Ask MetaFilter questions tagged with retirement

Is the stock market's real long-term return just 2 percent?

aw_yiss — Sun, 12 May 2013 05:42:43 -0800

I was looking around for information on long-term investment planning and I ran across this page, which says that after adjusting for inflation, long-term stock market returns are only 1.9% before taxes. The whole site seems to advocate this sort of really creepy gold fetishism that's been popping up lately, so my natural reaction is to dismiss it. But I still have doubts, and this plays into my anxieties about whether retirement savings is worthwhile at all. Help me debunk this? (Existential crisis inside.) Okay, here's why I care:

At 10% return, retirement accounts just seem immensely practical. I'll have enough of a cushion that sometime in the future I can take a big hit in income and just use Roth contributions to cover the gap. Or (if I'm very, very careful, or the laws change) I could start a SEPP distribution before retirement age.

At 2%, the situation feels absolutely different. Not only will I need every penny of my retirement savings for, y'know, retirement, but non-market risks eat up all of my returns and then some. To start, I'm still at an age where there's a 25% chance I'll just drop dead before I can retire. Current politicians' talk of raising the retirement age increases that risk. And if the Baby Boomers are any indication, there's a definite chance that upon retirement, I'll become a reactionary and donate all my time to the election campaign for Ron Paul's grandson, which – ew. The expectation value of my savings shows such a loss that, God help me, retiring on catfood and government cheese looks almost prudent.

So yeah, I guess, followup question: If the returns really were just 2%, how could I feel more okay about retirement, and not that I'm throwing my money down a black hole?

That's no 401k, that's my mother-in-law!

taltalim — Wed, 08 May 2013 16:29:02 -0800

How can I determine the hidden fees associated with my employee 401k through Prudential? After watching this documentary and reading the comments, I'm curious to see how much my fees actually are for my employer-linked 401k with Prudential. I've gone up and down through the Prudential website, but haven't been able to find any information other than expense ratios. Is there a way to figure this out? I'm young, newly investing, and pretty naive about a lot of this stuff. I've read what I can, but I'm having trouble finding specific details about my specific investments.

Which retirement plan should I choose?

Anonymous — Wed, 08 May 2013 10:10:46 -0800

I find this comparison really confusing. I'm starting the job in August. I'm an early 30s married woman who would like to become pregnant in the next year. The contract only lasts through the end of 2014. I do want to continue on working there, but I have no idea if additional grant money will become available at that time. Which plan would you choose? Or, failing that, which are the important factors to consider?

Retiring Early and Yes I am Lazy!

locussst — Sat, 04 May 2013 14:15:31 -0800

I am 28, have a $60,000 a year job in Accounting and expect to be making close to $100,000 in seven years (after that, raises more uncertain). I want to retire some time in my early to mid 40s. I have a wife who is 34 and works as a retail manager (making about $40,000 a year). I am planning on living off of 20% of our after tax income (excluding mortgage payments). We currently do not have a mortgage but are planning on a house soon. We would like to travel at will and have the (option) of not working ever again. We also do not mind retiring in a cheaper location (Costa Rica, etc) to save on costs. What investment vehicles should I be considering given that I am retiring early? What kind of jobs that are part time could a retiree easily perform? How much money should be going in employee 401k type programs vs. individual investment options and IRA contributions. I assume I should contribute the max on my IRA and 401k. Should I also do this after retirement? Where can I get a 5+% return with "relatively" little risk? What is your opinion on immediate annuities?

Any advantage to IRA if I can't deduct contributions?

primethyme — Thu, 25 Apr 2013 15:09:35 -0800

I'm taking a new job with a very small company that doesn't offer a 401k. My spouse's job does offer a 401k. Based on what I see on this page, with our income, we would not be able to deduct any contributions I make to an IRA, and we're not eligible for a Roth IRA. So what is my best retirement investment strategy? Is there any substantial benefit to using an IRA rather than just a regular brokerage account? We'd like to save more than we can by maxing out my spouse's 401k, so just adding it in there doesn't really solve the problem. If I understand what I've read correctly, I wouldn't have to pay capital gains on any sales within an IRA. But it also comes with serious limitations, like additional taxes if I withdraw before age 59 1/2. So I'm not sure if there's a net gain. What else should I consider?

