As time draws near for me and my family to move to the US while my kids do their tertiary studies, I have discovered a few interesting facts.
One is that taxes are not as bad as I thought. Even with an income of US$200k in a high tax state like California, as someone over 50 with a non-working spouse, I can make nearly $45,000 in tax deductible contributions to retirement and health savings accounts — and what’s left over is not considered high income for a family. In this scenario, California is not so different in tax than most other states.
Another realization is that real estate prices in California are crazy high these days. Roughly speaking, even in the suburbs, you are looking at around US$800 per square foot (US$2m for a 2,500 Sq Ft home). Luckily,
property taxes are much lower in California, so that is not as big of an issue - but similar to Singapore, you’ve got a huge asset hurdle to clear. With interest rates where they are, borrowing 7 figures means 5 figure payments… and that is just nuts.