearby town to reduce property tax expenses after they no longer care about school district. The examples Iâve heard are usually near NYC / Long Island, where property taxes can be shockingly high (tens of thousands of dollars per year), but the factor is worth consideration for all. Also for those who opt to rent in retirement, it can help justify the sticker shock of rent costs to be avoiding property tax.
If considering a move to another state, state income taxes could also be a factor. State-by-State Guide to Taxes on Retirees | Kiplinger
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My friendâs house in Austin was bought by an older couple with grown kids from a nearby expensive suburb. They no longer cared about the âbetterâ schools. They paid $151k over asking.
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When our kids were younger, we debated moving to a better school system or sending them to private schools. We chose to stay put, because our property tax bill was forever, but tuition would eventually end. We feel that it was a wise choice for us. Our property taxes are really low, which is much appreciated now that we are retired. We like our house and our neighborhood, so it wasnât an issue to stay in our house. My H really enjoys yard work, and he has plenty to do here. If that changes down the road, we can always move - but we will keep property taxes in mind if we have to choose a new place.
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My in-laws keep talking about selling their house (own it free and clear) and moving to an apartment. But they would pay more in rent in 3 months than they do in property taxes in a full year. Father in law also doesnât want to do the yard work anymore. Told him he could pay someone to do that but that is something he just cannot do. But if he gets an apartment, he will be paying someone to take care of the yard, paying property taxes, etc. All covered by his rent. But there is just something of a mental block there.
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âBut they would pay more in rent in 3 months than they do in property taxes in a full year.â
But they are missing the other side of the equation. Letâs say they sell the house for $1m (for simple math); then, they have all that cash to invest. If they invest it in a mix of stocks and bonds/Treasuries, and earn say, just 3%, theyâd be making $30k per year in interest/cap gains to offset their rent.
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I have done the math. Returns on cash from the house (even at a somewhat higher rate of return â though pre-tax) would be less than the delta of rent and property taxes. And the house will appreciate over time and rent will increase as well (as will property taxes but they have been increasing slower than rents with no upward pressure on the horizon).
Definitely can work out in terms of renting versus continuing to own. But you have to look at the numbers which are not the same in all circumstances.
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Reducing costs in retirement was very important to achieving our retirement lifestyle goal. Energy and school district were two big considerations when we moved out of the house we raised our son in. We bought a solar home in a much less expensive county with no concern for schools. Combined with spending summers in our new place in Maine, we further reduce our energy consumption by avoiding summer AC in AZ and winter heating in ME. Our combined property taxes for both houses runs about $6K, no mortgage on either. This housing footprint enables us to live a more generous lifestyle than when we were working.
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That is very different from what I would have thought. You always hear about the high taxes in California, but itâs rated Tax Friendly and Texas is Least Tax Friendly. I havenât read the analysis yet, but I assume thatâs partly because of property taxes if youâve stayed in the same house for a long time.
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Ding ding ding. My one modest home in Texas has greater property taxes than @ChoatieMom 's two homes.
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California is âtax friendlyâ in part because it does not tax estates! And property taxes are not hiked up every year apparently. There is a saying our estate taxation prof used, âYou want to work in WA, shop in OR, and die in CA.â 
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Tax friendliness will be in the eyes of the beholder. I think something like 38 states donât tax estates. I plugged in states I would likely retire to and included California and compared them side by side. One was a tax unfriendly state and the two others were neutral. California would be worse for me for taxes than any of the other 3 states. YMMV as they say.
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After a quick comparison of Texas and California in the article, Iâm not sure I agree with their assessment. First I think you should apply the tax scenario to your personal situation.
As an example, California median real estate tax is $729/$100,000 and Texas is $1692/$100,000 but how much does a house cost in the area youâd want to live in? If Iâm moving to California to retire real estate is crazy expensive. Texas housing seems a bit more reasonably priced.
Neither state taxes social security but California does have an income tax, Texas has none. So California is taxing other forms of income just not SS. Texas also has a lower sales tax than California and the article says Texas homeowners over 65 may qualify to defer real estate tax pay until they no longer own the house.
California might be a good state if youâve lived there for a long time. Doesnât seem as attractive as a retirement destination.
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You really need to run all of your own numbers rather than rely on this article. It totally depends on your income. California taxes retirement income. More at higher levels. Where I live our property taxes are high, our sales tax is high but no retirement income is taxed. So if I have a very high income from retirement accounts I can try to control my property taxes and sales tax. Some states I will be taxed on that retirement income so even though property taxes and sales tax may be lower my taxes could be higher. Everybodyâs situation will be different.
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According to that web siteâs quick comparison:
- CA has a state income tax while TX has none.
- CA state income tax is steeply progressive, so it may be more of a concern to high income retirees than low income retirees.
- TX has a lower state sales tax (by 1%).
- TX has a higher property tax rate.
- But this may be influenced by CA Proposition 13 limits for long term owners, which may apply to some, but not all, retirees. However, even without those limits for long term owners, the rates per dollar of assessed value are lower in CA.
- Differences in property values can also affect amounts of property tax. A higher rate on a cheaper property in TX may not necessarily result in a higher property tax bill than a lower rate on a more expensive property in CA.
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When a family member was looking for a home, the realtor suggested they consider good school districts, even though they had no children in the public schools. Realtor advised that homes typically hold their value in good school districts, and the number of prospective buyers is higher (supposedly translating into higher resale). That may no longer be the case with the current RE market, however.
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And in Texas (and probably other states) if you are over 65, most of the taxing entities freeze your property tax assessment. The huge one is school district taxes!
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