Many people are convinced that moving out of California is a great way to ensure your retirement savings will last the rest of your life, without having to sacrifice your lifestyle. If you are considering relocating out of California, there are significant factors to consider. Here are a few of them:
Housing Costs
A lot of us have friends or family who have moved out of state and purchased a home for a fraction of what it would cost in California. We've marveled at their acres of land and square footage, wondering if we, too, could parlay our comparatively-modest family home into something bigger and better in another state. When considering a move to get more "bang for your buck," it is important to look at all the other financial impacts homeownership can create. Even though the cost of a home may be lower elsewhere, thoughtfully consider how much you can really save. Increased size often means increased upkeep.
The Weather
Excessive heat, humidity, cold, and snow are common in other states. Take into consideration that there may be a significant increase in your utility bills when living in a state which has less temperate weather than California. Bad weather will also impact your ability to go out or travel during certain times of the year, which can be an adjustment for anyone who is used to year-round access to the outdoors. Natural disasters are also something to think about. Those of us in California live will the real possibility of an earthquake happening at any time. In other parts of the country, hurricanes, tornadoes, floods, and damaging winds and hail can - and do - occur.
Taxes and Other Expenses
Many states have lower income, property, sales, and gas taxes than California. If you have a large income and are able to eliminate or significantly lower your state income tax while maintaining that income, you will undoubtably notice an increase in your bottom line. In fact, lowering tax burdens and cheaper housing costs are the primary reasons why California residents are choosing to relocate. On the other hand, you should expect other expenses like cars, insurance, entertainment, and food to be similar or even higher than in California.
Health Benefits
Sunshine, the beach, mountain air, and more are just some of the reasons people choose to move to California and continue to live here. A study by the CDC found that Californians have a lower rate of depression and anxiety than people do in many other states. And the ability to indulge in hiking, biking, and other outdoor activities is also a factor which contributes to Californian’s overall better health. Before you move, take a look at the medical resources in your chosen location. Access to quality healthcare and recreation is important.
The Big Picture
For some people, the financial considerations may be ample, driving their desire to relocate. But for many, the bottom-line financial impact is less significant. Experts say that anyone considering a move to a new state should consider the impact on family and friends and your individual lifestyle preferences, in addition to the cost of living.
Make Your Decision Based on Research
Moving is a significant undertaking with major considerations for your welfare and happiness. That’s why if you’re serious about moving out of California, we suggest spending an extended vacation in places where you’re considering. See if you like it. Get a sense of the local culture. See what it’s like to actually live there during different times of the year.
And definitely seek the advice of a financial professional. Engage someone you trust to evaluate the real financial impact of such a move so you can make a more informed decision.
At Village Wealth Advisors, we help clients develop a plan for living followed by a plan to fund it. From financial planning to investment management, during stable or unstable markets….our expertise will help you live worry free.
"All opinions and estimates constitute Village Wealth Advisors’ judgment as of the date of this communication and are subject to change without notice. Village Wealth Advisors does not warrant that the information will be free from error. The information should not be relied upon for purposes of transacting securities or other investments."