Author Topic: Case Study - Should we quit our jobs and move across the country?  (Read 4132 times)

OnTheMove

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Hello,
I'm a long time reader of MMM and have been a practicing Mustachian prior to actually knowing what Mustachianism was all about. I have always been a saver and fairly minimalist in my approach to life. My wife had a different approach to managing money prior to our meeting but has since embraced the Mustachian lifestyle and all that it affords. My question to this wonderful forum is whether we should give up our relatively high paying jobs in the Pacific Northwest and move to Rocheter, NY to be closer to friends and family. Our goal is to allow her to take some time out of work and for me to reduce the number of hours I work and create a better work/life balance. We aren't ready to "retire" but would like the option to work part time or have an alternative work schedule to allow us to spend more time with the family. We are 35 and 37 respectively. We currently have a 12 month old and will likely have another in 2015.

Here are the current stats:

Gross Income:
Me - $120K
Wife - $70K

Total Net Monthly = $10.5K

Current Monthly Expenses
Food/Gas/Entertainment/Travel/Utilities/Insurance = $1350
HOA Dues = $345
Day Care(just went down) = $1180
Cell Phones = $70
Roth = $915
Total Monthly Expenses = $3860

Savings
I max out 403(b) and get a 7.5% match = $26.5K
Wife puts in 10% of Gross = $7K
Max Roth for both of us = $11K
Taxable Vanguard Account = $82K
Total Annual Pre/Post tax savings = $126.5K
Total Monthly = $10.5K

Current Assets
401(k) = $40K
Rollover/Roth IRA = $450K
Taxable = $410
Cash = $35K
Total Assets = $935K

Current Liabilities
$0

For purposes of this discussion, we would buy cash or put a down payment of $50K and anticipate $10K of remodel expenses if we pay cash so about a $60K . Our plan would be to have her find a job since she is able to find work almost immediately wherever she goes. Once I find a job she will likely quit working for the next 5-6 years. I am looking to change fields in a major way and anticipate I would drop to $40-$60K/year but would result in less hours at work and a better work/life balance. During that time figure the picture would look like this:

Projected Gross Income:
$40-$60K

Projected Net Monthly Income
$2-3K

Projected Monthly Expenses
Food/Gas/Entertainment/Travel/Utilities/Insurance = $1350
Cell Phones = $70
Roth = $915
Total Projected Monthly Expenses = $2335

Questions:

Is this too large a drop in income given our financial picture and goals?
Those who may have a situation similar to ours and have taken the leap, are you glad you did? Did it work out?
Are there any variables I may be missing?

I appreciate the insight this forum may provide.
« Last Edit: December 31, 2014, 03:35:41 PM by bshbros »

MDM

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Re: Case Study - Should we quit our jobs and move across the country?
« Reply #1 on: December 31, 2014, 04:44:32 PM »
bshbros, welcome to the forums.

I threw some numbers from your post into the spreadsheet from http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-write-a-%27case-study%27-topic/msg274228/#msg274228.  According to that, you are good to go.  But if I were you I'd put my own numbers in there, and try something like www.cfiresim.com.

Of course, everything depends on the assumptions becoming true - so, good luck!


