Move and Change Career/Retire

[LivingAlmostLarge]

I'm interested in moving from the east coast to the west coast. I am determined to do it but I am not sure how to convince my husband to "early retire" but I think if we do this move and leave the extremely HCOLA and move to Portland or Seattle. Trust me those are not "cheap" if anyone wants to argue but they aren't in the same class as what we live or lived in.

DH is currently working and I am staying at home. We have two kids ages 3 and 1 and are 34 and 36 respectively. I'd also like to have 1 more kid so my reasoning for staying put for awhile yet is having a kid while covered by employer provided insurance. So I think a 2 year time frame. I am worried about the maternity rider on a private insurance plan.

This year we should be grossing around $200k. We lived on around $65k including our very expensive mortgage! Our house is a $600k (what we paid) townhouse in an excellent school district. It's worth more I'm sure on our street last year alone 2 townhouses sold in bidding wars above asking price first week up. We owe ~$390k and bought in 2005. I think conservatively in a couple more years $200k is what we'll walk way with when we sell.

We really live on about $30-40k without our mortgage. We lived like graduate students until we had kids and continued the lifestyle. We do have to car loans at 1.9% for $3k and $6k on two relatively new cars.

We did not have any parental help and have actually helped our parents. We paid off my DH's student loans for MBA and my undergraduate loans. We have $450k in retirement accounts saved to date. Our taxable savings right now is at $180k but I am trying to boost that and save all bonuses that come our way.

So what I want to do? I am debating working but childcare will eat up pretty much everything I make with two kids. Still I may pocket $500/month. I forsee making around $60-70k being out of work for 4 years if I got a job now. Long term if we lived where we lived I'd obviously start getting bonuses and promotions like my DH and we'd be like most of his coworkers making $300-400k+. Hence he wants me to go back to work.

However I think a better long term strategy would be to sell our home and move closer to our families on the west coast in a cheaper COLA. We use our home equity to buy a home cash and then we wouldn't have to worry about finding high paying jobs. We could semi-retire and find work if we wanted. Our families live both on the west coast.

My only worry is saving for college and retirement really. If we moved to Seattle we could do a prepayment of the undergraduate at University of Washington. We have $10k and $5k saved for our kids respectively. Plus if we aren't working they may get financial aid?

But I'm not sure we have enough saved though to do this. I know without a mortgage we are looking at not needing the $30k/year we pay now! But we couldn't touch our retirement funds and what do we do to live and keep growing our retirement funds?

If it matters my DH actually loves his job. That's a BIG sticking point. The fact he likes what he does a lot. I'm not sure he'll want to move and switch careers.

Guys can you brainstorm and help me with ideas? How do I present my idea to my DH? Is it feasible? I was thinking of moving after my oldest starts kindergarden between then and first grade.

I project $500k retirement, maybe $250k taxable savings, and $15k college? But our debts would be $0 without a mortgage. We could buy a home cash for $200k. Then work much lower earning jobs?

Suggestion, stuff to consider everything, please throw it at me. EVERYTHING. I can take it. I want to know what I need to consider. This is a BIG change and not something I can contemplating lightly. I read Mr MMM and he retired with $800k stash and seems to have managed. I'm not sure we I can do it with $800k but ideas would help.

My DH is also conservative and will be upset if we live too frugally. He may not live lavishly but he likes knowing he can. It gives him security.

[scfr]

We could buy a home cash for $200k.

If you are serious about this, plan for more, like $350-$400K at least.

[MonkeyMama]

If you are serious about this, plan for more, like $350-$400K at least.

Really? I suppose I read it that LAL was probably moving to the suburbs. Either that or will just buy another townhome (or would be happy with modest square footage).

That said, prices have increased significantly in our city in the last couple of years (+70%?) so of course double check home prices at current. & re-evaluate very seriously when you are ready to move.

{Many of our friends moved up to Portland suburbs for inexpensive real estate, over the years. Obviously it is all relative, but I live in California and so yeah it seems cheap to us. I've never actually priced real estate in Seattle or Portland or know anyone who actually moved to the city proper - I presume would be a lot more expensive. But most everyone I know moved to the suburbs. We very seriously considered moving to Vancouver WA at some point - where most our friends ended up}.

