Economic question

[MTGuru]

Bloomington, Indiana.

[dwest]

Bloomington, Indiana.

Cutters!

[MTGuru]

Cutters!

Yep. I'm probably in a few of the scenes if you look really, really carefully.

[mutepointe]

[missy]

Some particulars for Cincinnati, OH.........

Son #2 just moved into his own apartment. Efficency in an old house - one very large room for living / bedroom (with a fire place), a kitchen and a full bath. Rent is $470 per month, heat and water included. Air conditioning will be on the electric bill, so not sure what that will come out to.

He's within 5 miles of the University of Cincinnati, 6 miles of Cincinnati State, 2 miles of Xavier University, and 7 miles of downtown - all on the bus line if he decides not to drive.

One off street parking space. He's a young male (19) so his insurance is still high. A "mature" female, with an older car, shouldn't pay more than $200 every 6 months, conceivably less if she doesn't have full coverage.

Catastrophic health care is about $200 per month.

Internet with a trunk fee is $40 per month (you don't have a land line, but need to pay a small fee for the line).

Cell phone - not sure because we've had our service for years, but we have a local choice in addition to all the national ones and it's very good service.


If she wasn't opposed to outright ownership - we also have a lot of foreclosures and short sales. My other son just closed on a 3 bedroom, 2 bath house built in 1915. Needs some cosmetic work, but in fantastic shape overall. Short sale for $60,000. Our property taxes in the city limits are a bit high, but even with that and insurance his payments are going to be much less than his brother's on a monthly basis.

[talasiga]

A European colleague of mine is about to retire and asks me how much it costs for a single person
to live a year in the USA. She lives pretty frugally but says she wants a reasonable
small apartment, to operate an automobile, to eat in restaurants occasionally. My impression is she
wants middle class but frugal. I don't think she wants to live in some terribly expensive city.
I don't have this info and I wonder if you'all can help. Thanks

I think she should look at Crete rather than the USA.

[dwest]

I'd still say this is cart before the horse, find schools first than do a cost of living comparison between communities. Wouldn't do much good to live in an inexpensive college community if they don't have a good ornithology program. I'd be very careful weighing the pros and cons for Crete. There are those who are con Crete.

[mutepointe]

Cretins live in Crete.
I think this person should decide where they want to live based on climate zone or what kind of fun stuff they want to do. A person can live in a university city anywhere but if they want to go snow skiing, they'll have to narrow the area of possibilities down. If this were me, I would first exclude all areas where alligators can live. Then Denny.

[Denny]

Rather a problem with the last one....

I've lived many places.

[jim stone]

Thanks for all this info.

Tucson Arizona seems a possibility.
My colleague is a philosopher and there is a very good dept of philosophy
at U of A in Tucson. I think it doesn't cost a lot to live in Tucson.
They overbuilt and there seems to be a lot of vacant property.

People in an academic profession, certainly my friend (and I), know
where good departments are located in our discipline.
And some of them are located in not very expensive places.

My wife and I have been visiting scholars four times during sabbaticals
and one factor we take into account is cost of living, especially housing.

Thanks again to all.

[BillChin]

...
I think this person should decide where they want to live based on climate zone or what kind of fun stuff they want to do. A person can live in a university city anywhere but if they want to go snow skiing, they'll have to narrow the area of possibilities down. If this were me, I would first exclude all areas where alligators can live. Then Denny.

The entire thread is bassackwards. Mutepointe's approach is much more common sense. Instead, Jim starts by asking a silly question which will vary by over 200% depending on location. Even within a single town, there is usually a 100% variance in rents depending on neighborhood chosen and the size of the apartment. Europeans are typically used to smaller spaces, so a modest studio or bachelor apartment might suite them well.

The "Midwest" is mentioned, but is that European person going to enjoy most Midwest climates with a harsh, long snowy winter and unbearably hot humid heat in the summer? I doubt it. Especially as people age, those long snowy winters get harder and harder to endure, especially if they are used to relatively mild European zone climates.

I will note that car expenses are being understated in the two detailed estimates provided. The cost of owning a modest used car with low use might easily run over $2500 a year ($200 a month), a newish car more like $4500 a year ($400). What is missing is the depreciated cost of the car and needed repairs and consumables such as tires. The auto club estimates about $8500 annually for average use. Retired usually means below average so maybe half that.

