Author Topic: Anyone rethinking LCOL areas during COVID?  (Read 12380 times)

JestJes

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Anyone rethinking LCOL areas during COVID?
« on: July 08, 2020, 09:54:43 AM »
I happily live in pretty high cost of living Massachusetts. I had always thought that I would stay here forever until I started following the FIRE movement.  Then real cost of living here started to weigh on me. Was I really willing to work longer so I can have the extra money needed to buy a home around here? I found myself looking at 100K mansions in Texas and the Carolina's vs the 1200 sft homes in mass for 300k.

All this doubt has went completely out the window with COVID-19. I live in one of the few states, where if I were to lose my job, I would have access to health care at free or reduced costs.

I understand for the already FIRED, this is not a problem, but what about those still building wealth? If I lost my job and health insurance, a extended hospital stay could easily bankrupt me. I guess you could just go bankrupt and start over but that just seems so risky to me.

Wondering what you guys think? I know for me, I've pretty much decided to stay put indefinitely. This pandemic has really highlighted for me how important it is to have a well funded and functioning state government. I don't plan to be unemployed or sick but I like to know that if that were to happen, my state wouldn't just leave me hanging like Florida will.

I understand others have different levels of risk tolerance and I understand I'm paying a premium for these safety nets.

I'm just wondering what other people think.

TheFrenchCat

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #1 on: July 08, 2020, 10:28:11 AM »
I live in a pretty lcol area, but it's in a Medicaid expanded state.  Which I'm very grateful for.  We did experience job loss about 3 years ago, and we were able to get free coverage without depleting our savings first.  Maybe something to consider when looking at particular areas.  There are some pretty hcol areas in my state, but for us, the trade off in potential increased income wasn't worth it.  Especially since we really enjoy the pretty rural area we live in.  If you really like where you live, I would see it as worth it to work longer for.  Plus, do you really want a 100k mansion?  I'd never want the upkeep and cleaning that comes with a large house.  But I just never personally saw the point in that much space unless the family's equally big.

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #2 on: July 08, 2020, 10:34:59 AM »
I don't disagree with you the importance of having a functioning government. However, you're not relying on just a functioning government. You are also relying on that government having the view that it has a responsibility to provide the safety net. An argument could be made that Florida or other states are acting logically, just with a different set of assumptions and values.

If you want to stay in MA, that's your choice. Just realize that it's less about the functionality of the government and more about the values of the government.

slappy

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #3 on: July 08, 2020, 10:43:13 AM »
I actually have never even considered this. Shame on me I guess. I live in Southern NH and the real cost of living weighs on me as well. My property taxes are $7k a year, and my house isn't even that nice. (Valued around 300k, bought for $160k several years ago. 1600 sq ft on two acres.) I have definitely found myself looking at those nice homes in less expensive areas. Wouldn't COBRA be an option in the event of a job loss? Not free, or even cheap, but better than bankruptcy I guess.

Paper Chaser

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #4 on: July 08, 2020, 11:13:45 AM »
I actually think COVID has made some see LCOLA in a more positive light as it's typically easier to socially distance. I'm seeing/hearing lots of stories about urban flight these days. Maybe people are tired of being stuck in cramped dwellings stacked on top of one another for months on end, or maybe they're trying to escape to locations with lower population density and hoping that it will reduce the chance of getting sick.

If you're worried about losing your job as a result of COVID, then I can understand healthcare being a primary consideration. Seems like most people are more worried about getting sick or having to spend tons of time in confined spaces with few outlets. Especially those who can work remotely.

JestJes

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #5 on: July 08, 2020, 11:16:38 AM »
I don't disagree with you the importance of having a functioning government. However, you're not relying on just a functioning government. You are also relying on that government having the view that it has a responsibility to provide the safety net. An argument could be made that Florida or other states are acting logically, just with a different set of assumptions and values.

If you want to stay in MA, that's your choice. Just realize that it's less about the functionality of the government and more about the values of the government.

You're right the money with this. I want my tax dollars to go to supporting fellow citizens in my state, not billionaires. I hadn't considered that I wouldn't be a constituent of my states government by just being a citizen. Its a sharp, sad contrast.

JestJes

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #6 on: July 08, 2020, 11:19:49 AM »
I actually have never even considered this. Shame on me I guess. I live in Southern NH and the real cost of living weighs on me as well. My property taxes are $7k a year, and my house isn't even that nice. (Valued around 300k, bought for $160k several years ago. 1600 sq ft on two acres.) I have definitely found myself looking at those nice homes in less expensive areas. Wouldn't COBRA be an option in the event of a job loss? Not free, or even cheap, but better than bankruptcy I guess.

Cobra would be an option if you can afford it. I'm relatively new on my FIRE Journey, starting out with a negative net worth and slowly building over time.

But Either way, I love the North East. Not thinking about leaving here any time soon.

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #7 on: July 08, 2020, 11:47:19 AM »
Related Question:  When we talk about HCOL/LCOL are we really just talking about the price of a house (and related taxes) or rent?  I know the calculators out there talk about multiple factors but its hard to see them as significant to me (well, parking/subway transport was pretty costly in my memories from city living maybe).

I hated city life and changed my work situation to a remote one long ago with the added benefit of making big city money with small town expenses.  I even offered to take a pay cut for the remote work option (which work jumped at, as they also saved the expense of office space/equipment) as it was still more money than any small town position would have paid me.

tipster350

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #8 on: July 08, 2020, 12:27:11 PM »
What is not explicitly stated is that the HCOL areas are mostly in blue states, which have better safety nets.

I moved from VHCOL area (Bay Area CA) to a MHCOL area in a swing state leaning blue (PA). I think it's a decent option. We have Medicaid expansion and some other advantages, but lack in other arenas.  Overall I'm satisfied with the trade offs involved.