[scfr]

Really? I suppose I read it that LAL was probably moving to the suburbs. Either that or will just buy another townhome (or would be happy with modest square footage).

That said, prices have increased significantly in our city in the last couple of years (+70%?) so of course double check home prices at current. & re-evaluate very seriously when you are ready to move.

{Many of our friends moved up to Portland suburbs for inexpensive real estate, over the years. Obviously it is all relative, but I live in California and so yeah it seems cheap to us. I've never actually priced real estate in Seattle or Portland or know anyone who actually moved to the city proper - I presume would be a lot more expensive. But most everyone I know moved to the suburbs. We very seriously considered moving to Vancouver WA at some point - where most our friends ended up}.

My assumption was a single-family home of decent quality construction in a closer-in Portland suburb (not an exurb) with a very good to great school district, not the city proper.

Portland city proper would be more. And Seattle is more.

Portland real estate has risen significantly in the recent past; prices there are on a major rebound. My mother lives in a suburb, in a modest sized 45 yo house (3BR 2BA, under 2000 sq ft) that is currently valued around $415K. The "catch" is that while it is by no means one of the city's "posh" neighborhoods, it is fairly desirable with very good schools.

The suggestion of course would be to pick a price point and "must haves" and then go tour some homes. At $200K LAL, I am sorry, but I think you will be very very disappointed.

http://www.oregonlive.com/front-porc...es_record.html $200K would be significantly BELOW the median area home price which probably doesn't translate to a home with space for a large family & great schools.

[MonkeyMama]

I don't know where to begin with this. No other takers? I just have a lot of thoughts...

First and foremost, do your homework. If you have family in the regions you are considering (& maybe have lived there before??), then is a good start. I have watched a lot of people over the years move without doing their homework. A lot of them end up undoing their move because it doesn't work out. It's good to be sure you will be comfortable in a place (have you spent time there?). & to be aware of what costs are different in different regions. Up north is known for very expensive property taxes compared to California, for example. The low-cost city we moved to has crazy expensive water (which doesn't really mean much because housing also cost 1/3 of what we are used to - we can handle a big water bill. ). Colleges may be significantly more or less expensive. Differences in weather can create big cost of living differentials.

I very much agree with the Money Mustache philosophy - is how my parents retired. You already have 15 x income or so saved and that will only compound over the decades. I think in two years time you would be in a fine position to "work to live". You will have already saved up enough to retire very comfortably (if you let your retirement compound to full retirement age).

College - if you are choosing to live on a small income, you will get more subsidies for college. I am personally not very interested in any private schools for our kids, but the one very prestigious college our region would be *free* if our child was accepted, due to our income level. On the flip side, my spouse could easily go get a job to pay for college, so I am not overly worried about it. It seems we have many options, even choosing to live on a smaller income. (With your income and young kids, you also have the advantage to just throw some sums into a 529 plan and to let it compound over the years. IT's the same thing as retirement, you don't have to have the entire sum saved today, just enough to compound to a decent level in a couple of decades).

A secret: One thing no one understands is the income tax side of things, and is one reason people often think MMM is just crazy. At your income level you are paying a MASSIVE amount of taxes. If you can easily live off of $40k, then the only taxes you pay at that income level are social security taxes/payroll taxes. A very conservative estimate is to add 10% for social security. (It's really 7.65%). So, if you live off of $40k, then you only need to make $44k (+10%) to net 40k after taxes. You would pay absolutely no income taxes. With two kids, we make about $60k tax-free. (Above that we pay some taxes). A third child may make the first $70k tax-free.

We did the lower-cost-of-living thing in our early 20s when we barely had a penny to our name. My spouse was able to retire and never has to work again. So, I am clearly in the go-for-it camp. I will tell you the biggest plus and minus:

Biggest plus: Life is easier than and we saved more than we could have ever imagined. For reference, our plan was to have kids about 5 years in the future when we moved. Life was so much easier in our lower-cost haven that we sped up our timeline by about 5 years. We decided to get pregnant immediately (& certainly no regrets). That was how astounding it was - and we are pretty conservative types. We weren't going to have kids until we felt really financially stable. But the minute after we moved we felt significantly financially stable. The biggest cost differential was that housing cost 1/3 here. But of course, everything is a little cheaper without the HIGH cost of living.