Rent vs. Buy: Retiree edition!

elizeh — Thu, 18 Apr 2013 08:39:57 -0800

Single retiree is selling a big paid-off house and asked me and huzzeh for help deciding whether or not it makes sense to rent an apartment or buy a condo. What questions should we consider to help make this decision? I think buying a condo makes more sense, but that's just a gut feeling, not an educated opinion. Can you help me think this through?

Factors that may or may not be relevant:

-Rents are expensive compared to selling prices in her city
-If buying, we'd advise buying in a (reliably) hot neighborhood to maximize the appreciation of the condo.
-She will be largely living off the proceeds of this house sale, as SS and pension do not cover much. Not sure if it makes sense to tie up that much money in real estate? Or maybe she could just make a big downpayment and get a cheap mortgage, even though she could buy outright?
-She's in pretty good health, but not great. Obviously there's no way to tell, but our working assumption is that she's got about 10 years of independent living ahead of her.

What else do we need to consider?

Financial Planner or Advisor in San Francisco

polexa — Tue, 16 Apr 2013 22:57:15 -0800

Do I need a (fee-based) financial planner, advisor, or tax accountant? Recommendations for one in San Francisco? I'm almost 30, almost debt-free, and feeling out of my depth as I try to figure out what to do about non-retirement savings. I'm getting to that place where I'd like to take better care of my finances. I've done a good amount of reading at various points in the past so I'm not totally clueless.

But besides starting retirement savings (Roth IRA, no 401k at work at the moment), paying off student loans, and having a cash emergency fund, I'm not sure what else I should be doing.

Should I be consulting with a financial planner? Advisor? Tax accountant? All of the above?

Federal Civilian Pension after divorce. (US)

1066 — Thu, 04 Apr 2013 13:51:16 -0800

Asking for a friend. YANHL. A couple has divorced, wife has a local civil service pension and husband a federal civilian pension. The judge ruled they would split each pension 50/50, instead of letting them keep their own. She has sent her court order to his pension board and has received acknowledgement. She has been unable to get any answers from the pension board about what happens now. He has left federal service but has not retired. Does she have to wait until he retires to start receiving her monthly checks from the federal system? Can she start getting them when he reaches retirement age even if he's not retired? Who can she contact that will answer her questions? Would CC'ing her Senators/Rep on her emails help or hurt? Thanks.

With the Dow so high, is now a good time to start a Roth IRA?

emily37 — Tue, 02 Apr 2013 16:50:14 -0800

Hello! I'm in my early 30s and am finally financially stable enough to start socking away some cash in a Roth IRA (my employer does not offer any retirement plans). However, I'm a little worried that, with the market being at such a high, that something will happen due to all the current BS going on with Congress and the market will crash again, and I will lose a good chunk of money. Is this fear totally unfounded? Should I just start my Roth and hope for the best?

Saving for retirement with no employer retirement program

Conrad Cornelius o'Donald o'Dell — Sat, 23 Mar 2013 14:46:44 -0800

How to save for retirement when my employer offers no retirement savings program and I cannot contribute to an IRA tax-free? Details inside. I am 35, married, and live in the U.S. (New York). My current employer does not offer any kind of retirement benefits—no 401(k), nothing. They've hinted they might, and I've made my interest in such an offering clear, but it's a small company and I doubt we'll see any movement on that front.

Meanwhile, I have for many years maxed out my IRA contribution annually. It's not nearly as much as you can put into a 401(k), say, but it's not nothing. However, my wife's income is now much higher than mine, meaning that my IRA contributions are no longer tax-deductible. (I also cannot start a Roth IRA for the same reason.)

So what options, if any, do I have, aside from socking away savings that I've paid full taxes on? Thank you.

401k/Roth undisclosed "Forfeiture Fee" halves retirement rollover. Help!

iheijoushin — Mon, 11 Mar 2013 08:50:43 -0800

I recently rolled over my old 401K and Roth accounts through an old employer and held by ADP. Throughout the process, I was told the only fee would be the $50 "account transfer fee". But when the checks arrived half of my money was missing! A year ago I left a crappy retail job for a much better job at a software company. While working at the retail job, I made significant contributions to my employer sponsored Roth account controlled by ADP Investment Services.

Over the last year, I watched as my account not only took a significant loss in terms of its investments, but also was chewed up by fees. I made several calls to ADP's India call center, whose nice employees were unable to answer most of my questions regarding a Roll Over, but did help me get the ball rolling on paperwork. They informed me there would be a $50 account closure fee. Fine, I thought, better than losing double that amount with another bad year of investing and fees.