Edited to add that this is as far as I am willing to go with the COL trade offs. The VLCOL areas generally lack quality medical services and other advantages or amenities that I think are important, especially as I age. I want to be where talented professionals want to be.
« Last Edit: July 08, 2020, 12:34:05 PM by tipster350 »

fell-like-rain

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #9 on: July 08, 2020, 12:43:02 PM »
As another Masshole I have had a lot of similar thoughts recently. A sane government and healthcare that costs hundreds instead of thousands per month are pretty big draws. I’m in metro Boston though which is even worse for housing prices- I don’t think 300k houses even exist inside of I95.

To be fair, there are plenty of areas in MA where you can find a house that’s more in the 150-200k range. Around Springfield, the south shore, a lot of small towns once you’re west of Worcester... there’s definitely affordable areas, they just aren’t sexy.

MudPuppy

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #10 on: July 08, 2020, 01:04:16 PM »
The lack of access to healthcare in the US is significantly delaying my retirement date. I estimate that without having to worry about insurance I could cut my time to RE in half. I’m 31 now, likely not reaching FIRE until ~50.


HOWEVER, I would still not want to live in a more population dense area as a trade off.

Alternatepriorities

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #11 on: July 08, 2020, 01:18:35 PM »
Covid has made me even more thankful for my lower cost of living area with social distancing built in and less interference by the government. I had a conversation earlier this week with a friend from NJ. Her property tax alone is almost double my entire house payment including tax and insurance! If I lost employer health coverage I could buy a lot of insurance for the extra $18k a year in property tax! Additionally when the time comes to care for my aging farther, here I can just build a small cabin on my property so he'll still have his own place. It would take more time to file the paperwork in most places than it will take me to build what he wants/needs here. Perhaps in a more civilized place i could just hand the responsibility for his care to the state instead, but is that really better for anyone?  Admittedly, there are some who use the lack of regulations to fill their yards with treasured trash or build without regard to modern standards but I don't and I still enjoy the freedom of living here.

Another way to phrase the question might be: Is it worth trading a known portion of my life now for insurance against and unknown risk in the future. We all make that decision every day in one way or another especially on this forum. Those who prefer certainty work "OMY" in jobs they don't like and those with the highest risk tolerance sometimes use geographic arbitrage to the extent it requires learning a new language rather than work one more day.

Alternatepriorities

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #12 on: July 08, 2020, 01:32:16 PM »
Related Question:  When we talk about HCOL/LCOL are we really just talking about the price of a house (and related taxes) or rent?  I know the calculators out there talk about multiple factors but its hard to see them as significant to me (well, parking/subway transport was pretty costly in my memories from city living maybe).

Your question gets complex quickly in AK. Our cost of housing is higher than say the midwest, but lower than places most people call HCOL. Our food is pretty much more expensive than anywhere else in the country. However with no state taxes (sales or income) a large part of that cost is offset and small expensive items like computers and REI gear is actually cheaper in Alaska. When you leave the road system and move to "the bush" it gets even most difficult to reconcile milk that costs $22/gallon with moose meat that is "free" and for people who own their homes (often very Mustachian houses) no property tax and no insurance premiums. Of course electricity might cost you $0.67 a kWh...

Cranky

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #13 on: July 08, 2020, 02:05:14 PM »
I’m pretty happy to be in a LCOL area right now. I’m delighted that in a financially stressful time, my money goes far. I’m delighted not to be cooped up in a city. Instead, I’m taking long walks, enjoying the trails in the parks, and tending my garden.

We have hospitals and everything! LOL

JestJes

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #14 on: July 08, 2020, 02:09:31 PM »
What is not explicitly stated is that the HCOL areas are mostly in blue states, which have better safety nets.

I moved from VHCOL area (Bay Area CA) to a MHCOL area in a swing state leaning blue (PA). I think it's a decent option. We have Medicaid expansion and some other advantages, but lack in other arenas.  Overall I'm satisfied with the trade offs involved.

Edited to add that this is as far as I am willing to go with the COL trade offs. The VLCOL areas generally lack quality medical services and other advantages or amenities that I think are important, especially as I age. I want to be where talented professionals want to be.

Its a trade off for sure. I grew up in a low cost of living area and I experience it can be limiting in some ways. If you don't have someone who is actively encouraging you to engage with the world, its easy to develop a limited view of things. I.E. this is how things have always been done. Of course if you have an engaged family, this can be mitigated but I didn't have that luxury.


JestJes

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #15 on: July 08, 2020, 02:12:41 PM »
As another Masshole I have had a lot of similar thoughts recently. A sane government and healthcare that costs hundreds instead of thousands per month are pretty big draws. I’m in metro Boston though which is even worse for housing prices- I don’t think 300k houses even exist inside of I95.

To be fair, there are plenty of areas in MA where you can find a house that’s more in the 150-200k range. Around Springfield, the south shore, a lot of small towns once you’re west of Worcester... there’s definitely affordable areas, they just aren’t sexy.

I know and honestly it seems like a lot of bang for the buck. Like state taxes are something like 5%, right? Seems like a good deal to have a reasonable safety net .

JestJes

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #16 on: July 08, 2020, 02:17:39 PM »
Covid has made me even more thankful for my lower cost of living area with social distancing built in and less interference by the government. I had a conversation earlier this week with a friend from NJ. Her property tax alone is almost double my entire house payment including tax and insurance! If I lost employer health coverage I could buy a lot of insurance for the extra $18k a year in property tax! Additionally when the time comes to care for my aging farther, here I can just build a small cabin on my property so he'll still have his own place. It would take more time to file the paperwork in most places than it will take me to build what he wants/needs here. Perhaps in a more civilized place i could just hand the responsibility for his care to the state instead, but is that really better for anyone?  Admittedly, there are some who use the lack of regulations to fill their yards with treasured trash or build without regard to modern standards but I don't and I still enjoy the freedom of living here.

