400k income, why not rent in NJ instead of Manhattan?

I think it depnds on how much time you spend in the city. NJ looks (even in Hoboken and JC) "just a PATH ride/ferry/car ride away"...but if you're out a lot or work long/late hours it really might start to wear on you. And no one will visit you. Ever. Also, NJ has massive tax issues, too and don't forget parking really can suck - I'm assuming you will need a car in NJ. Add on gas/insurance and so on.

But, you can get big spaces.

Yes - New Jersey charges income tax on 401(k) contributions, and NY does not. Very material especially if you're self-employed, because you can defer taxes on income up to 25% of $230,000 in 2008 - or $57,500 - and $15,500 in deferred salary.

So besides being a much nicer place to live than NJ, you'd have to pay NJ income tax on an additional $73,000 of income, that is tax-free in NYC.

Then move to Nevada to retire, and not pay income tax on your 401(k) withdrawals.

"And no one will visit you. Ever."

Sad, but very true.

For some income brackets, I believe the state income tax rates in NJ are 1-2% higher than in NY, and at 300-400k you may cross that threshold. Also, try getting a cab to take you to NJ on a Friday night - at least 1.5x the meter if you get them to do it.

Ofcouse, Manhattan commands a premium. Plus who wants to live in the armpit of America (aka New Jersey)? sorry.

Try taking a cab home at night to Jersey. Sadly for you, you'll discover that they don't have to and most of them won't (and if they do, it costs a lot).

I have some friends who live in Pavonia, and although it's not inconvenient in terms of commuting, trying to get there at nights/on weekends (even on the PATH) seems incredibly inconvenient.

P.S. Steve: you can't max out your salary deferral and "employer" contributions to your 401(k), there's a cumulative cap. I think the limit is $46,000 this year. I'm not sure what the rule for old people is, but I seem to recall it only allows a couple of thousand more per year, so I think the total tax-deferred contribution can't exceed ~$50,000.

JuiceMan--I think your taxable income has to be >$500,000 before the New Jersey rates eventually get higher than the NYS rates, and even then they're 2% lower than the combined NYS + NYC rates.

I have friends and have had clients in Hoboken and Jersey City. There have been too many occasions where I've waited in the cold around midnight for a half hour or 45 minutes for the PATH train at the Hoboken station, the hub of the system. If you have any off-hours travelling to do to/from Manhattan, NJ blows.

Steve,

Do NJ really tax your 401(k)? i found some articles about it, but nothing concrete about the tax being implemented. Assuming, 400k income, working for a NYC company, contributing 30k to 401(k), then I would have to give NJ approx 1,500 dollars each year??

I do realize that NJ is pretty crappy, but is it 16K dollars crappy?

try Westchester?

bugelrex - i think it depends on each person's utility function. If the inconvenience is worth less than 16k to you then it works. For many it doesn't and so they don't move. It's the whole traveling/commuting/inconvenience thing for many people. It seems close in best case scenarios, but weekends and off-hours are quite different I believe. For me it's not worth it - but YMMV. . . .all depends on you.

Yes NJ does tax your 401(k) contributions. I don't know what the tax rates in NJ are. It is, however, a major consideration, not only because you do have to pay taxes in NJ, but because you don't have to pay them in NY.

I think you only included one part of that, so your $16k isn't that much.

If you work a 9-5 job in the city and that's all you need/want from it, then it could make sense. If you want to live in New York, then you have to live in New York.

Focusing on taxes in this discussion seems strange. Other factors, like housing costs, are probably a way bigger component of the overall cost of life difference. It's certainly cheaper to live in New Jersey, but it's also cheaper to live in Ohio or Kentucky. If you don't care about where you live and just happen to have a job in Manhattan, New Jersey may be a reasonable option.

jordyn, the original post was about taxes, which is why people answered it that way.

If taxes are the issue there are many other cheaper places to live. I could live anywhere I want but live here b/c I like it. That would be my recommendation.

But it wasn't the question.

Yes, my comment was directed to the OP. There are a bunch of costs to be considered, some of which are rather more significant than taxes. Perhaps taxes just seem more annoying than the rest.

Well if you want to look at it a different way, that $16k amounts to $666.66 per person per month. That gets eaten up pretty quickly with a car, not needed here.

Or, it equals 2.5 martinis per person per day. That's how I'd measure it.

People are forgetting the other side of the equation... just how much more you get for the rental dollar in NJ than in NY. This of course goes a step past the "do you want to be in NJ?" question in the first place. But for $2500-$3000 you could probably find a 2BR/2-2.5 bath in Edgewater/Cliffside Park/Guttenberg with 1500 sq. ft. with parking included, a workout room and probably a pool and tennis court. If you want high end, that too is available, like renting one of the condos in The Carlysle (sp?) which has white glove service, including valet parking and they will unload your car for you when you go shopping and bring it up to your apartment.

Oh yes, I forgot that the car insurance costs are about half in NJ over NY (my wife was paying $900/year where in manhattan it would be in the $2000+ range).

Ahhhhhhhh..........

beautiful Edgewater/Cliffside Park/Guttenberg, N.J.

Ahhhhhhhh..........

Sometimes less is more.

I have a friend who recently got engaged and moved from ny to nj where her fiance lives. She describes her life before: "swipe" and "taxi" - meaning metrocard or cab. Now she has to check train schedules to get from her place to the path, no corner drug stores etc. Her life is very different and she is candid that she is not used to it nor does she like it. She has to schedule things and her convenient hairdresser etc. is in NY which is a feat during the weekend etc. Life becomes different so you have to adjust for that. NY is a very convenient city. Some people are ok with that in the search for space, others are not.

