<p>I believe that cost of living in NYC now (not few years ago) is outrageous. My S. lives in NYC. He bought very old fixer upper apartment 10 years ago for $160 k. Now it is over $700k. Who can afford it? I would not even want to live there. It is by no means in any expensive part of NYC. Everything is much more expensive. Imagine, if you bought something like this and lost your job? Downscaling in this situation means leaving NYC and adjusting to totally new live style. $200k / year will not afford you buying a real estate in NYC. Renting apartment in NYC? I do not know how if you need to feed family of 4. However, $200K in Ohio / Michigan is a very comfortable income. How many jobs in Ohio / Michigan will pay you $200K - not many, even with 2 people combined income.</p>
<p>I would love to move back to New York City, now that my son is in college.</p>
<p>But I don’t think I can afford it.</p>
<p>When I got out of law school in 1979, I rented a one-bedroom apartment in a new building on 72d Street and Third Avenue. The rent was $688 per month; my starting salary at one of the big Manhattan law firms was $28,000. I thought I was rich!</p>
<p>By the time I got married and gave up the apartment, eight years later, the rent – even though the apartment was subject to rent-stabilization, which limited the amount of increase every time the lease was renewed – had gone up to about $1200 per month.</p>
<p>Now, I would guess that that apartment rents for well over $3000 per month. Way more than I could, or would want to, pay.</p>
<p>Besides, I have more “stuff” now, and would be very reluctant to live in such a small space again.</p>
<p>I’m thinking of Washington Heights or Inwood. Or maybe Queens. But it’ll be a while.</p>
<p>Especially since I don’t know when my ex and I are going to be able to sell the house we still co-own.</p>
<p>Donna</p>
<p>Let’s say you are working in a city like Columbus, Ohio right now with a house that you bought for about $200K back in 1990. Mortgage nearly paid off. You are making about $150K a year combined; part time work for spouse; you are the main bread earner. Your job is terminated, and the prospects are not good in finding anything in Columbus, anywhere close to what you are making. A job opportunity arises in your field for for $200K. Sounds like a good, deal? The housing really could be the issue in this case. If you want a comparable neighborhood, the cost of housing is really going to be an issue. That is even if you can get close to the market value of your home from 6 months ago, say the company buys it at that price. Even if you can get a guaranteed mortgage for the house you buy here. If you have kids and want a good, safe school district, and similar square footage, forget any acreage, you are going strapped. </p>
<p>We were in a situation similar to this 10 years ago. The writing was on the wall for H’s job and there just were not very many positions in the entire area that used his skills. Whereas in NY, he could get any number of jobs in his field. We could have sucked it in and perhaps changed careers then, maybe I could have gone back to work, but then we got a sick child. That swallowed a lot of our savings and left things even more uncertain when the job opportunity with a nice income increase came up in NY. So we moved here. I don’t think we netted any more than we did back west after the increase in taxes, mortgage payment and tuition (we put our kids in private schools because we did not initially find a house and did not want to move them twice in a short period of time). However, we had more job security in that there were more opportunities for H in NYC. This is what served us well here in the last several years.</p>
<p>I don’t expect a lot of sympathy for vast majority of us who have to downsize these days, except for those who have to downsize to a point where health, safety, etc are endangered. But “empathy” is a whole different thing. I CAN empathize with those families, yes, even the well to do who are going to have to give up what they had expected or become accustomed to having. And I sympathize with any family whose home life is disrupted with job loss, home loss, life loss, illness, regardless of income level, asset level. Those things are traumatic. Just as we bring dinners to families with losses even if they can afford the food, help with ride and child care even if they can pay for help.</p>
<p>This observation probably has made here someplace, but on the notion of $200,000 being so much everyone (early in the thread) would be on easy street can be misleading. In fact, that individual may be worse off than a married couple earning $150,000. The issue is the nature of the tax system. The tax system takes a lot of money in the form of phase out from these people, and often adds the AMT. Hence, if you get a finance guy to crunch the numbers, it is possible depending on where one is living and the situation that the real income for a person earning $100,000 is hire than one earning $200,000. Part of the problem is also what the government is using for rich. The scary thing is they are keeping to the old definitions because they collect way more taxes (AMT is the poster child for this). But listen and read carefully and you will $75,000 for a single or $150,000 for married are at the top (not middle class according to the government). A person/family who gets an AMT hit for $5,000, and has one child, has lost the $5,000 deduction for the child and lost the equivalent amount for 2 other children (they don’t have) depending on their tax rate. Which means, of course, it is wiping out other deductions. Only point is, that it is never as clear as it seems. One would like to assume that as you made more you would get to keep more, but it is clearly not the case. Anyone who has gotten a small raise that dumps them into the next higher bracket has had this experience.</p>
<p>When we actually inched over the very lowest rate to the next rate I was told that only the income over the level was taxed at the new rate…perhaps that is not accurate? In any case, does this family get its income from one salary or 2. In which case, and totally understanding her illness (been there done that) they are still doing pretty well… the problem was in feeling that we are entitled to our plans…plans are great when they work out but there is no right to expectations being fulfilled.</p>