Fast forward a few weeks later, and I receive my disbursement checks totaling half of my investments. When looking through the account statements I see that nearly half of my Roth was taken as a "Forfeiture Debit". I was incredulous that I would lose HALF the value of my retirement account! The folks in India could only be sympathetic to my first world problem but could neither fully explain the fee, or explain why I was not notified that half the value of my account would be taken.

I'm almost 30 and am trying to play catch up with my retirement accounts after being dealt a pretty bad hand with the economy. Losing 50% of the value of my Roth is really upsetting, especially as I contributed generously at a low-paying job that offered next to no matching (.5% of 1%).

As someone who slogged through some pretty awful customer service jobs, I have kept my cool throughout this frustrating ordeal. But I am not getting the help I need to feel this issue is resolved. GetHuman.com's numbers are all to ADP's Cobra Assistance Branch and I am at a loss of who to contact...If I had known my account would be halved in value by trying to roll over I would have suffered the continued losses and waited until I could have avoided this surprise fee.

Any help or advice would be most welcome!

Thank you.

Your dream retirement, given these circumstances?

1066 — Sat, 09 Mar 2013 21:59:59 -0800

If you were single, 53 and healthy and with an adult child roaming the Earth, where would you retire and why? Only limiting factors are 200K US in a retirement account and a pension of 40K US (with a COLA increase of $1600 each year).

Who's the kid here?

Anonymous — Wed, 20 Feb 2013 07:06:17 -0800

My mom has what seems to be undiagnosed borderline personality disorder. For the last many years, she's burned bridges at work and let her self-loathing get the best of her, to the point that she's chronically unemployed, has alienated most of her friends, and has exhausted all her financial resources. She's hit rock bottom, with $0 in the bank and debts to pay. And she's turned to me for help, saying she doesn't know how to take care of herself. I'm 26. I'm struggling to pay back my own student loans. Please help me help my mom. This is in Canada. The irony is, I work with social services agencies that should be able to help her, but she slips through the cracks in almost every area. She's got an ivy league education. She is not a minority. But she hasn't been employed full time for ages. She's worked as an "independent contractor" for the past fourteen years, and now she's 2 years away from being retirement age and refuses to claim her pension early. Also, even if she does claim her pension early, in the intervening months between now and her birthday she has absolutely nothing to live on. I know she wants me to take care of her, but I can't afford to. There has to be some alternative. I don't want my mom to be on the street.

I suggested that she go on welfare, but she seems to think that if she does so they'll make her cut out what they deem "unnecessary spending" -- her internet connection and cell phone, which she uses for job searches, her apartment, which is not subsidized housing. At my insistence, she's signed up for a temp agency and is looking for any immediate part time work.

What else can she do? How can she get some money to live on, right now?

Here's the selfish whiny kid part: I don't know how to take care of my mom, and I'm scared for her future. I don't have a partner to fall back on; I don't have siblings. She's a single mom. I feel terribly guilty for not being able to take care of her, but also fear getting pulled into having to care for her my entire adult life. Though she's close to retirement age, she's got the vibrancy and talent of someone in their 40s. There's no reason she can't work, take care of herself, and live well. But she has no retirement savings, no property, no nothing; she went completely bust when I was a teenager, sold everything, and we spent a long time living out of our car and on people’s couches while she tried, in vain, to get a high-level management job like the ones she quit, or was let go from. Since then, she’s even sold the car. Her pride prevents her from doing many things that might improve her life. How can I help someone like this, and how can I do it all by myself? I love her, and this is so painful. But part of the reason I'm struggling to pay back my student loans now is because I took them out the last time she was in a situation like this, got us an apartment and used the loans to pay rent. I'm still paying that off, and can't go into that kind of debt again.

So, I guess my question is twofold, in order of importance:
1. How can my mom get immediate financial assistance in Canada so she is not evicted, homeless, out on the street?
2. How do I deal with this issue overall? It's big, it's here to stay, and I don't know what to do. And I’ve seen a therapist about how to deal with it emotionally, but I don’t know what to actually do to prevent my mom from slipping into dire poverty. Are there counselors who deal with people like my mom? If your answer is "a social worker," in which program?