Another way to phrase the question might be: Is it worth trading a known portion of my life now for insurance against and unknown risk in the future. We all make that decision every day in one way or another especially on this forum. Those who prefer certainty work "OMY" in jobs they don't like and those with the highest risk tolerance sometimes use geographic arbitrage to the extent it requires learning a new language rather than work one more day.

Great Post. I guess I am just more risk adverse and have different skills. I would be much better a filling out paperwork then building a cabin on my own.
Its good to see the other side of the argument though.

ageless-human

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #17 on: July 08, 2020, 03:13:39 PM »
I think the bankruptcy risk for health cost related issues is overstated. Your retirement accounts are typically excluded from bankruptcy and some states even have an unlimited or very generous homestead exemption. It's unlikely you completely lose access to insurance even in the event of job loss.

I could be wrong though, what am I missing?

Buffaloski Boris

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #18 on: July 08, 2020, 03:13:49 PM »
Personal finances are exactly that, personal.  The solution for me is not a HCOL state and not the northeast.  Medical is pretty much a nonissue, so when we finally leave where we're at, we're free to choose a LCOL area that's more to our taste. 

Alternatepriorities

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #19 on: July 08, 2020, 04:38:30 PM »
Covid has made me even more thankful for my lower cost of living area with social distancing built in and less interference by the government. I had a conversation earlier this week with a friend from NJ. Her property tax alone is almost double my entire house payment including tax and insurance! If I lost employer health coverage I could buy a lot of insurance for the extra $18k a year in property tax! Additionally when the time comes to care for my aging farther, here I can just build a small cabin on my property so he'll still have his own place. It would take more time to file the paperwork in most places than it will take me to build what he wants/needs here. Perhaps in a more civilized place i could just hand the responsibility for his care to the state instead, but is that really better for anyone?  Admittedly, there are some who use the lack of regulations to fill their yards with treasured trash or build without regard to modern standards but I don't and I still enjoy the freedom of living here.

Another way to phrase the question might be: Is it worth trading a known portion of my life now for insurance against and unknown risk in the future. We all make that decision every day in one way or another especially on this forum. Those who prefer certainty work "OMY" in jobs they don't like and those with the highest risk tolerance sometimes use geographic arbitrage to the extent it requires learning a new language rather than work one more day.

Great Post. I guess I am just more risk adverse and have different skills. I would be much better a filling out paperwork then building a cabin on my own.
Its good to see the other side of the argument though.

Thanks! I am thankful for all the people who are happy living in cities both for the space it saves and the innovations than comes with dense population centers. The closest I've managed is Albuquerque for eight years, but I prefer the quiet out here... I'm also thankful for the people who like to farm. Life would be significantly less enjoyable if I had to milk my own cow 365 days a year.

slappy

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #20 on: July 09, 2020, 06:57:35 AM »
I think the bankruptcy risk for health cost related issues is overstated. Your retirement accounts are typically excluded from bankruptcy and some states even have an unlimited or very generous homestead exemption. It's unlikely you completely lose access to insurance even in the event of job loss.

I could be wrong though, what am I missing?

I wonder this all the time, actually. My understanding is that hospitals/billing departments are pretty willing to arrange payment plans. I've always been a little confused about this, but I know the stats say that most bankruptcies are a result of medical expenses.

Monkey Uncle

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #21 on: July 09, 2020, 07:36:56 AM »
I think the bankruptcy risk for health cost related issues is overstated. Your retirement accounts are typically excluded from bankruptcy and some states even have an unlimited or very generous homestead exemption. It's unlikely you completely lose access to insurance even in the event of job loss.

I could be wrong though, what am I missing?

I wonder this all the time, actually. My understanding is that hospitals/billing departments are pretty willing to arrange payment plans. I've always been a little confused about this, but I know the stats say that most bankruptcies are a result of medical expenses.

If you lose your employer-sponsored health insurance in the US and you make enough money to stay out of expanded Medicaid territory, you can sign up for an ACA plan.  Wouldn't unemployment compensation be enough to keep you in ACA territory in most cases?  I guess if your unemployment is based on a minimum wage job, maybe not, but it doesn't sound like that is the OP's situation.  If you live in a Medicaid expansion state, even that problem goes away.  Yes, there is some risk that the ACA may be yanked away from us, but I think that risk is fading as more time passes and the law gets more ingrained in our society.

I live in a LCOL area and am lucky enough to have at least one great option for health insurance on the ACA exchange.  I'm FIREd, so my tax return makes me look like a poor person, which keeps the cost way down.  I don't intend to let my MAGI dip low enough to push me into expanded Medicaid, but it is there for me if that ever happens.  Luckily our state Dems signed WV on to expanded Medicaid right before they lost the legislature to the Repubs.

Cranky

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #22 on: July 09, 2020, 08:10:32 AM »
Pre ACA many health insurance plans had no cap on what you could be required to pay out of pocket, so your share of the bill for a major illness or injury could be huge. Factor in that a major illness or injury often takes you out of work for a very long time. That’s a combination that can push people into a financial crisis.

JestJes

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #23 on: July 09, 2020, 09:10:01 AM »
I think the bankruptcy risk for health cost related issues is overstated. Your retirement accounts are typically excluded from bankruptcy and some states even have an unlimited or very generous homestead exemption. It's unlikely you completely lose access to insurance even in the event of job loss.

I could be wrong though, what am I missing?

I wonder this all the time, actually. My understanding is that hospitals/billing departments are pretty willing to arrange payment plans. I've always been a little confused about this, but I know the stats say that most bankruptcies are a result of medical expenses.

