For twenty-two years, my view was the same: a sliver of the Pacific Ocean visible between my neighbor’s roof and a very expensive eucalyptus tree in San Clemente. I loved that house. It was where we raised our kids and where we watched the California real estate market transform from "healthy" to "astronomical."
But as retirement approached, my wife, Sarah, and I started doing the math. We were sitting on a significant amount of home equity, but our cost of living was creeping up. Between state income taxes, high utility bills, and the general "California premium" on everything from gas to groceries, we felt like we were running a race just to stay in place.
That’s when we started looking at the Texas Hill Country. We’d heard the stories of the "California Exodus," but we didn't want to move just for a tax break. We wanted a lifestyle change: more space, slower days, and a community that felt like the small towns we remembered from our youth.
After months of spreadsheets and three scouting trips to Boerne, Fredericksburg, and Wimberley, we pulled the trigger. We sold our 2,400-square-foot California suburban home and bought a 15-acre ranch just outside of Boerne.
Now that the dust has settled, I want to share the "real math." Because while the headlines make it sound like a financial slam dunk, the reality is a bit more nuanced.
The Real Estate Swap: More House, Less Money?
In San Clemente, our home was valued at roughly $1.8 million. It was a lovely home, but it sat on a quarter-acre lot. When we sold, we were able to purchase a custom limestone ranch home on 15 acres in the Hill Country for $1.1 million.
On paper, we "pocketed" $700,000. For a retiree, that kind of liquidity is life-changing. We moved that capital into a diversified portfolio focused on liquid, publicly traded markets, shifting our wealth from a static asset (our home) into something that could actually generate retirement income.
However, you have to be careful with the luxury acreage audit. Buying 15 acres sounds like a dream, but 15 acres of Hill Country land requires maintenance that a quarter-acre lot in Orange County does not. We had to invest in a tractor, a shredder, and a much more robust homeowners insurance policy.
The Tax Reality: Income vs. Property
This is where the math gets interesting. California has some of the highest state income taxes in the country, topping out at over 13%. Texas, as everyone knows, has 0%.
As a retiree drawing from a 401(k) and an IRA, that 0% state income tax is a massive raise. In California, we would have been losing a significant chunk of our distributions to Sacramento every year. Moving to Texas essentially gave our retirement savings a 7% to 9% "bonus" in purchasing power. This is exactly why your CPA likely supports a move to the Hill Country.
But there is a "catch" that many Californians overlook: property taxes.
In California, we were protected by Prop 13. Because we’d owned our home for over 20 years, our property tax bill was relatively low compared to the home's market value: about $8,500 a year. In Texas, property tax rates are significantly higher, often between 1.6% and 2.0% of the assessed value.
On our $1.1 million ranch, our initial property tax bill was nearly $20,000.
So, while we saved roughly $12,000 a year in state income taxes, we "lost" about $11,500 of that back into property taxes. For us, it was almost a wash on those two line items. The real financial victory wasn't in the annual tax bill: it was in the $700,000 of equity we unlocked and put to work in the markets.
The Cost of the "Hill Country Lifestyle"
Beyond the big numbers, there are the day-to-day adjustments.
- Utilities: Our electricity rates in Texas are much lower than in California (roughly $0.14 per kWh vs. $0.32 per kWh). However, the Texas summer is no joke. Our air conditioner runs almost 24/7 from June through September. Even with lower rates, our summer utility bills are higher than they were in the temperate coastal climate of San Clemente.
- Insurance: This was a surprise. Homeowners insurance in the Hill Country is considerably more expensive than in coastal California. The reason? Hail and wind. The Hill Country is beautiful, but the occasional spring storm can bring golf-ball-sized hail that wreaks havoc on roofs. Our premiums are about 2.5 times what we paid in California.
- Maintenance: Living on "acreage" is a full-time hobby. We've had to learn about well water, septic systems, and cedar clearing. It’s a rewarding lifestyle, but it isn't "free."
Putting the Capital to Work
The most important part of our "real math" wasn't the cost of gas or the price of milk. It was the strategic shift in our investment management.
When we lived in California, so much of our net worth was tied up in the "dead equity" of our primary residence. By moving to the Hill Country, we were able to "right-size" our lifestyle while maintaining a luxury standard of living.
We worked with a fiduciary advisor to ensure that the $700,000 we unlocked was invested wisely. Rather than chasing complex, illiquid "alternative" investments with high fees, we focused on a transparent, cost-efficient portfolio of publicly traded stocks and bonds. This asset allocation was designed specifically to support our new lifestyle, providing a steady stream of income that covers our (admittedly higher) property taxes while allowing the core of our wealth to grow.
As Mau Sanchez often notes, retirement planning isn't just about where you live; it's about how your assets are structured to support that life.
Is the Move Worth It?
If you look strictly at the annual "operating costs," moving from California to Texas might not save you as much as the brochures claim, especially if you have a low property tax base in California.
However, if you look at the total picture: the massive unlock of home equity, the 0% state income tax on your IRA withdrawals, and the significant increase in your quality of life: the math starts to look very different.
We traded a cramped suburban lot for 15 acres of freedom. We traded traffic on the 5 Freeway for sunset views over the Guadalupe River. We traded a complex state tax system for a simpler, more retirement-friendly environment.
For us, the "real math" adds up perfectly.
Schedule a private meeting with a fiduciary financial advisor today by calling (512) 593-8380 or by visiting: https://calendly.com/portafoliocapital/15min
Portafolio Capital Management dba Mau Sanchez Capital is a Registered Investment Adviser. This content is for informational purposes only and does not constitute investment advice or a solicitation to buy or sell any security. Advisory services are provided only pursuant to a written advisory agreement.
This article may include stories, scenarios, and perspectives created or assisted by artificial intelligence. Although the individuals and circumstances described may be fictional, the topics are intended to reflect real financial, personal, and lifestyle issues that retirees and individuals commonly face. The content is provided to encourage readers to consider different perspectives that may affect their retirement, regardless of whether they are currently planning, approaching retirement, or already retired. It is intended for general educational and informational purposes only and should not be interpreted as personalized investment, financial, tax, legal, medical, or retirement-planning advice. Individual circumstances vary. Readers should independently verify any information presented and consult appropriately qualified professionals before making financial or personal decisions. No advisory, professional, or client relationship is created through the use of this website.
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