Don't get me wrong, we live in my apartment, a 1BR on the UWS rather than the 3BR she had at the same price in Edgewater. But she does miss her old kitchen and we both would have ended up keep ing a lot more stuff that had to go to make space for two.

Weasel-boy (who makes 60% ROR says) -

"...Sometimes less is more..."

Please apply that very thought to your number of threads and posts, their sometimes prodigious length, and your elephantine financial claims, and we'll all be better off....

bugelrex , if you have kids and both work in NYC, you should never be a bridge or tunnel away from them.. if you dont then it depends on your life style and what you enjoy.

girlygirl, is your friend reconsidering the marriage? Any potential spouse that requires a move from Manhattan to Jersey before having kids is a moron. He’s probably the same meathead that gets hammered in the East Village on Saturday nights and screams obscenities at 3am in front of tenemental’s place. She should hit the reset button and move back to Manhattan, fast.

Well they do have more space and she openly complains in front of him - so I dont think it is all one-sided. He carries her purse etc. lol. I think she compromised on it.

JuiceMan, that's the guy. He was in a meathead vs. meathead standoff last weekend (I think the other guy was from Long Island). She seemed really embarrased. Shame, she was very cute. He kept it up until my neighbor dumped a pot of dirty dishwater on his head from the 6th floor.

commuting on weekdays is quite easy to nj (be it edgewater, west new york or jersey city). i live in west new york currently (I was priced out last year - could not bite 1 brs going for $4500) - 2 bedrooms (1200 sq ft, washer dryer in unit, etc) are going for 2300. cannot beat the prices.

there are a lot of hidden costs though:
1. utilities are higher (200 for a 1BR). I was paying < 100 in manhattan
2. car insurance (surprisingly) jumps in NJ - all the bad jersey drivers
3. buses are cheap (80 usd monthly pass) and plenty on the weekdays. Ferry is terribly expensive (I think $9 each way)
4. quality of life takes a hit (I am thinking of moving back to manhattan).

I am thinking of moving back to the city - especially now that rents are becoming reasonable and availability plenty

Pay the $16K and avoid the commuting hoi polloi --

I lived in NYC when I was single, moved to NJ to have kids, lived around the world, now I'm an empty nester heading back to where I began. NJ has its good points, but it will require a new headset and a lifestyle adjustment. NYC?...Priceless!!

Yup. With 400K total income, you should be happy here if the delta was twice as high. If you have kids, it's a no-brainer...they'll thank you later for growing up in Manhattan ;-)

if you're really worried about it, I'd pick Riverdale, Forest Hills Gardens, Windsor Terrace, Kensington, Ditmas Park, etc., any day over Jersey. The housing stock is just as good, the property taxes are far, far lower, you can get an affordable house not apartment, you're close to a railway / subway / express bus, the schools are good, and you don't have the Garden State stigma.

But it'll be tougher for your kids to get into Rutgers.

tenemental, lol. Back in college I was running around Boston's Back Bay at 2am and stopped to relieve myself in an alley. I looked up just in time to see a bucket of nasty goo coming straight down on me. I avoided the mess, but I never tried to pee in an ally again.

Good insight, JuiceMan, thanks for the details.

JuiceMan, solid work. I don't look up very often while relieving myself, but if I ever try the alley thing again, I will keep that in mind. Btw- where did you go to school?

seriously, if you're running the numbers on living in manhattan vs jersey, you might as well move to jersey

If you are trying to save money for a few years (ie. Down payment, pay down debt etc) moving to avoid the City tax does make sense. Of course, long term.. NYC all the way!

bugelrex - well you already made your decision. The fact is people are not just thinking of monetary terms in making their decision. . ..while you are. So it may very well work for you (as has been noted a few times).

btw, New Brunswick is even cheaper than Newport Pavononia and "only a train ride away".

These are all such dated and biased comments. NYC ego centrism is so laughable. People in NYC shit all over jersey because they’re jealous. Jersey is the perfect balance of all worlds (that’s why it’s almost just as expensive, and at the time of this writing, post-covid, MORE expensive to live in than NYC). People in the city can’t imagine a hop skip and a jump over the bridge or tunnel into jersey because they don’t know the freedom of owning a car. Living in the city was such a dirty, congested, prison-like experience. Using the dirty ass smelly train to get everywhere — gross. People in NJ, we know NYC is where to go for a job, school, party on the weekends, that we can come and go from with ease whenever we please. Like I love the theme park, but I wouldn’t want to LIVE in the theme park. NJ is the best of all worlds: proximity to NYC in the north, Philly in the South and a long and gorgeous shore that’s actually much nicer than the much overrated Long Island. Again, the garden state stigma is better explained by jealousy than anything else. We don’t see NYer’s shitting all over Mississippi or West Virginia, bc there’s no threat whatsoever from those states to its eminence. Living in NYC is a scam, unless maybe you’re a multi multi millionaire and can afford a massive luxury suite on the top floor with a parking garage for your Lamborghini. Although I’d argue a mansion with acres of property and space, with trees everywhere is a better place to park your lambo. NJ has excellent schools, restaurants, novelties and shopping and is a much healthier place to raise a family. Like get over yourself elitist Manhattanites — your attitudes are embarrassing. NYC is a gold-plated turd for the most part and everyone else knows it.

What's the process for reporting a troll?

I think you need to chill. Both locations have their advantages.

MC_89, you are one unhappy guy. I love Manhattan, have lived here all my life, and will continue to do so. If people are happy in NJ, great. Has nothing to do with me!

mc_89 - if what you are saying is correct, why are you talking on a nyc board

the fact that you bothered to post this here violates the entire premise of your post

MC_89
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I guess I love living in a theme park lol

Dated comments because mc_89 is necro-posting on a threat from 13 years ago!