The question of where to retire once you reach financial independence has come up several times in the last month. It started about a month ago when my big sister in spirit sent me an email. I’ll call her Buffy in keeping with a longstanding tradition of naming anonymous people after Buffy the Vampire Slayer characters. Her family’s location in Silicon Valley is high cost of living… perhaps the highest in the country. If you aren’t working for Big Tech, it probably doesn’t make sense to live there. We saw the writing on the wall around 2011 and realized that I can blog from anywhere and my wife’s military pay won’t adjust for geography when she’s retired.
Trying to find the best place to retire is an interesting exercise. It’s so interesting that Money and Kiplinger’s magazines seem to put together new “Best Places to Retire” every 4 months. Maybe it just seems that way to me. Anyway, Buffy is an A+ planner and she had already sent a list of things they’d be looking for in a new place. I like that it started with a list they wouldn’t be looking for:
Things NOT to look for retirement
- Jobs – No need for a job if you are financial independent
- Perfect weather – They reasoned that they could travel during bad seasons. In New England we call the winter relocation to Florida second homes, snowbirding.
- Schools – Their kids will be out of school, so this isn’t a consideration. I pointed out that there might value in a nearby university for things to do.
- Profitable housing prices – Buffy has experience in real estate investment. I think she wanted to point out that this was not really a concern. This makes sense if you are just looking for a primary residence to spend your days
Things REQUIRED for early retirement
- Nice, low maintenance house – Not everyone can put this on their list, but moving from Silicon Valley opens up a lot of options. When the average house there is probably going for $2 million, you start to think what $400-500K buys you some place like Texas… or Rhode Island.
- Decent medical facilities – Seems like a reasonable request as one hits retirement age
- Nature, but no wildfires – Clearly the wildfires last month in Northern California is a factor here.
- Low disaster risk – The hope is to avoid earthquakes, hurricanes, tornadoes, floods, etc. I think Buffy is concerned that climate change will only get worse.
Obviously everyone will have different lists of what they want in retirement. I would say that the first list is about avoiding paying a premium for things you don’t intend to use. The second list puts a premium for safety and security. There’s also a touch of scaling back and enjoying simple things like a nice evening stroll or maybe a day of hiking.
So Buffy’s husband was thinking about New Hampshire or Vermont, while Buffy was thinking about Oregon or Colorado. Then Buffy’s husband brought up Rhode Island… where we live.
Before I got to the last part of the email, I was already thinking about Rhode Island. It’s natural to think of your state and see whether it is a fit, right?
Here’s Why to FI in RI
It’s very easy to check off most of the first list.
Rhode Island is the 50th best state for business. The schools need $2.2 billion in urgently needed repairs. That kind of shortfall could be negative, because property taxes might need to be raised. That’s one of the things Buffy wants to avoid. However, overall jobs and schools are not great here.
Rhode Island doesn’t have perfect weather with a few months of snow, but it’s not bad. My area, Newport, RI gets less snowfall as it’s closer to the coast. The rest of the year the weather is pretty good, including the recent fall foliage. I never know where housing prices are going to go, but usually jobs and schools are an indicator. However, since this isn’t a big consideration we can just move on.
Moving onto the list of positives for Rhode Island, it looks like a good fit for Buffy. Housing prices are higher than much of the country, but still a fraction of what they are Silicon Valley. It’s a relatively short drive to Boston’s medical facilities which has some of the top hospitals in the world. Rhode Island is aptly named The Ocean State for a reason. Our nature is miles and miles of coastline and beaches, but that qualifies as nature, right?
The disaster risks in New England are largely related to snow storms. Disasters like earthquakes and tornadoes are black swan events and generally very tiny even then. We do get hurricanes, but they are usually fairly weak by the time they’ve traveled up the Atlantic coastline. I don’t want to minimize the snow, but we still have plenty of homes built in the 1600, 1700, and 1800’s, so that’s an indicator that they may be around for another hundred years.
That’s not to say that New Hampshire, Vermont, Colorado, Oregon are bad options either. I can certainly see why some people would consider them. There’s no right answer and it’s highly dependent on the individual. For example, the popular financial independence blog Frugalwoods wrote about Vermont. Similarly, Tanja from Our Next Life wrote about why California is right for them.
I’m not really convinced that Rhode Island is our final destination either. With two kids 5 and under, we’ve got another 12 years to gather more information. Twelve years ago I would have told you that the Boston suburbs would be my forever home. We’ve been to California for 5-6 and to Rhode Island for almost that long. Rhode Island certainly checks off a few boxes for us or we wouldn’t be here now.
What’s your best state for early retirement? Let me know in the comments.
i live in RI. Many RI’ers retire outside of RI to escape RI’s high property taxes. Additionally you will get less house for your money when you purchase a retirement home here. RI government has always been corrupt [Google Rouges’ Island, 38 Studios or , heck just Google “RI”]. Yes, we have beautiful shores and wooded trails but financially I would do my homework very thoroughly first.
Those are some great points Steph. I live in Rhode Island myself (just in case that wasn’t particularly clear). I admit that I have glossed over the issue of property taxes, because our options with my wife’s duty station is limited. Massachusetts is a little better percentage-wise, but the houses are much more expensive, probably double due to the demand in the Boston area.
In fact New England’s property taxes appear to high across the board:
WalletHub has a very good chart property tax chart. As an example, Vermont and New Hampshire, mentioned by my friend are worse. The page also shows car taxes, which are the highest.
However, I don’t think someone coming from a $2 million home in Silicon Valley (which can sometimes be little more than shack) is going to be upset about dropping their property taxes from $16,000 to $6,000 a year. It’s definitely something worth considering especially since Colorado looks dirt cheap in comparison.