Biggest minus: The lack of jobs. I don't know how much of a minus this is though. Spouse has never been able to find a job here (& that has not been by choice). But, because of the above, it doesn't really matter at all. A lot of it is also the economy, too. We only live 100 miles away from old city, so our disaster backup plan is to move back or to take a job and commute for the short run.

This reminds me of the other big plus. The school districts we were able to buy here. !!! I am pretty insistent on getting my kids through K-8 here. Maybe K-12. If we have to move back for employment at that time, I would be perfectly content with that. We have come to love the excellent schools (for very cheap) and the roomy house, with kids, but would be perfectly content to move back once our kids are fully grown. We would not need the school districts or a lot of space at that time - we both preferred condo living for just ourselves. So, that about sums up our experience. IT's been an ideal place to raise kids and live out our lower income (just starting out) years. I presume at this point in my life if we decided to move back tomorrow I might actually make a decent wage given the cost of living. That just was not the case when we were only 24. & why we found a move like this so beneficial.

[scfr]

I will also weigh in that it is WELL worth it to consider moving to a lower cost of living area. We did it when we moved from Seattle to Austin, and have never regretted it.

I hope I didn't come off as discouraging, I only wanted to do a reality check on the "$200K for a house in Seattle or Portland" comment.

Are Portland and Seattle the only areas you would consider, LAL, or are there perhaps some areas that would be lower cost that could make your list?

[LivingAlmostLarge]

Currently where we live 3bd/1.5 ba cape style 1920s needs work (new roof/furnace) SFH two streets down, on busy road, my ex neighbors bought in October for $750k. I think 1200 sq ft with the two rooms upstairs horrible roof line that you can't really use part of the room. I live in a good school district and close burb but not city metro. Hence the pricey townhouse. To get a home I'd really like we're looking at $1M plus and that might still only buy me a 2000 4bd/3ba 1950s home that needs work another friend bought in August. And that's with an hour commute for my DH.

I don't know how I'd swing something $400k. That's a little out of the price range. However I will say like MM has addressed I was thinking along the lines of something with good school district but like say 30-60 minutes out that many people commuting into the city would prefer to not live in because the commute would be long.

So I think we need to reevaluate if it's worth staying where we are or making a huge change.

Is it worth giving up a job he likes? What do people do about private health insurance? MM how do you like buying your own plan? I know CA regulates and is one of the cheapest. If we have a third kid I won't move until we have it because I want the medical care under our group plan.

And yes we do pay a lot in taxes. Our state taxes as well eat up a good chunk so when all said and done.

[MonkeyMama]

Is it worth giving up a job he likes? What do people do about private health insurance? MM how do you like buying your own plan? I know CA regulates and is one of the cheapest. If we have a third kid I won't move until we have it because I want the medical care under our group plan.

I don't think CA is one of the cheapest. My experience is its pricey due to the cost of living in general.

I was going to comment on that, but forgot. I have always had a private plan and was fine for maternity (we paid nothing out of pocket?). That said, I understand not wanting to take the risk (missing something when you shop plans) and being comfortable with what you have. I also don't think waiting a couple of more years is a bad thing.

Private insurance just means I don't have to deal with all the employer insurance bull crap. My insurance won't go up 1000% just because I decide to retire early (or if I am unemployed).

The reason I got private insurance, was because it was both cheaper and better than anything I have ever been offered by an employer. But the plus for the long run is I don't have to keep my job so I can afford my insurance - that kind of thing. & we are on track to early retire. Our insurance won't go up if we retire - it would be a non-event for insurance purposes.

OF course, Obamacare might buy you more options too. Is ideal for the early retiree or semi-retiree. So another reason to wait out a couple of more years and see what happens with that.

[jIM_Ohio]

You don't work, he does. That means his input into his job, which is providing you all these numbers is worth more than your opinions of what you want, where you want etc...

My career change ended my marriage, I would strongly advise to accept where you are in life, it will lead to more happiness than some other criteria which you want.

A few points, none of your kids are in school, yet you state you live in a good school district- what is the house price buying you now? It might be buying you something in future, but it means little now, correct?