CategoryMonthly amt.CommentsAnnual
Salary/Wages$15,833$190,000
FICA base salary/wages$15,833$190,000
401(k) / 403(b) / 457(b) / TSP /etc.$2,042Room to increase?$24,500
Employer Match$750$9,000
Income subject to IRS tax$13,792$165,500
Paycheck income before tax$13,792$165,500
Federal Adj. Gross Inc.$13,792$165,500
Federal tax$2,3342014 rates, stand. ded., 2 exemptions$28,013
Soc. Sec.$982Assumes 2 earners paying$11,780
Medicare$230$2,755
Total income taxes$3,546$42,552
Income before other expenses  $10,246$122,948
Monthly Expenses:
HOA$345$4,140
Childcare$1,180$14,160
Miscellaneous$1,350Food/Gas/Entertainment/Travel/Utilities/Insurance$16,200
Phone (cell)$70$840
Non-mortgage total$2,945$35,340
Other tax-advantaged investments:
Roth IRA$915$10,980
Total Expense$3,860$46,320
Total to invest$6,386$76,628
Available for taxable investment:$6,386$76,628
Summary:
"Gross" income$15,833$190,000
Income taxes$3,546$42,552
After-tax income$12,287$147,448
IRA+401k+ESPP+529/other$2,957$35,480
Living expenses$2,945$35,340
After-tax investable$6,386$76,628
Time to FIRE?:
Income after RE (pension, SS, etc.)50000/year
Time to FIRE0years
Safe Withdrawal Rate4.00%percent
Real return on tax-deferred investments5.33%percent
Real, after tax, return on taxable investments4.00%percent
Expected retirement total tax rate20.00%
Current Savings
Taxable$410,000
Tax-deferred (e.g. trad. IRA/401k)$40,000
Roth$450,000
Projected Savings at Retirement
Taxable$410,000
Tax-deferred (e.g. trad. IRA/401k)$40,000
Roth$450,000
Total projected stash$900,000
Projected Expenses in Retirement
Non-loan, non-work expenses$35,340
Income taxes$8,835
Total$44,175
Stash needed for retirement @4.0% SWR-$145,625
Have $1,045,625 extra.$

Thegoblinchief

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Re: Case Study - Should we quit our jobs and move across the country?
« Reply #2 on: December 31, 2014, 06:11:22 PM »
You have a big asset sheet. Enough to generate just shy of $40K p.a.

Avoid HOA fees in relocating.

Would either of you enjoy being a SAHP? Because eliminating daycare expenses makes you already FI in most areas of the country. Not sure about Rochester, but you're already $200K over my FIRE number.

Why worry about income loss when you have ENOUGH to live a good life in many parts of the US, and more than enough to expatriate if that interests you at all. Relocate by all means, but why not go further and get off the treadmill entirely?

pbkmaine

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Re: Case Study - Should we quit our jobs and move across the country?
« Reply #3 on: December 31, 2014, 07:00:26 PM »
Rochester is economically depressed. This makes for inexpensive housing stock but deteriorating neighborhoods. The job market is tough. One of my clients commutes to NYC for his job. I would research potential jobs diligently before deciding to work there..

OnTheMove

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Re: Case Study - Should we quit our jobs and move across the country?
« Reply #4 on: January 02, 2015, 12:02:50 PM »
MDM - Thank you for the spreadsheet info. I looked at the "How to write a case study" but didn't scroll all the way down. I will plug in my figures as well.


You have a big asset sheet. Enough to generate just shy of $40K p.a.

Avoid HOA fees in relocating.

Would either of you enjoy being a SAHP? Because eliminating daycare expenses makes you already FI in most areas of the country. Not sure about Rochester, but you're already $200K over my FIRE number.

Why worry about income loss when you have ENOUGH to live a good life in many parts of the US, and more than enough to expatriate if that interests you at all. Relocate by all means, but why not go further and get off the treadmill entirely?

I agree with the no HOA sentiment. I have been down that road and it wasn't enjoyable for me. My wife is very interested in either being a SAHM or working part time for the next few years until the kids are in school.

I guess I have a hard time accepting that we could make it work. I guess I need to read more about how people are structuring their cash flow from investments. I feel like we have more money locked up in retirement accounts than necessary. Particularly the Roth.

Rochester is economically depressed. This makes for inexpensive housing stock but deteriorating neighborhoods. The job market is tough. One of my clients commutes to NYC for his job. I would research potential jobs diligently before deciding to work there..