If you lose your employer-sponsored health insurance in the US and you make enough money to stay out of expanded Medicaid territory, you can sign up for an ACA plan.  Wouldn't unemployment compensation be enough to keep you in ACA territory in most cases?  I guess if your unemployment is based on a minimum wage job, maybe not, but it doesn't sound like that is the OP's situation.  If you live in a Medicaid expansion state, even that problem goes away.  Yes, there is some risk that the ACA may be yanked away from us, but I think that risk is fading as more time passes and the law gets more ingrained in our society.

I live in a LCOL area and am lucky enough to have at least one great option for health insurance on the ACA exchange.  I'm FIREd, so my tax return makes me look like a poor person, which keeps the cost way down.  I don't intend to let my MAGI dip low enough to push me into expanded Medicaid, but it is there for me if that ever happens.  Luckily our state Dems signed WV on to expanded Medicaid right before they lost the legislature to the Repubs.

It could be that I see people get caught in this trap pretty often through my line of work. I work in long term disability and I can't tell you how often I speak to someone who worked for a company for 20 years, got cancer, and were termed after 12 weeks of FMLA. Now their payments are $1,000 a month and they make 60% of their previous monthly earnings.

I guess they should have saved more during their life time but its heart breaking none the less.

ageless-human

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #24 on: July 09, 2020, 09:21:04 AM »
I think the bankruptcy risk for health cost related issues is overstated. Your retirement accounts are typically excluded from bankruptcy and some states even have an unlimited or very generous homestead exemption. It's unlikely you completely lose access to insurance even in the event of job loss.

I could be wrong though, what am I missing?

I wonder this all the time, actually. My understanding is that hospitals/billing departments are pretty willing to arrange payment plans. I've always been a little confused about this, but I know the stats say that most bankruptcies are a result of medical expenses.

If you lose your employer-sponsored health insurance in the US and you make enough money to stay out of expanded Medicaid territory, you can sign up for an ACA plan.  Wouldn't unemployment compensation be enough to keep you in ACA territory in most cases?  I guess if your unemployment is based on a minimum wage job, maybe not, but it doesn't sound like that is the OP's situation.  If you live in a Medicaid expansion state, even that problem goes away.  Yes, there is some risk that the ACA may be yanked away from us, but I think that risk is fading as more time passes and the law gets more ingrained in our society.

I live in a LCOL area and am lucky enough to have at least one great option for health insurance on the ACA exchange.  I'm FIREd, so my tax return makes me look like a poor person, which keeps the cost way down.  I don't intend to let my MAGI dip low enough to push me into expanded Medicaid, but it is there for me if that ever happens.  Luckily our state Dems signed WV on to expanded Medicaid right before they lost the legislature to the Repubs.

It could be that I see people get caught in this trap pretty often through my line of work. I work in long term disability and I can't tell you how often I speak to someone who worked for a company for 20 years, got cancer, and were termed after 12 weeks of FMLA. Now their payments are $1,000 a month and they make 60% of their previous monthly earnings.

I guess they should have saved more during their life time but its heart breaking none the less.

I think my larger point has been missed. The access/cost of insurance aside, I'm saying that a "bankruptcy" doesn't ruin financial independence if you keep your assets in bankruptcy protected vehicles. If you keep much of your assets in your home, 401k, IRA, etc., even if you had to file for bankruptcy, your life largely wouldn't change. It would mean a few years of loss of access to credit, but I don't think it's the doomsday situation many seem to think it is because your nest egg is kept in place.

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #25 on: July 09, 2020, 09:25:25 AM »
I could be wrong though, what am I missing?

The part where they let you die. You are only guaranteed "stabilizing care." If you can't pay you won't necessarily* get cancer treatment, for example.

* - Some faith based hospitals may still treat you.

JestJes

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #26 on: July 09, 2020, 09:46:07 AM »
I think the bankruptcy risk for health cost related issues is overstated. Your retirement accounts are typically excluded from bankruptcy and some states even have an unlimited or very generous homestead exemption. It's unlikely you completely lose access to insurance even in the event of job loss.

I could be wrong though, what am I missing?

I wonder this all the time, actually. My understanding is that hospitals/billing departments are pretty willing to arrange payment plans. I've always been a little confused about this, but I know the stats say that most bankruptcies are a result of medical expenses.

If you lose your employer-sponsored health insurance in the US and you make enough money to stay out of expanded Medicaid territory, you can sign up for an ACA plan.  Wouldn't unemployment compensation be enough to keep you in ACA territory in most cases?  I guess if your unemployment is based on a minimum wage job, maybe not, but it doesn't sound like that is the OP's situation.  If you live in a Medicaid expansion state, even that problem goes away.  Yes, there is some risk that the ACA may be yanked away from us, but I think that risk is fading as more time passes and the law gets more ingrained in our society.

I live in a LCOL area and am lucky enough to have at least one great option for health insurance on the ACA exchange.  I'm FIREd, so my tax return makes me look like a poor person, which keeps the cost way down.  I don't intend to let my MAGI dip low enough to push me into expanded Medicaid, but it is there for me if that ever happens.  Luckily our state Dems signed WV on to expanded Medicaid right before they lost the legislature to the Repubs.

It could be that I see people get caught in this trap pretty often through my line of work. I work in long term disability and I can't tell you how often I speak to someone who worked for a company for 20 years, got cancer, and were termed after 12 weeks of FMLA. Now their payments are $1,000 a month and they make 60% of their previous monthly earnings.

I guess they should have saved more during their life time but its heart breaking none the less.

I think my larger point has been missed. The access/cost of insurance aside, I'm saying that a "bankruptcy" doesn't ruin financial independence if you keep your assets in bankruptcy protected vehicles. If you keep much of your assets in your home, 401k, IRA, etc., even if you had to file for bankruptcy, your life largely wouldn't change. It would mean a few years of loss of access to credit, but I don't think it's the doomsday situation many seem to think it is because your nest egg is kept in place.

I think I understand what you are saying. Bankruptcy isn't such a big deal and you can totally come back from it, right?

