Semi-retirement locations?

[Frugalchicos]

@Seppia
I agree about Utah being the most beautiful state in the US. It has it all, desert, mountains, rivers, lakes…

However, in my opinion, nothing beats southern Europe. Lifestyle, sense of community and quality of life for way cheaper is far superior than any place in the US. Any coastal town in Portugal or northern Spain could be a good choice.

[RealPerson]

@Seppia
I agree about Utah being the most beautiful state in the US. It has it all, desert, mountains, rivers, lakes…

However, in my opinion, nothing beats southern Europe. Lifestyle, sense of community and quality of life for way cheaper is far superior than any place in the US. Any coastal town in Portugal or northern Spain could be a good choice.

I generally agree but what about taxation? I understand that Spain taxes you as a resident after 6 months of being in Spain and it has a wealth tax. Portugal might be better in this regard? Would love to hear more about the tax issues.

Utah is pretty darn amazing. The most beautiful landscapes you can imagine, but living there as a non Mormon might be challenging. Unless you convert of course.

[Seppia]

I’ve been to Utah numerous times and never felt the non-Mormon issue.
Apparently, Mormons are outnumbered in SLC https://www.latimes.com/nation/nationno ... story.html
I don’t know, maybe living there VS just staying a few weeks one will feel it more.

The issues with Southern Europe are mainly tied to
taxation
Portugal may be different, but I’d focus on Italy, southern France and Spain, where taxation is definitely a problem
In Italy dividends are taxed 26% plus there’s a 0.2% yearly wealth tax on any financial assets above 5000€, which assuming a dividend yield of 3% means a 0.53% extra headwind compared to the USA.
That alone makes a 3.5% SWR go all the way down to 2.97%

[Freedom_2018]

We were considering a move to Southern Europe but the tax rates (income, wealth) put a damper on it. Besides we are still in travel/nomadic phase so not really looking to settle down but being based out of Europe would have made a lot of travel easier.

On a related/unrelated note, the handling of the Covid pandemic in US versus Europe gave me some useful insight. I think Europe is great during peace-time...all that history, architecture, quaint cafes and all that. But when shit hits the ceiling, they go very quickly to 'do you have your papers?' mode. At least back in the US one has the option to live or die by one"s own hand if you will. The government response is always likely to be chaotic and uneven... thereby creating some opportunities.

[chenda]

I expect personal preference plays a big role here, and tax issues will also vary a lot depending on individual circumstances. I agree Southern Europe is generally great, and the COL in Southern Europe is much lower than the North, like 30% - 40% lower depending on comparables, which could be more than enough to neutralise any tax disadvantage.

[Frugalchicos]

I totally agree with Chenda. Money is not everything in life and I would never choose a determined location based solely on COL.

Wealth taxes in Europe might be a bit higher than in the US. However, you enjoy a good public healthcare and public education. We are also forgetting about property taxes in the US…which are completely nuts if you compare them to any place in Europe. For instance, we pay $0 because of owning in the old city, my mom pays $340/year and my father $280/year. Weather wise, it is hard to think of a place in the US that is affordable and not isolated where you don’t have to blast the heater and/or the AC for a good chunk of the year.

Also, anything you do in the US costs much more than in Southern Europe. Lets do the beer example: Beer in Chicago $6-$7 vs in Southern Europe $2.

In my opinion, the US is the country to make and save the money living a modest live. Southern Europe is the place to enjoy a more relaxed life with better quality overall.

[Seppia]

It really depends. Life outside of the biggest cities is incredibily cheap in the USA, you don’t pay property taxes if you rent and in terms of public healthcare/education, the really cheap areas of Southern Europe tend to suck (Sicily, Andalucia, etc).
In America the tax rate for someone making less that $30k per year is basically closer to zero than to the Italian 40ish%.

[white belt]

I agree with @Seppia’s take. The US is just so huge with so much geographic and political variation that if you don’t like the conditions in your current location, you can probably just move a state or 2 over to find something more suited to you.

There are a ton of low cost of living cities with populations in the 200k-900k range that dot the American South and Midwest. They often give you the benefit of some urban amenities with even better access to outdoor amenities than is possible in the more heavily populated parts of the the coasts. Did I mention they are also generally incredibly cheap?

[unemployable]

In America the tax rate for someone making less that $30k per year is basically closer to zero than to the Italian 40ish%.

A single making $30k wage income would pay 7.85% social security/medicare on the whole thing and 10% federal income tax on about $17k of that. So about $4k total. Plus state tax, which in Colorado would be about another $700 on top of that. So roughly 12-18% depending on state.

That's for wage income. Self-employed would pay more. If all of it were capital gains you'd pay zero federal. You'd also pay very close to zero income tax if you had a kid, although the 7.85% FICA on wage income would still apply.

I've been to Utah a good bit, including earlier this month. I like it but get bored of it rather quickly and... it's just not Colorado, nothing is. Utah is probably the prettiest state if you never leave roads.

