4 ms·

The thing that usually gets left out there is savings. If you take SF salary + SF costs and cut everything in half then you also end up with half the money lef

The thing that usually gets left out there is savings. If you take SF salary + SF costs and cut everything in half then you also end up with half the money left for savings. The thing about saving for retirement is that you can contribute huge amounts of absolute dollars in a high COL place and then move to a low COL place to spend it when you retire.

conanbatt 9y ago
I dont have the article at hand, but obviously the goal is highest nominal savings, not highest nominal savings rate. The other part thats virtually impossible to account for is quality of life. Hard winters and big houses in Omaha vs Great weather and 1 bedroom with other people in SF, etc.
- froindt 9y ago
  It's best to simply look at it relative to expenses. If you want to retire in HCOL, you could do it in the same amount of time as someone in LCOL if you save the same % of your income. If you want to move to LCOL, estimate the expenses there. I don't know of strict rule of percentage or nominal dollars that works except for using annual expenses as the measuring stick.
dcosson 9y ago
Or, you can play the pyramid scheme game in the high cost area and hope you win. For example, buy a house in the bay area before 2010, it'll be paid off by the time you retire and because of Prop 13 the property taxes will never go up and you can happily retire there. But snark aside, this is a good point. If you keep all your budget percentages the same, then living in a high COL area you can save/invest more and still also have more spending money left over for hobbies or travel.
- muzz 9y ago
  Snark aside, you rightly allude to housing as an investment rather than an expense. Even those who bought post-2010 are still up by varying amounts, although those amounts are all likely 6 figures given the median home prices and recent increases. One doesn't need to pay off house. Upon retirement, just sell it and cash out and move to a cheaper area.

conanbatt 9y ago

I dont have the article at hand, but obviously the goal is highest nominal savings, not highest nominal savings rate. The other part thats virtually impossible to account for is quality of life. Hard winters and big houses in Omaha vs Great weather and 1 bedroom with other people in SF, etc.

froindt 9y ago
It's best to simply look at it relative to expenses. If you want to retire in HCOL, you could do it in the same amount of time as someone in LCOL if you save the same % of your income. If you want to move to LCOL, estimate the expenses there. I don't know of strict rule of percentage or nominal dollars that works except for using annual expenses as the measuring stick.

dcosson 9y ago

Or, you can play the pyramid scheme game in the high cost area and hope you win. For example, buy a house in the bay area before 2010, it'll be paid off by the time you retire and because of Prop 13 the property taxes will never go up and you can happily retire there. But snark aside, this is a good point. If you keep all your budget percentages the same, then living in a high COL area you can save/invest more and still also have more spending money left over for hobbies or travel.

muzz 9y ago
Snark aside, you rightly allude to housing as an investment rather than an expense. Even those who bought post-2010 are still up by varying amounts, although those amounts are all likely 6 figures given the median home prices and recent increases. One doesn't need to pay off house. Upon retirement, just sell it and cash out and move to a cheaper area.