How to age gracefully, or how do the elderly transition into retirement?

loquat — Thu, 07 Feb 2013 12:19:22 -0800

As I assist my recently retired parents, I'm finding I know very little about the practical parts of traversing this phase of life. How do I help them manage their financial future, particularly with life insurance? I've read previous posts but special *elder* snowflake.. Both parents have recently retired and I've helped them with retirement accounts, COBRA, etc. The most baffling part of the process has been trying to maintain their life insurance coverage. We met with the insurance company to discuss converting the coverage they had through work to an individual policy but their "suggested" course was whole life insurance with extremely high monthly premiums for low pay-out ($600/mo. for $100k). Is this typical?

My parents are in great health, do not smoke, but as "old" people, seem uninsurable at affordable rates. How do people retire from jobs and maintain coverage? Because shopping around at 60+ for life insurance seems financially ruinous for those on a fixed income. I'd appreciate hearing how other older people have managed their life insurance or even if others have dealt with similar situations. As a younger person, my life insurance needs are quite different so it's been difficult to know how to proceed, who to trust and where to go for answers. Here I am, asking for your help. Thank you!

Tell me about your awesome Roth IRA.

chowflap — Mon, 28 Jan 2013 10:33:50 -0800

I have a chunk of money just sitting in an account that doesn't even earn interest. I'd like to park it into an IRA, but would like to avoid spending many hours researching them. I'd love to just pick a place, transfer the money over, and be done with it. What bank/financial institution currently offers the lowest fees for the best results? Do you have one that you adore, and offers a good deal? There was a similar previous AskMe question, but it's from way back in 2006, and I would assume the landscape has changed. Thanks!

Figuring out where to start with my finances

the brave tetra-pak — Fri, 04 Jan 2013 11:13:08 -0800

I am suddenly making a grown-up salary, with a retirement plan and everything. I need to talk to a financial professional about optimizing my taxes and retirement and building a perfect(-ish) machine that I don't need to think about too much. I don't actually know what this person is called. Am I looking for an accountant? A financial advisor? A financial planner? Or something else? Please help me overcome my laughable naïveté. Thanks! After a number of years working random minimum-wage jobs I have an actual career, with a high-five-figures salary and a retirement plan. There are no emergencies here -- I don't have any debt, I have 5 months' salary saved, etc -- but reading those what-do-you-wish-you-had-done-at-30 AskMe posts from last year made me realize I should really get my act together around long-term financial health and planning. I got some books to do it myself ... about six months ago. My job is extremely time-intensive and I travel a lot for it, and I realized recently that I was never going to get started on this unless I had somebody else who knew what they were doing helping me think through it and put the pieces in place. What kind of professional am I looking for? (Also, if anyone has specific recommendations around the Ann Arbor / greater Detroit area, please post them here or feel free to MeMail me.)

Saving for retirement as a graduate student.

Anonymous — Wed, 26 Dec 2012 17:49:21 -0800

I am a new graduate student and was hoping to put some money into a Roth IRA to start saving for retirement, but just read that contributions must be made from earned income and now I'm not sure if that is the best plan for my circumstances. This fall I started a PhD program that provides fellowships without a requirement for teaching or research (I mean, there are TAships and RAships, but that's not what I have). Although I pay tax on the fellowship, the university does not withhold anything for retirement and I will not receive a W-2. My impression is that this fellowship cannot be considered 'earned income' for the purposes of funding a tax-advantaged retirement account. In 2012, I did make the minimum $5000 of earned income from work earlier in the year, so I would be able to make the maximum contribution for 2012, but then I wouldn't really be able to do anything with the fund until the distant future after I graduate and/or my funding runs out.

Given that I will have no source of earned income for the next several years, is it still a good idea to start a Roth IRA now, when I have the opportunity? If so, can I just use one of Vanguard or Fidelity's well-known products or is there some better option that I don't know about? I do not have good role models for financial planning in my family and feel very anxious about the possibility of making the wrong decision and being doomed forever. My partner suggested putting some of my savings into CDs but the rates look so discouragingly terrible that I feel there must be a better use of my savings. I saw some advice elsewhere on the internet encouraging graduate students to contribute in other ways to their long-term financial well-being (e.g., save aggressively for a down payment on a house or buy a car outright instead of financing), but I can't help feeling that the chance to start a Roth IRA now is something I should not pass up.