Careers take turns, and my opinion is the ages of 25-40 is when people's lives change most (get a job, get married, have kids), and I would suggest either making move before kids start school, or making the move part of a retirement plan after kids leave house.

As for you returning to work, I would suggest getting experience before you move. It will be easier to use your local network to find a job than people which don't know you.

[TBH]

You don't work, he does. That means his input into his job, which is providing you all these numbers is worth more than your opinions of what you want, where you want etc...

I disagree. I think it's important that he be happy with his work, but HER work (managing the kids and the house and the finances) is enabling him to do his work. She gets an equal vote.

I think, though, unless she's really unhappy with their lives it's worth staying where they are just because he loves his job so much and it sounds like they can easily afford to live the way they do and save aggressively.

[TBH]

I very much agree with the Money Mustache philosophy - is how my parents retired. You already have 15 x income or so saved and that will only compound over the decades. I think in two years time you would be in a fine position to "work to live". You will have already saved up enough to retire very comfortably (if you let your retirement compound to full retirement age).

Love this idea of "working to live." I assume that means you have saved enough to just manage your investments for the future, and all you need right now is to earn enough to pay current living expenses. Right?

I wonder if there are rules of thumb about how much you need in order to do this. It's different from early retirement, because it doesn't mean stopping working. It just means only working part time or being able to do fun work that doesn't pay much.

[LivingAlmostLarge]

Did you have a separate maternity rider MM? It used to be a 1 year pre existing condition rider. I looked a long time ago.

Jim our house we bought because it's a 30 minute commute to work and good schools. We knew that when we bought with the bubble we may have had to stay put with kids. Our kids are 3 and 1 and we are definitely outgrowing out place but we are staying put through 3 kids because we can't afford quite to move. We are at the crossroads even if we stay put we have to move into a better laid out house even if same size 3/2 SFH. We have to compromise because affording a SFH will still add on another $150k minimum so I am trying to decide if it's worth struggling financially by going to work to earn more money in a HCOLA versus us just moving and looking at places cheaper. Yes his work he loves, but we moved from West Coast to East Coast in 2005, 3 months after we moved he lost his job and 2 weeks before our wedding. We stayed because I was in graduate school. Had he a crystal ball we wouldn't have moved.

I pray for him to lose his job and I know we'd pack up and move. He's lived through layoffs every year. But who knows? We live where we live because the commute and good schools so we sacrifice size for convenience. But reality has to come and we need to look at moving further to get a home.

TBH we made an agreement we wouldn't buy a home or make any big changes until we decide to stay put. Our kids are 3 and 1. I am willing to stay put a little longer but I want to move. I want to plan to move even without a job and take a chance.

The $400k price on a home is a bit of a crimp I doubt we could afford. I don't know how to wrangle that.

[TBH]

TBH we made an agreement we wouldn't buy a home or make any big changes until we decide to stay put. Our kids are 3 and 1. I am willing to stay put a little longer but I want to move. I want to plan to move even without a job and take a chance.

Sounds like moving back may be best for all, it's just a question of when.

[MonkeyMama]

Did you have a separate maternity rider MM? It used to be a 1 year pre existing condition rider. I looked a long time ago.

No. I bought the insurance long before I had kids, and it included maternity. (It was just converting the policy I already had over to a private plan. If it had a 1-year clause I had no idea - wasn't planning to have kids at the time so it wasn't anything I checked. I am confident it probably covered maternity).

That was over 15 years ago so don't take my experience as anything useful.

[MonkeyMama]

Love this idea of "working to live." I assume that means you have saved enough to just manage your investments for the future, and all you need right now is to earn enough to pay current living expenses. Right?

I wonder if there are rules of thumb about how much you need in order to do this. It's different from early retirement, because it doesn't mean stopping working. It just means only working part time or being able to do fun work that doesn't pay much.

Yes, exactly. Have you ever read the Money Mustache blog?

This article sums up the concept pretty well:

http://www.mrmoneymustache.com/2012/05/14/first-retire-then-get-rich/

I'd maybe think MMM was crazy, but is a lot of what we experienced with my spouse "retiring" in his early 20s and it sums up my parents' retirement pretty well.