We lived in NYC for almost three years and definitely aren't interested in moving back there. It was fun while it lasted but we are looking for a different pace of life. We do have friends and family that live there and can agree that the job market can be tough but given our backgrounds I think we will be able to find something even if we are underemployed for awhile. Are there specific neighborhoods you would stay away from?

dandarc

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Re: Case Study - Should we quit our jobs and move across the country?
« Reply #5 on: January 02, 2015, 12:12:05 PM »
Reasons you should not be overly concerned about getting to your money:

1.  410K in taxable account - that alone is like 15 years of your projected spending, even without growth
2.  Roth IRA contributions can be withdrawn at any time
3.  Search Roth IRA ladder and 72t SEPP for ways to get to your pre-tax accounts early if necessary

Mommyof2

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Re: Case Study - Should we quit our jobs and move across the country?
« Reply #6 on: January 02, 2015, 12:49:04 PM »
We have also been looking to relocate to Rochester, excellent schools, low real estate costs, better family balance.  I'm from rochester as well.   I think it has been turning around, there are companies based there and a lot of tech start ups as well.   

historienne

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Re: Case Study - Should we quit our jobs and move across the country?
« Reply #7 on: January 02, 2015, 12:59:52 PM »
Hey!  We live in Rochester (and have a 15 month-old).  It's a great, and cheap, place to raise a family.  $60k might be a bit optimistic for a house, but you could easily do $80k if you are willing to live in the city (potentially shitty schools) and don't care a lot about walking to shopping/library/parks/etc.  I'd look in the 19th Ward and the Culver-Winton-Main area for good combos of pretty safe and family-oriented but cheap neighborhoods.  We live in the Highland Park/South Wedge area, which is lovely, but a bit more - probably at least $100k for a 3 bedroom in decent condition.

Schools are the crapshoot, though.  The suburbs would be more expensive.  We bought in the city and will be applying to some of the good citywide schools/programs as well as charter schools.  If that doesn't work out, we will move to Brighton while our daughter is in school, where our mortgage and property taxes will be much higher.

And ditto on the bad job market.  My husband has not had luck searching here; luckily, he's been able to work remotely for his West Coast firm.  He is in a high-demand field, so I'm pretty sure he could find *something*, but he hasn't been able to find anything as interesting (or nearly as well paid) as his remote position.

If you don't mind saying, at least in general terms, what is your current field and what field are you looking to switch to?

OnTheMove

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Re: Case Study - Should we quit our jobs and move across the country?
« Reply #8 on: January 02, 2015, 01:17:29 PM »
Reasons you should not be overly concerned about getting to your money:

1.  410K in taxable account - that alone is like 15 years of your projected spending, even without growth
2.  Roth IRA contributions can be withdrawn at any time
3.  Search Roth IRA ladder and 72t SEPP for ways to get to your pre-tax accounts early if necessary

Thanks for the reality check dandarc. I guess that most of my concerns are around keeping enough income to cover all expenses including additional savings. The thought of taking out what has been so hard to save is the biggest psychological hurdle given our age. It's hard to turn of the save, save, save mentality.

We have also been looking to relocate to Rochester, excellent schools, low real estate costs, better family balance.  I'm from rochester as well.   I think it has been turning around, there are companies based there and a lot of tech start ups as well.   

We really enjoyed it when we visited and my wife has been friends with a family that's lived there all their lives. There are great schools, cost of real estate is very reasonable even with taxes, and it has enough cultural activities to keep us busy.

OnTheMove

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Re: Case Study - Should we quit our jobs and move across the country?
« Reply #9 on: January 02, 2015, 01:56:13 PM »
Hey!  We live in Rochester (and have a 15 month-old).  It's a great, and cheap, place to raise a family.  $60k might be a bit optimistic for a house, but you could easily do $80k if you are willing to live in the city (potentially shitty schools) and don't care a lot about walking to shopping/library/parks/etc.  I'd look in the 19th Ward and the Culver-Winton-Main area for good combos of pretty safe and family-oriented but cheap neighborhoods.  We live in the Highland Park/South Wedge area, which is lovely, but a bit more - probably at least $100k for a 3 bedroom in decent condition.