[Ego]

And for us the edge effect of borderlandia is priceless. To each his own. I still say cost of living should not be a factor at all in the calculation or it should be way down the list of priorities.

It strikes me that having to work to cover costs is a freedom-from focus. Freedom-from worrying about paying the bills. Taking care of freedom-froms is a first-level accomplishment. It permits movement to the next level, freedom-tos. I think maybe retirement locations should be dictated by freedom-tos.

[unemployable]

I still say cost of living should not be a factor at all in the calculation or it should be way down the list of priorities.

If cost of living (presumably mostly housing) doesn't matter, then what cost does? Or is this Wheaton Level 8 stuff where money is only used because you don't have some other currency?

I've long tried to formulate a rebuttal to criticisms of ERE that "I prefer to have nice things". The best I can do is ERE as I see it provides a framework for prioritizing which nice things you want and obtaining them at your personal cost/benefit maximin. There's a reason I still spend summers in the Colorado mountains rather than, oh I don't know, Pueblo or somewhere... but also a reason I don't spend all year here.

[Seppia]

To each his own. I still say cost of living should not be a factor at all in the calculation or it should be way down the list of priorities.

I have a list of places where I like to spend time/be, and only when somewhere is within that list I start to look at the cost factor.
It is so much down the list of priorities that I wouldn't even consider going to WORK somewhere I don't like (I was offered a position in Saudi Arabia recently and my answer was basically "lol").

It strikes me that having to work to cover costs is a freedom-from focus. Freedom-from worrying about paying the bills. Taking care of freedom-froms is a first-level accomplishment. It permits movement to the next level, freedom-tos. I think maybe retirement locations should be dictated by freedom-tos.

I like being in nature, hiking, being reasonably close to an international airport. My list of potential locations is strictly dictated what my family likes to DO, so I 100% agree with the above.
I could be financially independent four times over if I moved to Kosovo, but then I'd be stuck in Kosovo (sorry Kosovari ERE crowd)

[Jean]

As someone started mentioning locations outside of thé us, switzerland is great. Non tax on capital gain, low property tax, awesome outdoors, no need for a car, centrally located in Europe, Never far from an int'l airport, col isn't as high as people imagine, cheap top level éducation. Healthcare is excellent and relatively affordable. Thé covid réponse was very moderate (with good results comparéd to other western nations). Some area even have a mediteranean climate. You juste need to bé able to fit in somehow.

[Andy Dufresne]

Jean - CH doesn't have CG tax because your CG is taxed as ordinary income; you also have wealth tax (not crazy but its there). Also, unless you have an EU passport, living in CH legally isn't even close to being easy ... and I personally love CH, don't get me wrong ... but I think it will prove next to impossible for ppl to move to CH legally and then, even if the COL is something they can deal with, the likely social isolation will break them - in my experience, the Swiss aren't too quick to warm up to strangers, and any improvement is measured in years. Just my 2 cents

[Jean]

CG is taxed as regular income only if you trade actively. But otherwise, you're right.

[Laura Ingalls]

It really depends. Life outside of the biggest cities is incredibily cheap in the USA, you don’t pay property taxes if you rent and in terms of public healthcare/education, the really cheap areas of Southern Europe tend to suck (Sicily, Andalucia, etc).
In America the tax rate for someone making less that $30k per year is basically closer to zero than to the Italian 40ish%.

There are lots of small towns in the US that are cheap. Moab is not one of them. Many of the service jobs have dorm type housing available. Nurses and teachers often commute from Grand Junction, CO. Zillow’s cheapest listing is $450k.

[chenda]

I am considering moving to Switzerland for a while after Covid. I find Swiss people generally reserved but not unfriendly, and as an introvert it suits me. The big cities also have a large international workforce, I know several people who used to commute weekly to Geneva before lockdown.

[Frugalchicos]

@Seppia
"Life outside of the biggest cities is incredibly cheap in the USA" - Agree....but you also have to live there...which might be a big commitment.

[Jean]

We value privacy very highly, and it incluses other people's privacy. So you have to make it clear that you want more contact. Thé hardest part is to make the différence between someone who doesn't want to disturb you, and someone who want to bé left alone. Asking this question directly is uncommon but usually works. Joining a sport or music sociéty is a good way to make Friends Feel free to Ask me more questions.

[Seppia]

@Frugalchicos
I didn’t mean going to live in Amarillo TX, I just meant outside of the 10/15 cities that are really expensive.
I know things are changing really fast in the USA in terms of property prices, but I remember housing in SLC, outside Dallas, outside of Miami to be relatively affordable compared to similar locations in Europe.

There are lots of small towns in the US that are cheap. Moab is not one of them. Many of the service jobs have dorm type housing available. Nurses and teachers often commute from Grand Junction, CO. Zillow’s cheapest listing is $450k.

Wow 450k?
Has it changed recently?
I remember being there in 2012 and it didn’t “feel” like an expensive place to be.