My experience isn't that people get the care they need and then go bankrupt. Typically I see people going without care until life saving intervention is needed. Most hospitals aren't going to preform a $500,000 surgery on you if you are not insured unless your death is imminent and maybe not even then.

I will fulling admit my fears are a little biased based on my job. Whats that bias where you see something more so you think its a bigger threat then it is. Like Fire Fighters fear fire more than car crashes even if they are less likely to happen.

Alternatepriorities

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #27 on: July 09, 2020, 10:57:04 AM »

My experience isn't that people get the care they need and then go bankrupt. Typically I see people going without care until life saving intervention is needed. Most hospitals aren't going to preform a $500,000 surgery on you if you are not insured unless your death is imminent and maybe not even then.


One major problem with the entire health care system in the US that neither political side seems remotely interested in touching is why the heck does the surgery cost that much in the first place? More importantly why does it cost different amounts depending on who is paying. Closer to the Covid topic at hand is this article on the pricing of a potential treatment: https://www.statnews.com/2020/06/29/gilead-announces-remdesivir-price-covid-19/

Key quotes:

For all governments in the developed world, including the U.S. government’s Indian Health Services and the Department of Veterans Affairs, Gilead will charge $2,340 for a five-day course. U.S. insurers, in addition to Medicare and Medicaid, will pay 33% more, or $3,120. Countries in the developing world will get the drug at greatly reduced prices through generic manufacturers to which Gilead has licensed production.
....
One group that may not be happy with Gilead’s decision: investors. In a series of notes to investors, SVB Leerink analyst Geoffrey Porges recommended buying Gilead shares and said that he believed annual sales of remdesivir could reach $6.7 billion next year. Porges assumed prices of $5,000 per course in the U.S., $4,000 per course in Europe, and $2,000 per course in other markets.


Why should my insurance and government (and by extension me through premiums/taxes) pay 1/3 more than my friends in France or my Native Alaskan friends for the exact same drug?

Fishindude

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #28 on: July 09, 2020, 11:30:08 AM »
For what you could save on housing, taxes and other expenses in going from a HCOLA to a LCOLA you could easily purchase a first rate ACA health insurance plan.

ctuser1

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #29 on: July 09, 2020, 11:32:34 AM »
...I'm saying that a "bankruptcy" doesn't ruin financial independence if you keep your assets in bankruptcy protected vehicles. If you keep much of your assets in your home, 401k, IRA, etc., even if you had to file for bankruptcy, your life largely wouldn't change.

Bankruptcy protection for IRA's is a nuanced topic:
https://www.investopedia.com/articles/personal-finance/040716/which-retirement-funds-are-protected-creditors.asp

tl;dr
1. Generally employer 401k's (i.e. ERISA plans) are better protected than rollover-IRA or trad-IRA.
2. It depends a lot on state laws.
3. Nobody, nowhere will protect even your employer-401k from spouse with QDRO, child support, IRS, government fines/penalties, or civil/criminal court judgements.
 

Dee18

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #30 on: July 09, 2020, 12:11:18 PM »
I live in a LOCOL area in a red state with soaring virus numbers state wide, a governor who will not require masks or close bars, and a majority of the population that is pretending we are not in a serious situation.  As soon as we have a vaccine I am going house hunting in a state that acted responsibly during the pandemic.

Monkey Uncle

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #31 on: July 09, 2020, 12:26:23 PM »
I think the bankruptcy risk for health cost related issues is overstated. Your retirement accounts are typically excluded from bankruptcy and some states even have an unlimited or very generous homestead exemption. It's unlikely you completely lose access to insurance even in the event of job loss.

I could be wrong though, what am I missing?

I wonder this all the time, actually. My understanding is that hospitals/billing departments are pretty willing to arrange payment plans. I've always been a little confused about this, but I know the stats say that most bankruptcies are a result of medical expenses.

If you lose your employer-sponsored health insurance in the US and you make enough money to stay out of expanded Medicaid territory, you can sign up for an ACA plan.  Wouldn't unemployment compensation be enough to keep you in ACA territory in most cases?  I guess if your unemployment is based on a minimum wage job, maybe not, but it doesn't sound like that is the OP's situation.  If you live in a Medicaid expansion state, even that problem goes away.  Yes, there is some risk that the ACA may be yanked away from us, but I think that risk is fading as more time passes and the law gets more ingrained in our society.

I live in a LCOL area and am lucky enough to have at least one great option for health insurance on the ACA exchange.  I'm FIREd, so my tax return makes me look like a poor person, which keeps the cost way down.  I don't intend to let my MAGI dip low enough to push me into expanded Medicaid, but it is there for me if that ever happens.  Luckily our state Dems signed WV on to expanded Medicaid right before they lost the legislature to the Repubs.

It could be that I see people get caught in this trap pretty often through my line of work. I work in long term disability and I can't tell you how often I speak to someone who worked for a company for 20 years, got cancer, and were termed after 12 weeks of FMLA. Now their payments are $1,000 a month and they make 60% of their previous monthly earnings.

I guess they should have saved more during their life time but its heart breaking none the less.

I think my larger point has been missed. The access/cost of insurance aside, I'm saying that a "bankruptcy" doesn't ruin financial independence if you keep your assets in bankruptcy protected vehicles. If you keep much of your assets in your home, 401k, IRA, etc., even if you had to file for bankruptcy, your life largely wouldn't change. It would mean a few years of loss of access to credit, but I don't think it's the doomsday situation many seem to think it is because your nest egg is kept in place.

I get your point, but it still is preferable to choose health insurance over bankruptcy if health insurance is available.  All I'm saying is that it usually is available in some form.

