I live in a high cost area also and recently retired. We moved here for family and a job and, like you, the majority of our immediate family live very close by. As we have been here over 2 decades now, we also have friends here. It's not a bad place to live, but the funny thing is that due to cost and various other reasons this is not somewhere I would have chosen to live, but for family. And nobody in the family really wants to be here either - except for everyone else. It's just where they grew up and put down roots. When we get together, everyone talks about the grass being greener elsewhere, but so far nobody has made a move and the families get larger and more entrenched. So it is a bit of a chicken and egg situation. Fortunately, we can afford to stay, but would rather not. And even if we stay in the area, staying in our current home is not practical for the long term. As we lived below our means and bought less house than we could afford years ago, a move in the area would likely wind up costing more as opposed to the "downsizing" most do after retirement. Again, we are fortunate that we could do this if necessary, but who likes to pay more money after retirement? Alas, I expect we will wind up moving in the area and paying more despite our constant dreaming about going to a less expensive, less populated area with a better climate. I see winter rentals in our future.
I don't think that the taxes are necessarily too high, but I do think that the tax system is inefficient, complicated and, in many cases, unfair and implemented to serve special interests or to promote political agendas.
The technical definition of net worth is all assets minus all liabilities. That's what it is, plain and simple, BUT, that number may have no practical benefit for someone, as you suggest. So people calculate their assets various ways depending on what is important for them to know. In my case, I look at several numbers. Are any of them "net worth"? I don't really care what the definition is, I care what the number tells me. One number is basically net worth in the technical sense, but I don't include tangible personal property (no furniture, cars, clothes, etc.). This is just so I have a general sense of estate value. Then I look at all liquid assets plus the value of my anticipated modest pension. That's the number I use to determine the value of assets for the purpose of my investment allocation. Do I have to include pension? No, but that's the way I do it. Interestingly, I don't include Social Security for this purpose. I could, but I don't. I do, however, include the value of Social Security (and pension) plus all liquid assets when calculating a projected safe withdrawal rate in retirement. None of the above calculations above is truly "net worth" based on the accepted definition. The media would do all of us a service by being very clear what they are reporting when they report about net worth as well as specifying where they are getting their figures from. I don't believe there is much consistency, notwithstanding the standard, agreed upon definition. Accordingly, I take the media reported average and median net worth figures with a grain of salt.
Thought provoking article. Would you mind sharing what percentage of your anticipated income needs/desires you intend to cover with annuities and at what age you expect to purchase them?
Comments
I live in a high cost area also and recently retired. We moved here for family and a job and, like you, the majority of our immediate family live very close by. As we have been here over 2 decades now, we also have friends here. It's not a bad place to live, but the funny thing is that due to cost and various other reasons this is not somewhere I would have chosen to live, but for family. And nobody in the family really wants to be here either - except for everyone else. It's just where they grew up and put down roots. When we get together, everyone talks about the grass being greener elsewhere, but so far nobody has made a move and the families get larger and more entrenched. So it is a bit of a chicken and egg situation. Fortunately, we can afford to stay, but would rather not. And even if we stay in the area, staying in our current home is not practical for the long term. As we lived below our means and bought less house than we could afford years ago, a move in the area would likely wind up costing more as opposed to the "downsizing" most do after retirement. Again, we are fortunate that we could do this if necessary, but who likes to pay more money after retirement? Alas, I expect we will wind up moving in the area and paying more despite our constant dreaming about going to a less expensive, less populated area with a better climate. I see winter rentals in our future.
Post: When relocation in retirement is not an option, not what you really want. By Dick Quinn
Link to comment from June 9, 2025
I don't think that the taxes are necessarily too high, but I do think that the tax system is inefficient, complicated and, in many cases, unfair and implemented to serve special interests or to promote political agendas.
Post: Are taxes too high? I don’t think so
Link to comment from May 31, 2025
The technical definition of net worth is all assets minus all liabilities. That's what it is, plain and simple, BUT, that number may have no practical benefit for someone, as you suggest. So people calculate their assets various ways depending on what is important for them to know. In my case, I look at several numbers. Are any of them "net worth"? I don't really care what the definition is, I care what the number tells me. One number is basically net worth in the technical sense, but I don't include tangible personal property (no furniture, cars, clothes, etc.). This is just so I have a general sense of estate value. Then I look at all liquid assets plus the value of my anticipated modest pension. That's the number I use to determine the value of assets for the purpose of my investment allocation. Do I have to include pension? No, but that's the way I do it. Interestingly, I don't include Social Security for this purpose. I could, but I don't. I do, however, include the value of Social Security (and pension) plus all liquid assets when calculating a projected safe withdrawal rate in retirement. None of the above calculations above is truly "net worth" based on the accepted definition. The media would do all of us a service by being very clear what they are reporting when they report about net worth as well as specifying where they are getting their figures from. I don't believe there is much consistency, notwithstanding the standard, agreed upon definition. Accordingly, I take the media reported average and median net worth figures with a grain of salt.
Post: Is your net worth, worth it and what’s in it? RDQ
Link to comment from October 29, 2024
Thought provoking article. Would you mind sharing what percentage of your anticipated income needs/desires you intend to cover with annuities and at what age you expect to purchase them?
Post: Built for Ease
Link to comment from May 1, 2021