The Cost of Living Diaries: Moving From the Bay Area to Madison, WI
"When we came to visit Madison, we looked at real estate prices just for fun and were blown away by what we discovered."
Have you thought of leaving the Bay Area because it’s too expensive? Interested in retiring someplace more affordable? Read on for the story of a couple who did just that — and loves it.
Name: Ada and Bob L.
Age: 68 and 70, respectively
Job in the Bay Area: Both of us worked for various computer hardware and software firms for over 30 years each.
Job in Madison: Retired!
Mortgage in Bay Area: $2,400 a month
Mortgage in Madison: $1,200 a month
What precipitated your move?
We had both retired and the cost of continuing to live in our home and the Bay Area was going to eat up our retirement savings. In addition, I had developed mobility issues (I need to use a walker and/or cane) and I couldn’t navigate the steps easily in our five-level house. I desperately needed a single-floor layout.
We couldn’t afford to buy a house anywhere in the immediate Bay Area. We would have had to move 40-50 miles to find anything remotely affordable.
Our daughter had come to UW-Madison for her graduate work and when we came to visit her, we looked at real estate prices (just for “fun”) and were blown away by what we discovered. I’m originally from Buffalo, NY, and loved Madison because it reminded me of Buffalo in many ways. Bob is originally from NYC and he really enjoyed the more peaceful aspects of Madison.
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Madison had everything we wanted! There’s lots of open space, culture (museums, concert hall, etc.), restaurants and easy driving. The cost of living in every respect was so much lower than the Bay Area and the people we met were wonderful.
Also, we missed the four seasons. Being retired, we knew that winter would not be difficult since we didn’t have to go to work every day, so it didn’t concern us.
We also discovered numerous organizations that we could join to meet people with the same interests. Groups like these did not exist (or were not easily accessible) in the Bay Area.
Best of all, we would be near our daughter while she finished her grad school stint. After that, we’d have a really wonderful place, with many friends, to spend our “golden years,” even if she leaves to go elsewhere.
As you were getting ready to move, how did you prepare for the difference in cost of living?
Preparing for a lower cost of living is sort of a no-brainer! However, it was a really good opportunity and motivator to downsize. Doing so was actually really invigorating
Other than downsizing, we had no real adjustments. It’s really nice to know you can have a higher quality of life for less money!
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What was it like looking for housing in Madison?
When we saw the low housing prices, we took one more step and looked at the cost of new houses.
Madison and surrounding areas had begun a bit of a housing boom and many new housing developments were going up. We identified a Wisconsin-based builder with an outstanding reputation (and many national-level awards) and worked with them to have a small ranch-style house custom-built for us in a suburb of Madison.
Our agent at the builder worked with us remotely via email and phone to ensure that we were able to get exactly what we wanted in our home. We made one trip to Madison to finalize the deal and make final choices. Bob made one more trip for a required inspection before building was completed.
If the same house was built in California, the price would have been four times what it cost in Madison. The quality of the building in California would not have been as good as what we now have in Wisconsin, either.
Because of the climate here, houses are built better and our builder specialized in houses with extremely high energy ratings. As retirees, it just made good sense to have a new house with almost no upfront maintenance issues, but with the features that make our lives much easier.
Obviously, cost of living isn’t just about housing prices. What other costs changed for you?
Homeowners’ association fees: California $240/month; Madison $200/year.
Home and auto insurance: we are paying one-third of what we paid in California.
Health insurance: Specifically, Medicare supplemental insurance. There are two insurance companies here offering Medicare supplemental insurance to Wisconsin residents only. Both are less expensive than what we were paying in California and much more comprehensive in every respect. Our out-of-pocket expenses are at least 40-50% less here.
Health care: We are amazed at the quality of healthcare here in Madison. Three major healthcare organizations are available, and all provide far superior care for both of us than we ever received in California at a fraction of the cost! Coupled with the excellent Medicare supplemental coverage we have, it’s a major benefit to being here.
