As we all start thinking of retirement, it makes sense to set up your life in such a way that your expenses are minimized. There is no point in having a high-bucks lifestyle when you retire, unless you are truly rich.
But for the rest of us, having a plan of how to live on a day-to-day basis and afford a comfortable retirement is the goal.
After much hemming and hawing, we decided to market our home in New York and retire full-time to Jekyll Island. Oh, when I say "retire" I mean that I will still work part-time. But I no longer will have the need to make a six-figure salary, just to pay the bills.
There are a number of reasons why I am doing this. Everyone asks me for a single reason, but there really are so many, it is not possible to point to one thing that made us decide to move. There is no "straw that broke the camel's back" - it just seemed like it would be a lot easier all around to downsize.
Here are a number of reasons that have compelled us to this life-changing decision, in no particular order:
1. Saving money: Owning two homes means a monthly mortgage payment of about $2400 a month, plus the additional taxes of $6000 a year, additional homeowner's insurance of $1000 a year, two internet service bills, two sets of utility bills, plus extra maintenance. Easily, this adds up to $5000 a month or more in extra living expenses, or about $60,000 a year, nearly half my income. Granted, there are some bills that will go up slightly (utilities in Jekyll) and mortgage interest is tax-deductible. But regardless, our need for income will drop dramatically and our disposable income will rise dramatically as a result of downsizing. We can also save more.
2. Going Negative: Despite all the savings I have enacted in this blog, our monthly cash flow has been going negative in recent years. Not by a lot, but we are incurring debt and/or finding it hard to pay down debt. When your savings balances decline and your credit card debt increases, it is a sign you are spending more than you make. Time to take action and make changes. So we are.
3. Too Much Work: Owning two homes is a staggering amount of work, and our New York home has a lot of labor associated with it. Everything, it seems, needs to be cleaned, oiled, checked, tuned up, winterized, de-winterized, waxed, polished, put away, taken out, weeded, watered, fertilized, and generally taken care of. The moment you stop doing these things, bad things happen - things break or wear out, leaving you with expensive repair bills. A smaller home with fewer "things" is the answer. Less work, more time for play.
4. Poor Internet Service: We pay nearly $80 a month for Internet service at the farm by satellite, and it is poor. The local cable and phone companies have no plans to EVER offer Internet service here. Not a deal-killer, to be sure, but another grain of sand in the balance beam.
5. High Taxes: Real Estate taxes, and every other tax, are high in New York. The welfare system here is enormous, and local schools are gold-plated and teachers highly paid. This is great if you are on welfare and have three kids in school. But there are no jobs, and what few jobs that are here are chased out of the State. Long-term, it makes sense to move to somewhere where taxes are lower, if we plan on living on a fixed income.
6. Indians: Compounding the problem of the welfare state are the many Indian tribes who have convinced the Federal Government to expand the size of their reservations and allow them to operate casinos, gas stations, and other businesses, tax-free. They are driving local businesses bankrupt, as they can undercut everyone else's prices. Mathematically, if this trend is allowed to continue, it is a certainty that the Indian tribes will operate every business in the State. Of course, many of these casinos and businesses are operated by people who do not have Indian-sounding names.....people who might be working for...
7. The Mafia: Yes, New York is a corrupt State, and organized crime is a real problem. Not in the sense that they are killing people on the street or shaking down citizens. But rather, they have their fingers in everything, and as a result, every government project gets bogged down in corruption and overpricing. This in turn leads to staggering taxes and a depressed economy. Tony Soprano isn't "cool" at all. His type ruins civilizations.
8. The Weather: While it is beautiful here in the Summer months, in the Spring and Fall it can be cold and rainy, and in the Winter - well forgetaboutit. Dreary and depressing are the order of the day. It is cheaper to come up here for three months in a camper than to buy a home here and leave it vacant for six months or more.