Monkey Uncle

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #32 on: July 09, 2020, 12:30:49 PM »
I think the bankruptcy risk for health cost related issues is overstated. Your retirement accounts are typically excluded from bankruptcy and some states even have an unlimited or very generous homestead exemption. It's unlikely you completely lose access to insurance even in the event of job loss.

I could be wrong though, what am I missing?

I wonder this all the time, actually. My understanding is that hospitals/billing departments are pretty willing to arrange payment plans. I've always been a little confused about this, but I know the stats say that most bankruptcies are a result of medical expenses.

If you lose your employer-sponsored health insurance in the US and you make enough money to stay out of expanded Medicaid territory, you can sign up for an ACA plan.  Wouldn't unemployment compensation be enough to keep you in ACA territory in most cases?  I guess if your unemployment is based on a minimum wage job, maybe not, but it doesn't sound like that is the OP's situation.  If you live in a Medicaid expansion state, even that problem goes away.  Yes, there is some risk that the ACA may be yanked away from us, but I think that risk is fading as more time passes and the law gets more ingrained in our society.

I live in a LCOL area and am lucky enough to have at least one great option for health insurance on the ACA exchange.  I'm FIREd, so my tax return makes me look like a poor person, which keeps the cost way down.  I don't intend to let my MAGI dip low enough to push me into expanded Medicaid, but it is there for me if that ever happens.  Luckily our state Dems signed WV on to expanded Medicaid right before they lost the legislature to the Repubs.

It could be that I see people get caught in this trap pretty often through my line of work. I work in long term disability and I can't tell you how often I speak to someone who worked for a company for 20 years, got cancer, and were termed after 12 weeks of FMLA. Now their payments are $1,000 a month and they make 60% of their previous monthly earnings.

I guess they should have saved more during their life time but its heart breaking none the less.

They're paying $1,000/mo for what type of insurance?  If they're paying that much for an ACA policy, then they aren't getting a premium tax credit, which means they must still be making a halfway decent salary.  It sucks to have to pay that much for health insurance, but living in a HCOLA vs. a LCOLA is not going to fix that situation.

slappy

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #33 on: July 09, 2020, 12:47:07 PM »
I think the bankruptcy risk for health cost related issues is overstated. Your retirement accounts are typically excluded from bankruptcy and some states even have an unlimited or very generous homestead exemption. It's unlikely you completely lose access to insurance even in the event of job loss.

I could be wrong though, what am I missing?

I wonder this all the time, actually. My understanding is that hospitals/billing departments are pretty willing to arrange payment plans. I've always been a little confused about this, but I know the stats say that most bankruptcies are a result of medical expenses.

If you lose your employer-sponsored health insurance in the US and you make enough money to stay out of expanded Medicaid territory, you can sign up for an ACA plan.  Wouldn't unemployment compensation be enough to keep you in ACA territory in most cases?  I guess if your unemployment is based on a minimum wage job, maybe not, but it doesn't sound like that is the OP's situation.  If you live in a Medicaid expansion state, even that problem goes away.  Yes, there is some risk that the ACA may be yanked away from us, but I think that risk is fading as more time passes and the law gets more ingrained in our society.

I live in a LCOL area and am lucky enough to have at least one great option for health insurance on the ACA exchange.  I'm FIREd, so my tax return makes me look like a poor person, which keeps the cost way down.  I don't intend to let my MAGI dip low enough to push me into expanded Medicaid, but it is there for me if that ever happens.  Luckily our state Dems signed WV on to expanded Medicaid right before they lost the legislature to the Repubs.

It could be that I see people get caught in this trap pretty often through my line of work. I work in long term disability and I can't tell you how often I speak to someone who worked for a company for 20 years, got cancer, and were termed after 12 weeks of FMLA. Now their payments are $1,000 a month and they make 60% of their previous monthly earnings.

I guess they should have saved more during their life time but its heart breaking none the less.

They're paying $1,000/mo for what type of insurance?  If they're paying that much for an ACA policy, then they aren't getting a premium tax credit, which means they must still be making a halfway decent salary.  It sucks to have to pay that much for health insurance, but living in a HCOLA vs. a LCOLA is not going to fix that situation.

My assumption was COBRA, for that amount.

kite

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #34 on: July 09, 2020, 01:57:00 PM »
I’m paying LCOL prices to live in a HCOL state.  These things exist.  No matter what state you are living in, there are working poor people in it.  You can live right along side them for very little money.  In some urban places, this becomes a popular idea and sets off gentrification.  Before too long, the LCOL gets a Starbucks and becomes a HCOL.  But still, there are low cost homes, even in NJ.  I know. I’m in one.  Six doors away from a housing project. Very few people with earnings similar to mine want to live so close to public housing, to landscapers who park their trailers in the street, to truck drivers who bring their rigs home at night an pull them into the yard.  My colleagues speak euphemistically about their desire to live among other professionals and they’ve got the fancier homes and higher property tax bills to show it.  I don’t have a single aspirational bone in my body.  So I’m living in extremely modest surroundings. 
COVID is already affecting demand for housing and it’s not going to settle down anytime soon.  People with means to flee densely populated HCOL’s are doing it. It will be interesting to see where the values shuffle around.  A year ago, I couldn’t imagine what would become of all the Boomer-owned McMansions since the conventional wisdom was that millennials all wanted to be in the city.  Maybe having a home big enough for a nice sized quarantine bubble of loved ones/roommates to live in with room for outdoor entertaining/exercise and some chickens is the way to go.     

