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Geographic Arbitrage within the US
Posted on 8/6/23 at 4:58 pm
Posted on 8/6/23 at 4:58 pm
There are a lot of recent topics about saving for retirement, and I know there are a few recurring advocates of retiring (or accumulating wealth) overseas. Is anyone factoring geographic arbitrage (specifically within the US) into their plans?
This may be less drastic than planning to move to Costa Rica for example, but I’m wondering how feasible it is to incorporate a move from HCOL -> LCOL into retirement planning. I feel like it’s a possible solution to limited employment/advancement opportunities in a LCOL area, while making more temporary the impact of higher housing costs. I could see schools/education going both ways, but I would bet on better educational opportunities and peer groups in HCOL areas.
I can see a few probable drawbacks. You’d be basically intending to distance yourself from any friend groups developed locally prior to retirement. If you have kids, it’s possible that you’re establishing roots for them in a place you don’t intend to be when they’re possibly raising your grandchildren. Distance from family is probably more of a case-by-case issue, but definitely relevant for those with family members concentrated in a LCOL area.
This may be less drastic than planning to move to Costa Rica for example, but I’m wondering how feasible it is to incorporate a move from HCOL -> LCOL into retirement planning. I feel like it’s a possible solution to limited employment/advancement opportunities in a LCOL area, while making more temporary the impact of higher housing costs. I could see schools/education going both ways, but I would bet on better educational opportunities and peer groups in HCOL areas.
I can see a few probable drawbacks. You’d be basically intending to distance yourself from any friend groups developed locally prior to retirement. If you have kids, it’s possible that you’re establishing roots for them in a place you don’t intend to be when they’re possibly raising your grandchildren. Distance from family is probably more of a case-by-case issue, but definitely relevant for those with family members concentrated in a LCOL area.
7
Posted on 8/6/23 at 5:15 pm to Dead Mike
The problem is that many LCOL areas of the country are LCOL because they are dogshit and no one has any money.
I can see the argument for retiring in a lower cost country, where you can possibly cut your expenses while still living well in a desirable place to live/visit. I don't really see it within the US. Unless you're talking about moving from somewhere like DC/SF/LA/NY/Chicago etc where everywhere is lower cost of living by comparison.
I can see the argument for retiring in a lower cost country, where you can possibly cut your expenses while still living well in a desirable place to live/visit. I don't really see it within the US. Unless you're talking about moving from somewhere like DC/SF/LA/NY/Chicago etc where everywhere is lower cost of living by comparison.
Posted on 8/6/23 at 5:37 pm to Dead Mike
The biggest challenge is healthcare.
Young and retired... lcol probably doesn't have the healthcare issue.
But late 60s, 70s, and 80s... access to healthcare should be a primary concern.
The other side of the discussion is travel. If you travel a lot, home base doesn't matter so much where it is. Low tax and low cost of living could be a huge asset.
Young and retired... lcol probably doesn't have the healthcare issue.
But late 60s, 70s, and 80s... access to healthcare should be a primary concern.
The other side of the discussion is travel. If you travel a lot, home base doesn't matter so much where it is. Low tax and low cost of living could be a huge asset.
Posted on 8/6/23 at 5:42 pm to Dead Mike
quote:
You’d be basically intending to distance yourself from any friend groups developed locally prior to retirement. If you have kids, it’s possible that you’re establishing roots for them in a place you don’t intend to be when they’re possibly raising your grandchildren.
This is true.
Posted on 8/6/23 at 5:54 pm to Dead Mike
I will be moving from NJ married or divorced if that's what you are asking lol
Posted on 8/6/23 at 6:00 pm to Dead Mike
Arbitrage exists but have to make sure you’ll be able to have access to healthcare, things to do in retirement, etc. Move somewhere where you’ll be able to live out retirement on your terms.
However, I could understand someone wanting to move to LCOL area if they are trying to stretch retirement dollars.
I live in Dallas so I know I could live in smaller cities in Texas and housing would be less. However, proximity to restaurants, sporting events, concerts might not be as readily accessible if living in a tier 2, 3 or 4 city. There aren’t perfect decisions in life including retirement. Compromises.
However, I could understand someone wanting to move to LCOL area if they are trying to stretch retirement dollars.
I live in Dallas so I know I could live in smaller cities in Texas and housing would be less. However, proximity to restaurants, sporting events, concerts might not be as readily accessible if living in a tier 2, 3 or 4 city. There aren’t perfect decisions in life including retirement. Compromises.
Posted on 8/6/23 at 10:59 pm to Dead Mike
Like give up the Manhattan flat for a cabin in Tennessee?
Posted on 8/6/23 at 11:35 pm to Dead Mike
I do not. The goal for me is to not have to worry about or consider these factors so I guess I plan for a HCOL by default
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