9. The People: You have never seen such an unhappy bunch of complainers in the world. Everyone in Ithaca is upset over one thing or another. Most smoke pot and/or are on anti-depressants. They are crazy - and not in a good way. Most are unpleasant to be around, as they have such negative views on life and everything. They despise happy people and people who are successful and have money. They have this neo-socialist attitude that the State should run everything and no one should have ambition. While they like to think of themselves as educated, they really are not very bright people. Who in their right mind would endure New York winters and New York economic conditions? Not smart!
10. Private Road: We live on a private road, and in the time we've been here, it has gotten worse and worse. The problem is, the people (see #9 above) just bicker at attack one another and nothing gets done. "Love thy neighbor" is not the order of the day. Again, these are not bright folks, and often the simplest points are lost on them, because they'd rather believe what they want to believe, rather than think. When confronted with our crumbling private road, for example, one homeowner said, "Isn't there some government program that pay to have it re-paved?" This is the sort of genius thinking that goes on here. Stupid! Living on a private road is like owning a Condo, on a small scale, and you know how I feel about condos.
11. Access to Medical Care: The nearest hospital, in either direction, is 20 miles. In Brunswick, there is a state-of-the-art hospital nearly at the end of the causeway. Health insurance is cheaper in Georgia as well.
12. One Level Living: While we are ambulatory now, it makes sense, as we age, to think about a home without stairs. Jekyll has one level living with wide doors.
13. Doing Things Rather Than Owning Things: While it is nice to have a vacation home, it is also nice to go to different places. Owning a vacation home locks you into going to the same place, year after year. We can't jet off to Europe, or take a trip to Alaska, or go on a cruise - because all our time and energy is devoted to taking care of two houses.
14. We Can Rent For Less: If we really want to spend the summers up here, we can rent a house for less than the annual carrying cost of owning two homes.
15. Debt-Free: Selling the home means we will be debt free - no mortgage, no credit card debt, no car loans. Less stress, no "need" to make huge sums of money. More time for Golf or relaxing.
16. More Money for Retirement Savings: We will be able to put more in our 401(k) as a result of severely reduced cash flow needs.
17. Real Estate Appreciation Flat: There is no point in "holding on" to Real Estate in the hopes it will gain in value, as the market is flat and will remain so for at least 5-10 years.
18. Carrying Cost Versus Price: While it may take some time for the house to sell, we can sell it at an attractive price for a quick sale. Since it is costing us $5000 a month to maintain two homes, setting an unrealistic price and waiting a year or more for a buyer would end up costing us $50,000 in expenses. Better to lower your price by $50,000 and sell quickly.
19. Owning fewer "things": Consolidating two homes means we will own far fewer things to maintain and worry about. Two cars (maybe only one) fewer shoes, fewer clothes, fewer appliances, fewer computers, electronics - everything. Owning two of everything is time-consuming and taxing.
20. You Can Always Come Back: Just because we are selling the house doesn't mean we can't rent a place here - for far less than owning a home. The idea that you have to leave permanently is ridiculous. Downsizing, on the other hand, is a good idea.
21. Utilities Cost: In addition to the cost of two utility bills (even when we are not there, both houses consume energy) the cost of utilities in New York is far higher than in Georgia. NYSEG charges a minimum utility fee for the house, barn, and lake, so regardless of whether a kilowatt is used, we pay $25 a month on each. Cost per kilowatt is higher in New York, of course, and we rely on propane for heating, which is not cheap. In addition, since the house in Georgia is smaller, it uses less energy. Oddly enough, it is cheaper to air condition the house in Georgia than to heat the one in New York.
22. Phone service: We can rely on a land line in Georgia now, and go to a disposable-type pay-as-you-go cell plan for our cell phones, if desired. This could save us a lot of money and we would not have to rely on cell phones for our main communication.
23. Golf: There are four golf courses on Jekyll, and they are rarely played in the winter months. The courses are in much better shape than in New York, where the season is short. If we volunteer for the Authority, Golf can be free. Yes, free.
24. Beaches: There are miles of empty beaches on Jekyll, and it is a nice place to hang out and see the water. We just don't get that in New York.
25. Driving: You can get most of your daily needs on the island, where the speed limit is 35 mph and you can drive your golf cart or NLEV on the road. In New York, it is a good five miles to the local corner store and 20 miles to the grocery.