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #35 on: July 09, 2020, 05:36:30 PM »
I’m paying LCOL prices to live in a HCOL state.  These things exist.  No matter what state you are living in, there are working poor people in it.  You can live right along side them for very little money.  In some urban places, this becomes a popular idea and sets off gentrification.  Before too long, the LCOL gets a Starbucks and becomes a HCOL.  But still, there are low cost homes, even in NJ.  I know. I’m in one.  Six doors away from a housing project. Very few people with earnings similar to mine want to live so close to public housing, to landscapers who park their trailers in the street, to truck drivers who bring their rigs home at night an pull them into the yard.  My colleagues speak euphemistically about their desire to live among other professionals and they’ve got the fancier homes and higher property tax bills to show it.  I don’t have a single aspirational bone in my body.  So I’m living in extremely modest surroundings. 
COVID is already affecting demand for housing and it’s not going to settle down anytime soon.  People with means to flee densely populated HCOL’s are doing it. It will be interesting to see where the values shuffle around.  A year ago, I couldn’t imagine what would become of all the Boomer-owned McMansions since the conventional wisdom was that millennials all wanted to be in the city.  Maybe having a home big enough for a nice sized quarantine bubble of loved ones/roommates to live in with room for outdoor entertaining/exercise and some chickens is the way to go.   

Except in maybe a couple of extremely urbanized states, there is always the rural areas for a lower cost of living. I truly hope that the trend to getting out of the cities sticks. The folks in the rural areas need the population and the money.
« Last Edit: July 09, 2020, 05:55:36 PM by Buffaloski Boris »

Pigeon

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #36 on: July 09, 2020, 05:52:21 PM »
I live in the Northeast, in a place with high taxes but relatively moderate real estate. I like it here and most very low COL places aren't somewhere I would want to live. I'm not moving.

Cranky

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #37 on: July 09, 2020, 06:15:28 PM »
What do you see as being different in a LCOL area? Because honestly, if I lived in Manhattan , I’d Do the same boring things every day. Why pay a premium price for housing?

TheFrenchCat

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #38 on: July 09, 2020, 06:41:26 PM »
I live in a LOCOL area in a red state with soaring virus numbers state wide, a governor who will not require masks or close bars, and a majority of the population that is pretending we are not in a serious situation.  As soon as we have a vaccine I am going house hunting in a state that acted responsibly during the pandemic.

Ugh, that's awful, I'm sorry you're living through that.  I'm now feeling lucky that my relatively rural area has been taking masks and distancing seriously, and that we have a governor who's responding appropriately.  Now if only our other-side-of-the-aisle legislature would stop trying to block him...

mm1970

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #39 on: July 09, 2020, 07:13:10 PM »
What do you see as being different in a LCOL area? Because honestly, if I lived in Manhattan , I’d Do the same boring things every day. Why pay a premium price for housing?
A few things, depending on specific circumstances.

The prior commenter said "very LCOL", so that will affect what is available and how you define that.

So let me define that as "where I live now" and "where I grew up"  (a very LCOL place).
1.  No jobs
2.  Red county. 
3.  Trump lovers
4.  Racist, almost 100% white
5.  Homophobic (a HS classmate of mine is a state representative and is very vocal about being anti_LGBTQ)
6.  30 minute drive to ...anything.  Grocery store, movie theater, hospital.  I can live without the theater or hospital.
7.  45 min to 2 hour drive to a hospital where you can get cancer treatment, for example.

So that's just a start, but the things that I like to DO during most of my time are run, go to the gym (no gyms in my home town), have potlucks (I would probably not get along with people in my home town, which is why I left), very little access to ethnic food.  There's a taco bell?  But no really.  I mostly cook at home, but it also means good luck finding ethnic groceries, like corn tortillas (I wish I was joking!)

Oh, and ticks. 

Many Very LCOL places are also very rural.  I don't like rural. 

scottish

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #40 on: July 09, 2020, 08:02:44 PM »
I live in a country with modern health care, funded by the government.    We can live where ever we want (in Canada) and not have to worry much about basic health care.     So that's not an issue.

We probably won't move to a lcol area though.   There are too many things that are only available in the city.

bogart

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #41 on: July 09, 2020, 08:43:15 PM »
I live in an MCOL near several top-notch hospitals (and associated medical care provision) and as I watch people (myself included) age, find this is a priority for me.  I like the area generally (and it's MCOL, not HCOL), so it's not like I'm wanting to leave but for ... , but still.

elaine amj

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #42 on: July 09, 2020, 09:03:53 PM »


We probably won't move to a lcol area though.   There are too many things that are only available in the city.

Genuinely curious - what kinds of things that are only available in the city are important to you?

I grew up in a big city but after living in a small city for over 20 years now I prize the quieter pace of living and really dislike the thought of ever living in a big city again. (So I am always fascinated with the reasons why ppl prefer big city life)

I have everything I need here in my small city and do visit the big city a few times a year and will pick up a few groceries and a couple of items it's harder to find where I live.

We did have to travel frequently to and even live part-time for 1.5 months in a larger city two hours away when DH needed specialized cancer treatment our city's doctors couldn't provide. That was a pain. But still happy with our choice to live here instead of there.

As for OPs original question - there was a time when we almost moved to the US (as in - goodbye everyone, we're leaving in 2 weeks). Ever since I have been happy with our decision to stay in Canada. Yes, there are many, many pros to living in the US (including higher income potential in DH's field and more opportunities for a variety of things) but I like Canada's wide social safety net and fully covered healthcare. This pandemic has only made that even clearer to me and I am happy we chose to stay.

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American GenX

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #43 on: July 09, 2020, 09:36:36 PM »
I live in LCOL area with excellent health care system, medicaid expansion (although I won't use it), better balance billing protections than most states.  Also, our COVID numbers are much better than most other states today.  My area never had many cases.  So, no, I'm not rethinking anything.

Cranky

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #44 on: July 10, 2020, 09:33:53 AM »
Yes, I live in a very LCOL area, and there are all kinds of people here. Diversity! Wealth! Poverty! Republicans! Democrats! Leftists! There are gyms and parks and libraries.

Is this my favorite place? No, the weather sucks (I hate winter) but that isn’t related to the cost of living.

