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I had a bit of a revelation today. For months I’ve been running numbers and scenarios as a result of our New York City to Seattle moving plans. I’ve calculated how much less we will pay in rent each month after moving. And on an abstract level knew that we’d save money by not paying state or city income taxes since Washington doesn’t have state income tax while NYC has one of the highest in the country. But today I looked at this information in a different light.
Originally I knew that in 2014 I spent approximately $28,000 and that I would be paying at least $600 less a month in rent once moving to Seattle. However I did not consciously take into account that Washington state and Seattle the city do not have income tax, which ate $4,391.45 of my paycheck last year. That plus the $6,450 a year less I will pay in rent frees up $10,841.45 as a result of moving — not even including the lowered cost of food and transportation. That is shocking.
I had originally thought it would be a challenge to lower my spending from $28,000 to $20,000 (my early retirement number), but just by lowering rent and assuming I continue all the other saving goals I’ve cultivated since October I’m already down from $28,000 to $21,550. Including the lifestyle changes I’ve started to implement I can easily spend much less than $21,550 and even less than the $20,000 I estimated. I’m guessing $17,000 annual spending. This reduces my time to retirement significantly: from approximately 10 to 7 years after these changes are in full swing! I’ll have to see once we move and the moving expenses are added up if these numbers actually reflect real life, but it’s so exciting to see concrete (at least on paper) reasons for why this move is the right thing to do. I knew in generalities, but seeing the actual figures makes me happy beyond belief.
I had a bit of a revelation today. For months I’ve been running numbers and scenarios as a result of our New York City to Seattle moving plans. I’ve calculated how much less we will pay in rent each month after moving. And on an abstract level knew that we’d save money by not paying state or city income taxes since Washington doesn’t have state income tax while NYC has one of the highest in the country. But today I looked at this information in a different light.