Sounds like we're in a really similar situation. The $60k reference was to an East Rochester fixer. It was a fixer and we are definitely not afraid of a fixer. I agree with your figures though. Most of what we have been looking at are in the $90-105K range. ER is within walking distance to schools, parks, and the library and some friends live in that neighborhood. I'd look elsewhere, South Wedge and maybe 19th Ward, but that might defeat some of the purpose of being in very close proximity to friends.

I understand that the 19th Ward is improving but can still be rough in some areas. How do you like South Wedge? It would be close to where I may wind up working, U of R/SMH. Is it fairly walkable/bikeable. I currently bike to work and am not sure I can replicate it out there.

Schools are the crapshoot, though.  The suburbs would be more expensive.  We bought in the city and will be applying to some of the good citywide schools/programs as well as charter schools.  If that doesn't work out, we will move to Brighton while our daughter is in school, where our mortgage and property taxes will be much higher.

Do you think the charter schools are better than public? A cursory search indicates good quality but I don't know much about the history of the schools. What are your thoughts on Brighton vs. ER school district? Worth the higher price tag on the house? Taxes seem to be higher but still fairly reasonable.

And ditto on the bad job market.  My husband has not had luck searching here; luckily, he's been able to work remotely for his West Coast firm.  He is in a high-demand field, so I'm pretty sure he could find *something*, but he hasn't been able to find anything as interesting (or nearly as well paid) as his remote position.

If you don't mind saying, at least in general terms, what is your current field and what field are you looking to switch to?

Sounds like it's working out but unfortunate that he can't find anything locally. I have a background in Gov't/Higher Ed/Medical so I have been looking into U of R and RIT as well as SMH.

Something totally different. A trade. Something that doesn't require sitting at a desk answering email all day and gets me outside on a regular basis.

EconMode

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Re: Case Study - Should we quit our jobs and move across the country?
« Reply #10 on: January 02, 2015, 02:11:12 PM »
I have lived in the Rochester region nearly all of my life.  I have also traveled pretty extensively across the US and parts of Europe and Asia.  So I do have something else to compare to :-) 

As mommyof2 indicates the Rochester city public schools are not good (I wouldn't send my kids there).  There are excellent private and charter schools and most suburban public schools are outstanding.  Brighton frequently rates top 20 in the country and many other suburban districts are in the top 100.  Property taxes are crazy high though - typically 3% of full market value per year - no that's not a misprint. 

As far as jobs go, you shouldn't have any problems if you're  in the medical or technology fields.  The pay will not be nearly as good as the West Coast.  So a remote work arrangement, where you get the high west coast salary and live in a low COL area like Rochester, would be ideal.  Jobs in education can be hard to come by, particularly in the suburban schools. While the current wave of boomer teachers are retiring, we have SUNY schools which are minting new teachers by the hundreds each year.  Some look to stay in the region, others move to the southern states.

Other than that, there's plenty to do in and around the region.  Within a few hours drive or less you have several great lakes (Ontario and Erie), Niagara Falls, Fingerlakes wineries, Adirondack hiking, an excellent network of public campgrounds throughout NYS. 

historienne

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Re: Case Study - Should we quit our jobs and move across the country?
« Reply #11 on: January 02, 2015, 02:44:47 PM »

Sounds like we're in a really similar situation. The $60k reference was to an East Rochester fixer. It was a fixer and we are definitely not afraid of a fixer. I agree with your figures though. Most of what we have been looking at are in the $90-105K range. ER is within walking distance to schools, parks, and the library and some friends live in that neighborhood. I'd look elsewhere, South Wedge and maybe 19th Ward, but that might defeat some of the purpose of being in very close proximity to friends.

I understand that the 19th Ward is improving but can still be rough in some areas. How do you like South Wedge? It would be close to where I may wind up working, U of R/SMH. Is it fairly walkable/bikeable. I currently bike to work and am not sure I can replicate it out there.