I think some people don’t get out of their own neighborhoods too often.

bigblock440

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #45 on: July 10, 2020, 11:11:26 AM »
I’m paying LCOL prices to live in a HCOL state.  These things exist.  No matter what state you are living in, there are working poor people in it.  You can live right along side them for very little money.  In some urban places, this becomes a popular idea and sets off gentrification.  Before too long, the LCOL gets a Starbucks and becomes a HCOL.  But still, there are low cost homes, even in NJ.  I know. I’m in one.  Six doors away from a housing project. Very few people with earnings similar to mine want to live so close to public housing, to landscapers who park their trailers in the street, to truck drivers who bring their rigs home at night an pull them into the yard.  My colleagues speak euphemistically about their desire to live among other professionals and they’ve got the fancier homes and higher property tax bills to show it.  I don’t have a single aspirational bone in my body.  So I’m living in extremely modest surroundings. 
COVID is already affecting demand for housing and it’s not going to settle down anytime soon.  People with means to flee densely populated HCOL’s are doing it. It will be interesting to see where the values shuffle around.  A year ago, I couldn’t imagine what would become of all the Boomer-owned McMansions since the conventional wisdom was that millennials all wanted to be in the city.  Maybe having a home big enough for a nice sized quarantine bubble of loved ones/roommates to live in with room for outdoor entertaining/exercise and some chickens is the way to go.   

Except in maybe a couple of extremely urbanized states, there is always the rural areas for a lower cost of living. I truly hope that the trend to getting out of the cities sticks. The folks in the rural areas need the population and the money.

I disagree, I don't like seeing farmland and forest turned into housing developments.  I wish more people would want to stay in the cities, but I also wish that they'd realize that policies and regulations that might make sense in an urban area don't in a rural area.  Why yes, I am still bitter about missing out on 80 acres that I was under contract for because someone from a city swooped in and offered 50% more than I was paying, who then proceeded to bulldoze the older farmhouse and plop a mcmansion down right in the middle of the fields.

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #46 on: July 10, 2020, 11:40:23 AM »
I think the solution can be to live in one of the lowest cost areas in a rich state.  I live in one of the richest states in the country, but I live in the proudly redneck part of the state where it is actually affordable to live.  If I lived 50 to 100 miles away from where I live, it would be much more expensive.  I was so thankful when I was in grad school and able to get some much needed help from the state.  Surely there must be some affordable part of your state.

zinnie

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #47 on: July 10, 2020, 11:48:17 AM »
This is an interesting conversation! As others have mentioned, I don't know if it's HCOL vs. LCOL as much as it is state government philosophy. But OP--I am completely on the same page. I am very thankful to live in Massachusetts right now, and as long as I am in the US plan to stay in states that have similar values. The pandemic highlighted this need to me for sure--and I wasn't even thinking about health insurance. Yes, we all stayed home for a few months. And yes, we put on our masks when we leave the house--even when walking around outside. But numbers are staying low even as things reopen through this + testing + contact tracing.

scottish

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #48 on: July 10, 2020, 05:00:02 PM »


We probably won't move to a lcol area though.   There are too many things that are only available in the city.

Genuinely curious - what kinds of things that are only available in the city are important to you?

I grew up in a big city but after living in a small city for over 20 years now I prize the quieter pace of living and really dislike the thought of ever living in a big city again. (So I am always fascinated with the reasons why ppl prefer big city life)

I have everything I need here in my small city and do visit the big city a few times a year and will pick up a few groceries and a couple of items it's harder to find where I live.

We did have to travel frequently to and even live part-time for 1.5 months in a larger city two hours away when DH needed specialized cancer treatment our city's doctors couldn't provide. That was a pain. But still happy with our choice to live here instead of there.

As for OPs original question - there was a time when we almost moved to the US (as in - goodbye everyone, we're leaving in 2 weeks). Ever since I have been happy with our decision to stay in Canada. Yes, there are many, many pros to living in the US (including higher income potential in DH's field and more opportunities for a variety of things) but I like Canada's wide social safety net and fully covered healthcare. This pandemic has only made that even clearer to me and I am happy we chose to stay.

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Well, let's see.   I work in the technology sector so my professional network and a large part of my social network is tied to that.    You won't find anything significant in this space in rural areas.   It's getting hard to find much in urban areas in Canada with the demise of Nortel 10 years ago and the big downsizing of BlackBerry 5 years ago.  :-(   But at least we have a good community here, even if it's satellite offices of multi-nationals.

DW is Jewish.   Ottawa has a small but active Jewish community.   Again, not so much in rural areas.

One thing I really like that you can't do in Ottawa is spending time in the mountains.    (DW and I met in Calgary and relocated to Ottawa at the height of tech bubble in early 2000.)    I'm having a hard time understanding how to address this one.    We usually rent in the rockies for a few weeks every September, but once I do the RE part of FIRE things are a lot less clear.   do we move out west?   urban or rural?   and so on.

I've been careful to organization my commute to keep it to 20 minutes, 25 on a really bad traffic day.   So I don't suffer from the traffic congestion experienced by a lot of city dwellers.  In the summer I have bicycle paths and residential streets all the way to work for a nice 45 minute ride.   Of course, right now there is no commute.

And we have a vacation home (built by my deceased parents) on the waterfront about 2 hours away.





mm1970

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Re: Anyone rethinking LCOL areas during COVID?
« Reply #49 on: July 10, 2020, 05:14:26 PM »
I think the solution can be to live in one of the lowest cost areas in a rich state.  I live in one of the richest states in the country, but I live in the proudly redneck part of the state where it is actually affordable to live.  If I lived 50 to 100 miles away from where I live, it would be much more expensive.  I was so thankful when I was in grad school and able to get some much needed help from the state.  Surely there must be some affordable part of your state.
Yeah, but who wants to live in Bakersfield?

 

Wow, a phone plan for fifteen bucks!