Relocation and Cost of Living Considerations
Don't let a cursory review of a few online calculators give you a false sense of fear, or security.

You may be asking yourself, "Why should I be interested in the cost of living in another city?" After all, things are going well, you have finished a recent round of training, and your review was strong; you are all set, right?

However, when you least expect it, an email job alert from an online job board arrives and the opportunity has your name "written all over it". But there's a hurdle; it’s on the other side of the country, yet – in a very nice city, has a great salary range and is in a new state-of-the-art facility where people are doing work on the cutting edge of technology related to your career.

Over dinner you discuss it with your spouse, fully expecting to be laughed out of the room, only to find that that your significant other is, well… ready for a new adventure.

Suddenly, you are faced with a decision which goes beyond just saying “yes” to another job across town. Given the state of our economy, many of us are confronted by this issue now. Be prepared!

In order to begin the process of preparation, one of the first questions to consider is, "Where do I want to live?" Answer this question from the following two perspectives:

  • From the "ideal" perspective - based upon your personal desires with no pressure applied.
  • From the "pressure-applied" perspective - A job loss forces a decision to relocate.
In both cases, rank your locations according to your desires. The list for #2 will probably be longer than for #1. 

The information below provides an overview of the issues related to cost of living comparisons between cities. Delivering a full explanation is beyond the scope of this writing. However, if you will review this carefully and take time to look at the links provided, I believe you will have the basis for making an informed decision when the time comes.

A. Sources of Good General Information

City-data.com: http://www.city-data.com/

This is a low-key website crammed with good information. Here one can find detailed information on population, home values, schools, etc. Be sure to see:

The Retirement Living Information Center: http://www.retirementliving.com/RLtaxes.html

One of the very best sites I have found. From here you will get a great overview of taxation issues. By clicking on various state links, you will find accurate C.O.L. information. True, this website is oriented toward retirement decisions, but it is thorough and updated.

Moving.com: http://www.moving.com/

Ignore the banner ads; the good stuff is found in the middle and at the bottom of the page (look under the dotted line). Look for the 6 Categories of information:

  • Moving
  • Mortgage
  • Storage
  • Insurance
  • Real Estate - 3 good tools for comparing your present city of residence to another.
  • Home Services

There is also a specific zip code-to-zip code comparison tool here: http://www.moving.com/Find_a_Place/Compare2Cities/.

City Profile Report: Enter zip or city/state to get good info on any location: http://www.moving.com/Find_a_Place/Cityprofile/index.asp?wtid=271

Bureau of Labor Statistics: www.bls.gov/ - details, details and more details.

B. Cost of Living Calculators for an "overview" - only!

There are many cost of living calculators offering side-by-side comparisons from city to city. If you are lucky enough to live in one of the cities used, then you simply plug in your salary figue; select your current city of residence; choose the city you want to compare; press a button and the results are provided. Here are examples of commonly used calculation tools:

Sperling’s Best Places – C.O.L. Calculator: http://www.bestplaces.net/col/

Bankrate.com – C.O.L. Calculator: http://bankrate.com/brm/movecalc.asp

Using the results from this calculator one can compare more than 60 specific items; from the price of a beer to the cost of tire balancing. Bankrate.com also offers a calculator for many other financial questions.

http://bankrate.com/brm/calculators/calc_index.asp

C. Important Details You Cannot Ignore! Read Carefully!

Missing from the above calculators are these important factors all of which have a significant influence your income!

  • Income Tax
  • Property Tax
  • Sales Tax

 These important elements vary widely due to differences in amounts and methods, used by states, cities, counties & communities to calculate values. It is very difficult to include all combinations in a simple calculator. The tools listed above DO NOT include this information.

In my opinion, because this information is not provided, the above calculators should only be used as an overview; not your final decision making tool! Though simple to use, the results, if used alone, can be misleading and will not provide you a clear picture of the true cost of living.

  • As the saying goes, “The devil is in the details.” Here are some details for you to consider and investigate further: Property taxes are levied by local municipalities and/or counties. States set an amount, or limiting rate, under which local governments abide. For the best overview of each state, use Retirementliving.com: http://www.retirementliving.com/RLtaxes.html
  • Personal Income taxes: Seven states have no income tax. Move to these, right? Not so fast; property and sales taxes in these states serve to offset the lack of income tax. Tax on land and buildings are the biggest source of income for local governments. Again, refer to Retirement Living’s link above for a clear explanation.
  • Sales taxes levied by states & cities, for the most part, can be considered a “wash.” That is to say, all elements equal, sales taxes are not going to make as much difference as Income & Property taxes. Again, the recommended site is Retirement Living: http://www.retirementliving.com/RLtaxes.html
The Ultimate C.O.L. Calculator  

This is the very best calculator, that I am aware of, which does consider tax implications. The product is called: Relocation Assessor, by The Economic Research Institute: Link Here

The U.S. Model compares 7,200 U.S. & Canadian cities. By entering the cities desired, information about salary, renting or owning, automobiles and home size is delivered. This regularly updated software probably gives the most accurate evaluation available.

Unfortunately, the cost of the product, $889 for a year's subscription, is expensive and for one license only. If your company or agency relocates employees often, then they may have a license for the product. If not, they should. The price may not be out of reach for you but, if not, go for it. You may indeed save yourself that amount within a year simply by understanding the REAL cost of living in a new location you are considering.

A somewhat limited version of the Relocation Assessor is also available and can be downloaded from this website if you want to give it a try.

SalariesReview.com Calculator

This website, SalariesReview.com is just as accurate as the Relocation Assessor above IF you are a renter, since that is the basis of information presented for housing by this tool. For $38.00 (two reports at $19) you can purchase custom online reports for the zip code of your choice.

If you rent, are serious about relocation, and know the zip code or city of interest, this is money well spent. Take a look at one of the sample reports provided on the site to see the information generated.

Summary

Making a decision to relocate for employment is done successfully by thousands of people just like you every day. Cost of living is only one factor to consider. Relocation for a better position can be rewarding and can result in very positive career & personal experiences.

Take the time to understand what is important to you and your family. Focus your attention only on those areas of the country in which you desire to live. Investigate them thoroughly, and then narrow your focus further. Prepare yourself for a decision if relocation is in your future. As George Will stated, "The future has a way of arriving unannounced."


 

 







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