Do you think the charter schools are better than public? A cursory search indicates good quality but I don't know much about the history of the schools. What are your thoughts on Brighton vs. ER school district? Worth the higher price tag on the house? Taxes seem to be higher but still fairly reasonable.


Sounds like it's working out but unfortunate that he can't find anything locally. I have a background in Gov't/Higher Ed/Medical so I have been looking into U of R and RIT as well as SMH.

Something totally different. A trade. Something that doesn't require sitting at a desk answering email all day and gets me outside on a regular basis.

Ok, if you are in higher ed/medical, that's definitely the best thing to be in for this area.  So you might have better luck. 

On schools, most of our friends live in Brighton or the city, so that's why we'd move to Brighton over other suburbs.  My husband is also not American, and Brighton is more cosmopolitan that the other suburbs, which matters to him.  I do know people who are happy with East Rochester, Penfield, and Fairport schools as well.   Our first choice, though, is to stay in the city, both because of cost and because we like it here.  We really like living in the South Wedge; we are big walkers, so having Highland Park and the river trail close by are nice.  We can walk to our library, daycare, pediatrician, a few small grocery stores, and several restaurants and coffee shops.  I'm too much of a wuss to bike in the winter, but in the summer we can bike downtown and to the library/pool in Brighton. We are able to get by with one car.  So we will hope to get into a charter school such as Genessee Community Charter, or to a citywide program like the bilingual program at School 12.   If we don't get into any of those, we will give our local elementary a go, but the problems in the city school district are real, and I anticipate that we would end up moving.   So if you like East Rochester and have friends there, you might as well start out in a good school district.

OnTheMove

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Re: Case Study - Should we quit our jobs and move across the country?
« Reply #12 on: January 02, 2015, 03:40:54 PM »

Sounds like we're in a really similar situation. The $60k reference was to an East Rochester fixer. It was a fixer and we are definitely not afraid of a fixer. I agree with your figures though. Most of what we have been looking at are in the $90-105K range. ER is within walking distance to schools, parks, and the library and some friends live in that neighborhood. I'd look elsewhere, South Wedge and maybe 19th Ward, but that might defeat some of the purpose of being in very close proximity to friends.

I understand that the 19th Ward is improving but can still be rough in some areas. How do you like South Wedge? It would be close to where I may wind up working, U of R/SMH. Is it fairly walkable/bikeable. I currently bike to work and am not sure I can replicate it out there.

Do you think the charter schools are better than public? A cursory search indicates good quality but I don't know much about the history of the schools. What are your thoughts on Brighton vs. ER school district? Worth the higher price tag on the house? Taxes seem to be higher but still fairly reasonable.


Sounds like it's working out but unfortunate that he can't find anything locally. I have a background in Gov't/Higher Ed/Medical so I have been looking into U of R and RIT as well as SMH.

Something totally different. A trade. Something that doesn't require sitting at a desk answering email all day and gets me outside on a regular basis.

Ok, if you are in higher ed/medical, that's definitely the best thing to be in for this area.  So you might have better luck. 

On schools, most of our friends live in Brighton or the city, so that's why we'd move to Brighton over other suburbs.  My husband is also not American, and Brighton is more cosmopolitan that the other suburbs, which matters to him.  I do know people who are happy with East Rochester, Penfield, and Fairport schools as well.   Our first choice, though, is to stay in the city, both because of cost and because we like it here.  We really like living in the South Wedge; we are big walkers, so having Highland Park and the river trail close by are nice.  We can walk to our library, daycare, pediatrician, a few small grocery stores, and several restaurants and coffee shops.  I'm too much of a wuss to bike in the winter, but in the summer we can bike downtown and to the library/pool in Brighton. We are able to get by with one car.  So we will hope to get into a charter school such as Genessee Community Charter, or to a citywide program like the bilingual program at School 12.   If we don't get into any of those, we will give our local elementary a go, but the problems in the city school district are real, and I anticipate that we would end up moving.   So if you like East Rochester and have friends there, you might as well start out in a good school district.