26. Biking: A bike path goes around the entire island, and you can use your bike to go anywhere on the island. Biking in NY usually requires that you drive somewhere to go biking. Local roads have narrow shoulders and 55-mph speed limits. Not conducive to biking!
27. Penis Boats: A nice relaxing day at the lake is a wonderful thing. That is, until the guy with the 1500-horsepower penis boat goes roaring by at 150 decibels. This sort of white trash behavior kind of ruins things. For a vacation home, perhaps a quiet, smaller lake in the Adirondacks, would be nicer. Just saying.
28. Trash#1: The Mafia (see #9) runs the trash business. So throwing things away up here is expensive and difficult. We have to keep trash in our garage all week and then haul it ourselves to a transfer station, where it must be sorted and put in bins. It is messy, disgusting work, and the only alternative is to hire a service, which still requires that we truck the trash 1/4 mile down the road. At the transfer station, locals park right in front of the dumpster or literally blocking the road, so dumping your trash becomes frustrating, as some idiot takes his time blocking everything while he "takes his turn" dumping his garbage. And yes, you have to pay $3.50 per bag to do this. In Jekyll, we do have to pay a trash fee, but they do pick up the trash from your home once a week. We also have a recycling center, if you want to use it.
29. Trash#2: We have a 5 cent per bottle deposit in New York. Not lucrative enough like in Michigan, to make it worthwhile - just annoying. So you harbor smelly beer bottles in your garage (or worse, car) for weeks until you have enough to take back to the store. It takes days to get the smell off your hands. And they recently decided to expand this scheme to non-carbonated beverages and perhaps even wine and liquor! Hmmm.... have you noticed a correlation between States with deposit laws and States that have depressed economies? Almost every State you see listed on the deposit bottles is in a state of funk. Perhaps over-governing people is the reason.
30. Trash#3: The mafia is in the trash business. Decades ago, New Yorkers bought into the "trash crises" lock, stock, and barrel, believing that for some reason, we would run out of places to throw our trash. This is, of course, nonsense. So trucks drive from all over to dump trash in huge landfills. This means a lot of truck traffic, usually on local roads, and usually from smelly, run-down trucks being driven over the speed limit. On our State Route 90, the State has had to replace three major bridges, which have all but collapsed due to the weight of these trucks. When pressed for reform, we are all told "nothing can be done about it". Well something could be done, but the mafia running the trash business would break your kneecaps. Hmmmm... have you noticed a correlation between States with heavy organized crime influence and States that have depressed economies?
31. Been There, Done That: When we first moved here, it seemed like there would be an endless list of things to do, places to go, and things to see. But after a while, once you've done the same thing over and over again, the thrill is somewhat diminished. It is fun to visit the local wineries, but after you've been to the same one a dozen times, there is little that is new. Ditto for the local restaurant. And once you've been to a dozen wineries, well, they all start to look the same. Granted, some folks find comfort in this sameness, and go on doing the same thing, over and over again, year in and year out. But for me, I like to have some change in my kibble.
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These are just some of the reasons we are selling. There are many more as well.
Now, reading this list, you may think I am terribly unhappy with the house. Not so! These are just the reasons AGAINST owning it. There are many more reasons to stay there, and believe me, it has been a multi-year process to weigh them.
The weather is nice, there is boating, room for hobbies, some job opportunities, space, people, friends, good food, etc.
And there are limitations to living down South, including higher insurance, hurricanes, crazy old people, and other issues.
But taking all that into the balance, it seems that, moving forward, it makes more sense to own a smaller house in an easier place to live. And this is not to say that we won't move from Jekyll, when the time is right - perhaps to somewhere that doesn't need hurricane insurance!
It is a big step to walk away from such a nice house. But on the other hand, living debt-free will be a lot more fun than owning stuff.
Now excuse me, I have to go fix one of the 10 toilets I presently own...
P.S., a friend of mine sent me this link, to a hilarious Slate article on the same subject.