As for the rest of my financial picture, I owe several thousand in student loans, but they are all subsidized loans and the interest rate is very low (although not as low as my savings account's, of course). I don't have any other kind of debt, except for a hospital bill but that is interest free, too, at least for now. I do have an emergency fund in place, in addition to the $5000 that I am hoping to invest, but I do not have any kind of retirement savings (my lifetime SS contributions are laughably small and I have no company-sponsored 401k to roll over). My plan is to contribute $200 a month to whatever thing I go with and I would like the return to be more than the .10% I'm getting from my savings account but I do not have much time/energy/expertise available for keeping an eye on stocks and making frequent trades.

I've looked at a bunch of questions on retirement planning and dug through grad student forums for questions about finances, but I would still appreciate your advice. There is not really anyone I can talk to about this in my family and most of the people in my department are independently wealthy international students and I don't really want to talk with them (or really anyone with whom I have a professional connection) about my financial woes. Thank you!

Gift ideas for a 6-month tour, a 6-month tour...

steve.wdc — Thu, 13 Dec 2012 09:53:03 -0800

You just retired from being a high school English teacher and are now about to embark on a long mutiple country voyage on a boat with your husband. What would be an awesome gift for you from a former student, assuming space on the boat is limited? I've kept in touch with my high school English teacher for years and she just retired. Looking for a thoughtful gift that would prove to be useful during her 6-month sailing excursion. No nautical-themed gift ideas, please.

(posting for a friend)

Timing The Market Is Always a Bad Idea, Right?

COD — Tue, 04 Dec 2012 08:42:56 -0800

I know timing the market is stupid. My previous attempts at it have never worked out in my favor. My 401K is all index funds. However, with the possibility of Congress going over the 'Fiscal Cliff," it is a horrible idea to go all cash until they get it sorted out? It seems to me the market still believes they will do something, and if they don't we could see a dramatic short term drop. Given that the downside of doing nothing is a potential 10-20% loss of value versus the upside being basically the status quo, I'm not seeing much to argue against going super conservative until a budget deal is in place.

It is matters, I'm 30% total market equity, 20% Intl equity, 20% REIT, 30% bonds at present. That is a little conservative for my age, but I like it that way.

How to get my finances in order this late in the game?

Anonymous — Sat, 10 Nov 2012 18:51:17 -0800

Starting from scratch at 45 years old, what's the best strategy for saving money & planning for old age? I am 45 years old, single, and have no savings or assets to speak of. My chapter 7 bankruptcy should discharge soon. A clean slate. I earn a salary of $45,000/year in a not-inexpensive city in the Pacific Northwest. I have decent job security and health. What is my best strategy for getting my finances in order so that I can grow old with some dignity instead of retiring to a cardboard box underneath a bridge?

If I am able to keep my expenses to where I can save approximately $1000 a month, can I turn that small amount of money into a useful retirement account this late in the game? My work is probably not portable to a city with a lower cost of living, and I would prefer to stay where I am, but at this point nothing is off the table, including moving to the middle of nowhere and taking an entry level job if that is what it takes. Just looking for some ideas on how to make up for lost time, with limited resources. Thanks.

How much is enough (retirement savings)?

Anonymous — Fri, 09 Nov 2012 07:58:46 -0800

How high was your gross income when you felt able to make the maximum contribution to your 401(k)/403(b)? Is contributing close to half of my already modest income a bad idea? I recently eliminated some recurring expenses, cutting my absolutely non-negotiable monthly expenses (rent and utilities, food, medical insurance, student loan payment) to below $850/month. My monthly gross income is approximately $2350. I already contribute about 13% to my 403(b), but I worry that, even though this is smack dab in the middle of the common-sense-recommendation range, the absolute amount isn't enough. I'm thinking about establishing a small emergency fund and then increasing my contribution to somewhere in the $13,000-16,000/year range.

A few other points: I'm in my mid-thirties. I haven't ever made much money, and have only been able to afford a retirement fund in the past year or so. I currently have about $4000 between my 403(b) and an IRA. I have $40,000 of student loans, and I'm currently on the IBR plan. My job will qualify me for public service loan forgiveness in eight years, so I am mostly comfortable with the fact that I am only paying enough to cover the interest.

I realize that the correct advice is to increase my income, but I'm not sure that's a realistic option--I'm already approaching the peak income age bracket, and the only thing on the horizon is my annual 2% COL adjustment. That said, I'm accustomed to fairly severe financial discipline. I commute by bike, buy everything used, prepare most of my food and coffee at home, don't buy electronics, live with roommates (currently my girlfriend), don't have and don't plan on children, etc.--but I recognize that this will be difficult, at least until I get used to it. I regularly spend $30-60/week on...stuff...which I don't track too tightly, and I would have to rein this in.