Also keep in mind inflation. If the retired person's income is fixed, what covers expenses today, probably won't be near enough in 20 years. Then what? Another factor not mentioned is taxes. Sales tax, intangibles tax (a tax on investments such as stocks and bonds), can be factors. I don't know if states will tax that person's income, but if they aren't now, they may in the future.

Best to narrow down the search, then focus on more details. Estimates seem to be $2000 to $3500 a month for a single healthy person with a modest lifestyle. Any more than that can't really be specified without the person answering some detailed questions. Best to overbudget because there are always surprise expenses, and the specter of inflation. Squeezing into a budget is a really bad idea if moving to a new place to retire.

[highland-piper]

I will note that car expenses are being understated in the two detailed estimates provided. The cost of owning a modest used car with low use might easily run over $2500 a year ($200 a month), a newish car more like $4500 a year ($400). What is missing is the depreciated cost of the car and needed repairs and consumables such as tires. The auto club estimates about $8500 annually for average use. Retired usually means below average so maybe half that.

Here is a specific depreciation example: My VW cost $20,000 when we bought it new, 10 years ago. So that's $2,000 a year. Another way to look at it is 200,000 miles, or $0.10 a mile. At this point it's pretty much used up, but it's still running. Who knows -- it might go another 100,000 miles. Two years ago I would have sold it for $3000; since then I've spent about $500 on maintenance and put 30,000 miles on it, so someone could, if they wanted, buy a well used, reliable car, and not spend $2500 a year, even including depreciation.

I paid $25,000 for the car before that, and it went 250,000 miles in ten years, which curiously works out to the same cost, both per mile and per year.

My '02 Ford truck cost $13,000 new (nice rebate). It's got 125,000 miles today and shows no signs of getting old -- and I tow with it.

"Average" can be misleading -- if 9 of us play $12 whistles, and one of us plays a $250 whistle, then the average whistle cost is $36 (which is three times the typical cost). Or as my favorite professor used to say, "If you have one foot in a bucket of ice, and one foot in a fire, then on average you are pretty comfortable."

[mutepointe]

Well thank you Bill for pointing out my common sense approach but I do question your common sense to go on and on about winters and to not mention alligators once. Winters may be biting cold but alligators, where they live are biting all year round.

[s1m0n]

Thanks for all this info.

Tucson Arizona seems a possibility.

As long as she doesn't look too mexican.

[BillChin]

I will note that car expenses are being understated in the two detailed estimates provided. The cost of owning a modest used car with low use might easily run over $2500 a year ($200 a month), a newish car more like $4500 a year ($400). What is missing is the depreciated cost of the car and needed repairs and consumables such as tires. The auto club estimates about $8500 annually for average use. Retired usually means below average so maybe half that.

Here is a specific depreciation example: My VW cost $20,000 when we bought it new, 10 years ago. So that's $2,000 a year. Another way to look at it is 200,000 miles, or $0.10 a mile. At this point it's pretty much used up, but it's still running. Who knows -- it might go another 100,000 miles. Two years ago I would have sold it for $3000; since then I've spent about $500 on maintenance and put 30,000 miles on it, so someone could, if they wanted, buy a well used, reliable car, and not spend $2500 a year, even including depreciation.

I paid $25,000 for the car before that, and it went 250,000 miles in ten years, which curiously works out to the same cost, both per mile and per year.
...

Looks like you are close to agreeing with me. Add your $2500 per year in vehicle costs, to fuel, insurance, repairs and maintenance and that easily gets to the $4500 annual figure I suggested using.

I am guessing that you are doing the routine maintenance such as oil changes by yourself instead of taking the car in for service. That means your costs are likely less than average and might be risky for others to use for long term budgeting and planning.

Again, best to over budget in retirement because there are almost always unexpected expenses. If they don't come up, maybe a trip back home to Europe can be in the cards. Another item not even mentioned is dental. If a person hasn't taken care of their teeth and now has chronically bad teeth or gums, that can blow a huge hole into any budget, retired or not.