I 100% agree with most (including us) wanting to have an appropriate scheme - have our financial advisor give the advice and answer the questions on what his going on/keeping us on track. ‘Defensive’ moves on ‘downtrends’ and trying to keep volatility well monitored, among other things are so important to avoid the long recovery from a bad downturn.
We feel good about our financial position, and in pretty good health at age 65 try to continuing staying healthy. Concern about getting DDs/households secure - I know both our sets of parents for the most part didn’t have the luxury on this – DH’s parents were in modest household income and retirement; my dad starting thinking at one point to gift out $10K to each of us 5 kids one year (4 of us had young children, and it was helpful money to us). The paradigm is such now that we may be able to help reduce some stress with DDs doing something to help both DDs get out of renting at the appropriate time. For now, spending time with them and helping them with advice and a bit of financial intervention (helping transfer some of their retirement funds into Roth IRA, helping do taxes with one who doesn’t have the tax support). DD1/SIL will probably be heading for a big transition going out of state - so support help with that. Already helped DD2 with out of state move (company didn’t provide relocation funds). DD2 as an engineer should start making more money in her current job, and she saves and participates with retirement plan – it is going to all these out of state weddings and bridesmaid events; her BF and she also were on a ski trip with some other couples over the holidays. DD2’s car had servicing, and her BF is able to do some of the routine maintenance on her vehicle to save $$ - stuff beyond oil change (had servicing at the dealership); her tire rotation is with her tire warranty (she had been using her full spare as one tire picked up a nail - so scheduling to get that taken care of at Goodyear).
DH has specific hobby that is very active in our current location, and we have a good medical, friend, and church network with where we live now - so doing some home improvements for when the time comes to relocate. If we sell the current home, it will be to move away. Building up a bit of cash available funds (after tax, not out of our Roth). Doing our taxes for 2021 and will see how we plan to take money out of 401k to bring in our ‘operating expenses’. Have to get my W2 from employer. A transition year in 2022 as we begin DH’s Social Security in October. Both our vehicles are good so nothing major there.
That can definitely be the case at least in certain housing markets. But there is a potential for bias in the advice coming from a realtor. At least to the extent commission would be paid based on sales price (expect that similarly sized/built/decked out houses in better school districts would sell for more than those in worse districts).
I was discussing renting v buying with dh last night. However, this was regarding a second place, rather than our primary residence. Assuming ds stays in California and we would have a desire to be near him (at least part of the year) and any future family, I cannot ever imagine buying there. But, I could see renting there.
I do wonder how the whole Covid remote work will play out long term. It has seemed that young people until the time of Covid had been very transient. Frequently changing jobs and thus locations. I do wonder if frequent moves will be less so now. Part of my hesitancy of buying anything wherever he might be would be a concern that he would pick up and move a few years after we bought. Maybe that changes once kids are of a certain school age. All conjecture at this point. No SO, so no grandchildren on the horizon at this point.
My point is that if I wanted to have a place near ds as a second place, I would want to have a lot of flexibility with that as I would be concerned about just how, “settled,” he might truly be.
I’m sure I’ll be corrected by one of the CA property tax experts here, but our property taxes can increase each year by a maximum of 2% plus any approved (approved by 2/3rd’s of the voters) parcel taxes or assessment bonds. But they tweak the property tax code, or try to, in almost every election.
YMMV. CA will be a great place to retire, when that happens.
When you can run 5 +/- miles along the beach esplanade in mild weather almost all year long, that definitely frees and relaxes your mind and body. Very Zen for me.
There’s a lot of nuance to these tax situations! I’ll be sure to look at it from all angles. Someone I met in NC (retiree in a photography biz) said to be aware of business taxes/costs (licenses maybe?) when contemplating a move.
That’s a scenario I’m keeping in mind too. If we move somewhere near adult kids, I’d want to be sure we liked it enough to stay no matter if they left…even if we rented, wouldn’t want to uproot our (presumed!) new network of friends/medical contacts/professional connections, etc.
We already live where a lot of people want to vacation, so it’s hard to think of someplace better for me. Hawaii is the only place that ever comes to mind. When I can mountain bike in short sleeves during my lunch hour in January, I can’t complain too much.
Hawaii is wonderful place to vacation, we’ve done it many times over the years, but I don’t think I’d want live there year round. A lot of rain and it gets very hot in the summer months. Plus, it’s a 5-hour plane ride to the SF Bay Area.