I know that if things do go pear-shaped and I need more liquid cash, I can always modify my contribution and the money will be there in my next paycheck. But, I'm afraid that I'm not thinking this through very well, and this post reinforced my suspicion that I may have different (and potentially unhelpful) ideas about money than most people do.

Would I be better off spending the money on therapy to address my anxiety about being destitute in my declining years? (For reference, after my grandfather developed Alzheimer's, my grandparents burned through the better part of $1M USD, and this has, obviously, had an impact on how I think about retirement savings.) Is this a horrible idea? Have you done something similar? How did it work out?

Can I quit my job?

Anonymous — Thu, 04 Oct 2012 18:07:07 -0800

Should I quit my job? Much more inside. 20+ years in US federal government job. Pays well, is no fun. Been the same grade since 1996, been on dozens of interviews, can't get promoted. Pay freeze plus being out of step increases means I haven't had a raise in three years and may never get another. I'm going backwards and have been for a while.

I have some fatal flaw, I am somewhat out of step with my co-workers. My wife and I are DINKs, everyone else there is mostly married with kids.

It's pretty conservative, the ideal employee is a Catholic elementary school Catholic high school grad who wears a shirt and tie or skirt and blouse to work every day. I like polo shirts and khakis. They talk about their kid's soccer games and real estate taxes, I yawn.

I've basically had four jobs in the 20+ years. I think I'm seen as a plugger, but's it kind of hard to tell. I had a pretty high-vis job from 2000 to 2007 which I really thought would be my stepping stone but nothing happened. The project wound down and I moved on.

I fail every 'be happy at work test.' I don't have a best friend there, no mentor, I mostly stick to myself. I think I'm seen as 'he knows what he's doing but is kind of a pain is the ass/tends to run his mouth' but I can't really be sure.

We have plenty of money. Our house is almost paid off. My mom is close to death and I'll get a few dollars when she goes, my MIL is the same and we'll get a condo worth $150K there.

I don't have some dream career or volunteer gig in mind. I'd like to scale way back, buy a one b/r condo in a seashore community and just walk on the beach.

My only concern is health care, though we are both in excellent health. I'm around 50, my wife is a little older. If I worked I'd like to buy and sell antiques, be a handyman, or mess around with cars.

We could scale way back, sell one car, use less, consume less, travel some and enjoy life a little.

I'd love to just get up from my desk one day and never go back, but I'm a little nervous. I'm sure I'm not cut out for cubicle life and 20+ years of it has left me fried. I'm not the person I used to be. Can I do this?

Retirement Hideway?

Anonymous — Fri, 07 Sep 2012 08:20:52 -0800

Anyone have recommendations on a hidden paradise to retire to in 10 years? I'm in the midst of a divorce and realize that I soon I will be alone and able be to make decisions on where to retire, in ten years or so, without consulting a wife. After 16 years of marriage this is one glimmer of light in an otherwise depressing situation. I'd like to start planning my retirement location for periodic visits until I retire, learn the language if needed, and begin learning about the culture, history, and keep tabs on local events.

Here's my wishlist:
1. Near an ocean, preferably as close the ocean as possible. (Tropical or 4 seasons ok). I currently live in a high desert region.
2. Small, out of the way, and not a known retirement community (i.e. South Florida).
3. Able to exist with a moderate income. Not rich, not poor.
4. Can be anywhere in the world as long crime level is reasonable and the government is relatively stable. Though I'm not that much a fan of southeast Asia.
5. Adequate and available health care.
5. I basically plan on enjoying the ocean, reading, walking and enjoying the community.

give me a home

wandering_not_lost — Sat, 25 Aug 2012 17:12:22 -0800

Thinking of retiring in 10 years. Where? Criteria:

*East Coast, USA
*mild climate (not HOT, little or no snow)
*CHEAP ($35,000/year for two people)
*not depressingly sad (West Virginia sounds interesting, but boy does it seem sad)
*we are of European descent
*lean very liberal, not libertarian
*prefer suburbs or rural

Any ideas?

Would You Move for Better Schools?