Sales tax: almost 10% in California at the time we left; only about 5-6% in Madison.
Cable, phone, wireless services: our fees for TV, phone, and cable (internet) services total in Madison = what we paid just for cable TV in California.
Gasoline: gas in Wisconsin is $1.50-$2.00 cheaper per gallon and everything is closer together here, so it’s a win-win.
Concert and live theater tickets: the most expensive tickets for concerts and live theater here in Madison are the same as the cheapest seats for concerts or live theater in most of the Bay Area. And we enjoy the performances more here because every aspect of the experience (parking, access, quality of the performances, etc.) are just as good.
Groceries! Everything is 30-50% cheaper in Madison. One funny story: just before we moved, I was online and looking at the ads for the supermarkets in the Madison area – no particular reason, just for fun – and I saw organic pears from California being advertised. These pears were grown near where we lived in California, but they were cheaper in Madison than what I was paying in California that very week!
Farmers’ markets: We had one farmers’ market near us in CA and I thought the prices were good there. Then I went to one of the many farmers’ markets here in Madison and found most of the prices to be 30-50% lower (as with the supermarkets).
Also, there are more farmers’ markets here (even year-round) and CSA (community-supported agriculture) farms than I had access to in the Bay Area.
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Travel expenses: we aren’t near a major airport, so flights are more expensive because we have to get to a hub (usually, Chicago or Denver) to get to where we want to go.
This is more expensive in terms of both time and money, but it is changing. We are seeing some improved options for flying to/from Madison. Also, this is not a major deal for us because we’re really not travelling that much anymore.
About the same:
Eating out: Like any place, Madison has a full range of restaurants. We find that we pay about the same, or a little less, for the restaurants we go to frequently. However, the high-end restaurants in Madison are much less expensive than high-end restaurants in NYC or the Bay Area and the quality is just as good.
"If the same house was built in California, the price would have been four times what it cost in Madison."
Has this change in cost of living affected other life choices?
Life is so much easier now. The sale of our house in California allowed us to pay off our debts and basically start fresh. It gave us the freedom to build our dream “retirement home.” We have the financial resources to enjoy our hobbies and interests more extensively.
Building a custom house gave us the chance to create a house that I will be able to comfortably live in as my mobility decreases with age. And we have friends, lots of friends — wonderful, warm, welcoming folks that enrich our lives every day.
What do you love about your new city?
Our new friends, the more peaceful pace of life, the surrounding area with the lush landscapes and beautiful lakes and parks. We love the ability to go to concerts or museums.
What do you miss about the Bay Area?
The wide variety of fresh fruit year-round in the supermarkets. Our supermarkets in Madison certainly have a lot of fresh fruit all year, but it’s not quite the extensive variety we had in California. However, it’s a small “sacrifice.”
Easy access to not one, but two, IKEA stores. We love IKEA!
What has surprised you most about this move?
How easy it’s been, and how much better everything turned out than what we expected. We knew it’d be good, but it’s even better than we imagined.
What advice would you give to someone who’s interested in moving to a smaller town?
My general advice is for anyone moving anywhere: Think about the things in your life that are most meaningful and important for you in the city/area you’re currently living in. See if those things are available to you in the area you are looking to move to.
Think about things you wish you had or could do in your current area and see if the new area will make these things possible.
Be absolutely (if necessary, brutally) honest with yourself about how much it is costing you to live where you are. Note how much you spend every day just to live where you are and write everything down for reference.
Then compare those costs at the location you are considering. Also, think about the savings or investments you have and whether you can easily continue to grow them.
If you’re retired, acknowledge the fact that, as you age, your needs may increase dramatically. Consider if the new area will be able to provide the kind of support you might need. If you have family, will it be easy for them to travel to you if need be?
For some, it may be important to look at the political atmosphere of the area you’re considering. If you are very liberal in your political leanings, you may be extremely unhappy if you’re moving to a very conservative area or, of course, vice-versa.