The $729 per $100K is also misleading. Rates are 1% plus whatever levies on top are imposed for school bonds and parcel taxes. But the assessed value can only go up 2% per year from your purchase price. So moving to CA you’d pay about $1100-$1200 per $100K the first year. You’d need to own the house for say a decade and assume prices doubled in that period before it got down to the referenced $729. Not remotely the correct assumption for someone moving to CA for retirement.
The retiree tax article was just meant as a starting point. The various factors would have different significance depending on situation.
Fun story. When we transferred in 1993 from NY (small-ish town) to CO, our new house was twice as big, with sale price almost 3x ….yet had lower property taxes. (There was a surprise about higher cost of water/sewer/trash utility bill. It was still a good deal overall, especially since we switched to a much lower mortgage rate.)
There is a new CA Prop 19 adopted in 2021 that allows people 55 and over or disabled to transfer their property tax base from their old to their new principal residence provided the latter is purchased within 2 years of the sale of the former.
This allows people that have owned for a long time and are paying low property taxes to keep paying the same low property taxes after moving from one CA home to another. This is important because even 2-bdrm condos run above 1 mil where we live. It is possible that a newly-purchased condo has much higher property taxes than a large house purchased long time ago.
It is in our area - and I know in the city DD1 lives in. Personally know a realtor in DD2’s city, and will look at best places to buy in her area with her budget when the time is right. Plan to look for a bit of a fixer upper in a better neighborhood (buying low in the neighborhood).
We have lived in TX, and if DD1/family move to TX we may have something there eventually too.
CA is a very big state, and some areas have different property taxes than others - but we have family there that if they moved away probably could not return (that is what has happened with friends that have done so) - many costs in dense population areas are very high compared to ‘fly over land’. Dense area as well as many east coast states have high property taxes and high costs for living.
We looked a bit at property rates where we are from - along with states other family live at in the nearby states – and houses 20% of our current home value have double the property taxes – and winter climate to boot. We will visit over better weather times or for family events.
I imagine until your 5+ miles of beach has beach bums and homeless scattering your Zen will diminish.
My aunt has a beautiful home on property near an area that has a lot of homeless - and it could get worrisome on feelings of safety. I would have a problem living out in the country because I like having neighbors and the feeling of safety. Yes I know sometimes someone in the neighborhood may have a drug addicted relative that will break into homes, but with having locked doors and lots of windows to see out - our beautiful peaceful tree lined back yard is serene.
Possibly, I haven’t noticed any “bums and homeless” on “my” stretch of the beach. There are park rangers around though they seem to be there checking parking and picnic area permits. And the surrounding neighborhood is quiet.
And in terms of safety, I doubt anyone would bother me.
Comparing property tax is indeed complicated. In our area, the state portion of property tax is exempted for 65+ (as well as disabled.) Other states may offer similar tax breaks.
Our former home was in a very low property tax area yet the schools were good. However, a lot was not included in the property tax for the unincorporated county houses. We paid fire dept. dues, library dues, as well as trash and recycling fees, all of which had been included in our property taxes elsewhere. The fire and library dues more than tripled while we lived there, but I was able to reduce our property taxes through appeals after the real estate crash.
When considering taxes, you also need to determine if a place has county or other taxes. We pay half as much as state to county, and if you live in one area, you pay another what amounts to tax to that area.
Our property taxes are slated to rise about 15-20% next year due to new levies! That doesn’t take into account the correction that will also occur next year (re-assessing due to value increases over the last 3 years). Then it may rise another 20%.
I hope to appeal, but it is VERY tough to compare apples to apples in our neighborhood. Homes that have not been updated can sell as low as the high 200’s. Our home has not been updated like others, but I have no way to show that unless they now accept interior photos from MLS sites. Recently updated homes can sell in the 400’s or 500’s. New homes on scraped lots, even higher. All within a 4-5 block area.
I tried to appeal our valuation about 10 years ago. Very few homes had sold in the prior two years, so I compared ours to others in the neighborhood that were larger, on larger lots, and valued less. (I’ve also had classes in real estate appraisal, so knew a little bit). First person allowed no changes. I went to the next level, and that person said I needed to accept the current appraisal because our home “MIGHT” sell for more in the future. HUH??? Based on what? They also warned me that if I appeal, they could also raise the value even more.