Thanks for the information. I will look into the charter schools more to get a better idea about what we would like to do. I started looking into the Rochester schools and the ratings are not very good. Brighton gets great reviews. East Rochester looks good.

I was a big fan of South Wedge when we visited and still think it's a viable option. Highland Park is great and it would be close to work if I were at U of R or RIT. I guess ER is considered the suburbs

We've been successful with one car here and would hope to continue that trend out there. I would have to agree that bike commuting would be tougher in the winter. It's pretty mild out here and no snow to deal with so it's not a tough commute.

OnTheMove

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Re: Case Study - Should we quit our jobs and move across the country?
« Reply #13 on: January 02, 2015, 03:48:25 PM »
I have lived in the Rochester region nearly all of my life.  I have also traveled pretty extensively across the US and parts of Europe and Asia.  So I do have something else to compare to :-) 

As mommyof2 indicates the Rochester city public schools are not good (I wouldn't send my kids there).  There are excellent private and charter schools and most suburban public schools are outstanding.  Brighton frequently rates top 20 in the country and many other suburban districts are in the top 100.  Property taxes are crazy high though - typically 3% of full market value per year - no that's not a misprint. 

As far as jobs go, you shouldn't have any problems if you're  in the medical or technology fields.  The pay will not be nearly as good as the West Coast.  So a remote work arrangement, where you get the high west coast salary and live in a low COL area like Rochester, would be ideal.  Jobs in education can be hard to come by, particularly in the suburban schools. While the current wave of boomer teachers are retiring, we have SUNY schools which are minting new teachers by the hundreds each year.  Some look to stay in the region, others move to the southern states.

Other than that, there's plenty to do in and around the region.  Within a few hours drive or less you have several great lakes (Ontario and Erie), Niagara Falls, Fingerlakes wineries, Adirondack hiking, an excellent network of public campgrounds throughout NYS. 

Brighton schools look really good. We have friends that are in East Rochester and they get pretty good marks as well.

I wish I were able to set up some sort of telework situation. I will probably have to get a local job so I will be on the hunt.

I love the Canalway Trail. Great place for a long run or ride. It could even act as a replacement for the Seattle to Portland ride. Okay, not really a replacement but still a great long trail for all sorts of activities.

http://www.canals.ny.gov/trails/index.html

feelingroovy

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Re: Case Study - Should we quit our jobs and move across the country?
« Reply #14 on: January 02, 2015, 04:24:40 PM »
I grew up in the Rochester suburbs too and I agree it's a great area to raise a family.

My sister is a teacher in the Rochester school district.  She's at a school that used to be a charter school--I'm not totally sure how it works; you still have to apply to get into the lottery.

This is one of the better schools in the district--there are a few good ones.  I think they're just hard to get into.  But the district as a whole ranks last in upstate, IIRC.

Here's a listing http://www.bizjournals.com/buffalo/news/2014/10/14/2014-school-district-rankings-for-eight-upstate.html.

It's all test scores of course, but it might be helpful.

Weedy Acres

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Re: Case Study - Should we quit our jobs and move across the country?
« Reply #15 on: January 02, 2015, 07:42:43 PM »
Your budget is missing something.  You list no rent and no mortgage.  But you have no paid-off house in your list of assets.  What's the scoop on your living arrangement/expenses?

OnTheMove

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Re: Case Study - Should we quit our jobs and move across the country?
« Reply #16 on: January 05, 2015, 11:59:41 AM »
Your budget is missing something.  You list no rent and no mortgage.  But you have no paid-off house in your list of assets.  What's the scoop on your living arrangement/expenses?

My father-in-law owns a condo that we are temporarily living in and paying the dues until we either stay here and purchase or move elsewhere.