It’s amazing you were able to mention RI government corruption without bringing up Buddy Cianci. That just shows you how true it is.
Your checklist for retirement locations is very good. I know there is no perfect place, but being from the Dallas area I know I would struggle with the cold winters in RI(in-laws are from NY so I’m familiar with the cold). Of course we have tornadoes to worry about.
We may snowbird to Jacksonville, FL at some point in the future. With my wife and I originally from the Boston area, the RI snow isn’t too bad. Newport actually gets half the snow of some Boston suburbs. I was curious why Texas didn’t make my friend’s list of states.
We are in the exact same position as “Buffy.” Many people I know are moving to the Portland area.
Your checklist is similar to mine, but good weather is a high priority. Sure, traveling during winter sounds good, until you get to the point where you are no longer able to do it.
So far I haven’t found a place I’d rather live than California, but I hope others chime in with other locations for us to consider!
I’ve read that Portland is getting expensive with everyone going there. Joe Udo from Retire by 40 is from there. I think he’s one of many personal finance bloggers actually. It’s interesting to see how much the property values have gone up and it sounds like he’s considering possibly moving at some point.
I’m sure that Buffy appreciates that her location options and list are validated. ;) Some thoughts on Texas and Florida: we had a cursory interest in considering these states as a base after our kids fly the coop. But they do have a higher risk for disasters being in the hurricane belt, and the hubby made a special plea…”Please low humidity!”
California is no better with its droughts, fires, earthquakes and occasional flooding (I read somewhere it was the most disaster prone state in the US). I also consider sunny California as a great base to build wealth and it does have exceptional medical facilities, but the COL is definitely ridiculous. Since no place is really perfect, “snowbirding” and “summering” will be in the equation! We’ll have to keep this dialogue open. :)
While all of Florida has humidity and hurricane risks, those are issues primarily for the coastal regions of Texas. Tornadoes, that’s another story.
When my job transitioned from on-site to work-from-anywhere a few years ago I finally left silicon valley after three decades, but I stayed in California– along the SoCal coast. My primary motivation was family related, but I’m happy with the way it’s turned out.
Maybe it’s not for most early retirees, but state income tax is a major expense for me, it’s more than my rent. I probably could have saved a lot by moving to Seattle or Tampa, but my feeling is the good year-round weather here is worth the extra cost. A walk in the park here is great year-round, except for those rare rainy days. Housing actually turned out to be a reverse sticker shock, same house costs less than half here compared to my old San Jose neighborhood.
As for natural disasters, I don’t let those affect my life any more than terrorist attacks. More important to me are a convenient walkable neighborhood where I only rarely have to drive, and I’d second the idea of a low maintenance home with easy access (1-story ground level or high-rise with lift) and nearby medical facilities.
Besides these factors I think of the 3 C’s– climate, culture, and cost, and here in the US it’s a trade-off. Cost favors cities in the midwest like Pittsburgh or Indianapolis. Culture rules in NYC, Boston, DC, and the eastern seaboard. Climate I think is best along the west coast.
I love the 3 C’s idea. That’s excellent. One thing I’ll say about the climate in NorCal was that it was almost too perfect. My wife and I missed the seasons after a few years. We found it easier to remember the mile-makers of life with the backdrop of leaves falling, snow, or rainy springtime.
Sorry if this posts multiple times btw, had some weird error on my wifi
Laughing hard here: I clicked the last pingback link from Tanja’s post on retiring in a high tax state to see “Why Fi in RI?” but I didn’t realize there were really two different nearly identical links. The first one I clicked went to this scam blog that stole your entire post word for word and then ran a thesaurus program on it to change a bunch of words to synonyms, which had the effect of turning it into nearly complete nonsense, like this gem:
“Her circle of relatives’s location in Silicon Valley is prime price of residing… possibly the very best in the rustic. ” (Country means the same thing as rustic, right?)
Here is the link to this jerk blog: https://www.insuranceflavor.com/why-fi-in-ri/ (sorry to add another link to increase his page rank, you can delete the link after you find it)
ANYWAY I just came here to really read thoughts on Rhode island, which I haven’t seen as a popular destination for anything basically, so thanks for the post!
Thanks for letting me know about insuranceflavor.com stealing my content. I had seen them doing it, but I didn’t think it would reach real people. (And you didn’t increase any page rank to it, because comments to don’t typically pass pagerank.) Now, I’ll actually have to look into doing something about it.
I appreciate you stopping by. I’m sure Rhode Island appreciates it too. Whenever I travel people just assume I said Long Island and tell me how much they love New York City. Feel free to stick around, I try to write a couple times a week and it’s rarely localized to any specific state.
I also live in RI (Providence). I could see why people would want to FI here. I mean PVD has some of the best restaurant culture in the country. Newport is fabulous for boating, nature, and CLAM Shacks. Yes, property taxes are high, but not as high as some places like New Jersey. We can drive to six states in about 2-3 hours. The weather isn’t as bad as every body thinks it is. It is cold, but I am from MN that is cold. We bought a house here because it was/is cheaper than MA.
I think someday we will have to go back to MN because of our aging parents, but I do hope we continue to have connections here. I like being a Rhode Islander. And the taxes aren’t that bad compared to other places. We need to create an FI group for RI.
I’m on board with creating a FI group in RI. We don’t have many personal finance people in RI. I guess that’s what happens when you are a small state.
I’m in Newport. I like that there’s always 3-4 great things to do every day in the summer. In the winter, everyone gets out of town, so every restaurant and picturesque hotel is dirt cheap. I’m about 5 minutes to the beach, which is great for walking the dog and just connecting with nature.
I don’t analyze the costs of taxes too much because I hope we’ll have more than enough money to not have to think about it too much.