Anonymous — Sat, 25 Aug 2012 16:25:58 -0800

Moving to a better school zone. Should I do it? Tough decisions concerning moving, staying put, and financial future. Situation:

1. Own nice home in nice neighborhood which is centrally located. It's a quiet subdivision with big yards and sidewalks. It is one mile from younger child's school. We've lived here for 14 years. Will own house outright in three years time -- we owe about 13k on it. Have two kids, ages 9 and almost 12.

2. Eldest kid started middle school this year (6th grade). We are zoned for "urban" middle school. School has a D grade rating from the state. It has a bad reputation and plenty of people do their best to avoid this school. In my neighborhood, and neighboring neighborhoods, there are many families who fabricate addresses and produce false documents to get enroll their children to better school in the same district. In my neighborhood, there are two kids who go to the "bad" middle school, and one of those kids is my kids. There are two other small subdivisions close to mine. I know a lot of these kids in the neighborhood. Without exaggeration none of these kids go to the "bad" middle school. The high school we are currently zoned for has a bad reputation as well and many people flee to avoid it. The "good" high school in our area is 1000 students overcrowded.

3. This summer, my spouse and I chose to go through the process the "right" and "honest" way and apply for a variance to the better middle school that is 2 miles away from our home. We were denied and appealed. The appeal was denied. We appealed the appeal and were denied again. At that point, the appeal process was exhausted. That was it. No dice. So, we start to panic a bit and put our house on the market.

4. We are working with a realtor. Realtor is neighbor and acquaintance from high school. She is nice. She is competent. She is offering us no discount. We didn't ask or expect one. We will pay 6%. We signed 6-month contract. There is a $500 fee to break contract.

5. We have been house hunting. There is hardly any inventory in the good school zone (same district, just better zone). The houses that are in the "good" school zone are expensive and a lot of them are not as nice as my house. I keep comparing. It pains me to pay so much for a "downgrade."

6. When I explain situation to friends, acquaintances, and coworkers everybody is baffled as to why we did not produce and address. We have close family who lives in good middle school zone and could use their address. They have offered to put my name on utility bill and could help me get on other necessary documents that the school necessitates.

7. Spouse and I (especially me) are starting to get serious cold feet. I do not want to move. I feel like I have made huge mistake. I feel like breaking contract right now and staying in my house and going the dishonest route to get my kid into better school.

8. There are no quality private schools around. The closest one is Christian private. We are not religious. There are Catholic privates, an Episcopalian private, and a Jewish private. They are quite a distance away, expensive, and don't have great reputations. Most of these schools are suffering because of the economy. The have lost students and tuition. We believe in public school and aren't really interested in sending our kids to a private school that is affiliated with a religion. There are no secular privates, charters, or magnets. This is fairly small town Florida. Options are limited.

9. I am aware that there are many factors that can cause a school to earn a D grade and a bad reputation. My child's current, and zoned, middle school heavily emphasizes anti-bullying. It discourages the use of the provided lockers. I guess too many students congregate/store drugs/fight at lockers. I don't know. They have signs everywhere that give you the impression that behavior problems are rampant. There are posters everywhere about respect and bullying and a signs in the hallway that say "keep moving, no talking". The segregate kids by grade, which is fine by me. The word is that the PTA and School Advisory Council are dismal. Parent participation and presence dismal. My kid was pushed three times on first day and slapped a few times in PE. Evidently in PE class some kids were slapping everybody on the back of the neck. My kid didn't seem too phased. It might be normal middle school antics.

I am having a hard time with this. I feel like we are making huge financial mistake by moving. My quality of life wouldn't change much -- we would just have a longer mortgage payment. I would basically be in same town, with slightly higher property taxes and a bigger mortgage. It is still a lot of money. Some friends say get the hell out of that school. Some friends say it's fine. I feel like an idiot going about the variance route when all of my friends and neighbors got an address from a friend or family member and are sending their kid to the school of their choice.

Is moving to another school zone, in the same district, the right thing to do? What factors should I be considering that I haven't stated? Have you done it? What are your experiences? Also, how should I handle breaking my contract with my neighbor/real estate agent who has spent this week showing us houses and dealing with paperwork, listing my house, taking pictures, delivering copies, etc. The contract states there is 500 dollar fee if broker and seller mutually break contracts. I wonder if our agent will get half of that. I hope so. Is there any way they can not agree and keep the house listed for 6 months? They say they will get the 6% commission if I sell it 6 months after the contract has been broken. No problem for me because I'm not going to sell it.