Is California one of the worst places to retire? What's missing in a new ranking
That depends on whom you ask. A lot of people have chosen to retire here and are happy with their decision. California, particularly the Bay Area, is undergoing a tectonic reordering of the demographic landscape as the population ages. By 2040, more than 1 in 5 Californians will be 65 or older. Already, there are about as many senior citizens in San Francisco as there are children. Clearly, many people think California is a good place to live out your golden years, especially if you've made the right financial moves.
But not everyone agrees. Retirement planning services platform Retirement Living recently published its annual ranking of the best and worst states to retire in the U.S. Wyoming, West Virginia and Florida took the top three spots.
California's place on the list: No. 46. The fifth-worst state to retire, in other words.
There are many, many factors you could take into consideration in putting together a list like this. No one study could capture everything that's good and bad about living and retiring in California. But here's a look at why California landed so low on this list — and what it misses about the state's advantages.
How the study ranked states
Jailyn Montero, a media relations specialist for Retirement Living, explained the methodology: Researchers categorized data points in three areas, affordability, economic strength and quality of life. To measure affordability, the study looked at the amount of savings needed to retire and the state's income and property tax rates. Economic strength looked at the senior poverty rate and the percent of seniors still working past age 65. Quality of life was heavily weighted in how states were ranked, accounting for 60% of a state's overall score, and took into account things like wellbeing index, weather, property and violent crime, and health care facilities per capita.
California ranked 47th in affordability, 40th in economic strength, and 21st in quality of life.
The factors that brought down California's ranking the most had to do with the cost of living, Montero said, including state taxes, the percent of seniors living in poverty (12%) and the percent of seniors working past what's traditionally considered retirement age.
California actually moved up in Retirement Living's rankings from the 2024 results. This year, researchers removed opinion-driven survey data from their results. People's perceptions about what it's like to live in other states — especially a place that looms as large in the popular and political imagination as California — do not always reflect reality. And it's highly unlikely most seniors surveyed would have lived in enough states to make an informed assessment.
When that opinion data was factored in for the 2024 list, California ranked dead last.
What the study misses about California
Taxes are a critical part of what makes a retirement destination affordable, and the Retirement Living study oversimplifies and likely overestimates how much people — particularly older adults — get taxed here.
The study simply compares the top marginal tax rate for each state. Some states, including Wyoming, Texas and Florida, don't tax income at all. Fourteen states, including Arizona, Idaho, North Carolina and Georgia, use a flat tax rate, ranging from 2.5% to 5.8%. But in California, we have a graduated income tax, so the more money you make, the higher tax rate you pay, with the top rate at 12.3%. Taxpayers earning more than $1 million get another 1% tacked on. The study uses that top rate of 13.3%, but realistically, most seniors probably land in the 6% to 9% state income tax rate, Montero said.
California is also one of the states that doesn't tax Social Security, and whether or not those benefits are taxed wasn't factored into the state rankings, Montero said. If you rely exclusively on Social Security benefits in retirement, which millions of seniors do, you'd pay no state income taxes in California.
Plus, as every California homeowner knows, your property taxes are strongly impacted by Proposition 13, the 1978 law that limits how much they can increase each year. If you've owned your home long enough to have paid off the mortgage, you are probably paying a fraction of the property taxes that your new next-door neighbor is paying. Montero said Prop 13's property tax limitations were also not factored into their assessment.
So, if you're moving to California for the first time and planning to buy property, and you're still earning more than a million dollars a year in income, then you could get hit with a mighty tax bill. But if you're already living here and have owned your home for some time, you may be getting a better deal than you would be if you pulled up stakes to move to somewhere like Wyoming, West Virginia or Florida.
Again, no study can take every possible facet of retirement into account. But another key one that's missing: Montero said her team included a category for golf courses per 1,000 senior residents. But pickleball court availability? Nowhere to be found.
Here's the overall ranking of all 50 states:
Wyoming
West Virginia
Florida
Montana
Delaware
Maine
Pennsylvania
Mississippi
Idaho
Kentucky
Missouri
North Dakota
Michigan
South Dakota
Indiana
Iowa
Arkansas
Alabama
Ohio
Wisconsin
Georgia
Alaska
South Carolina
Minnesota
Tennessee
Oregon
Louisiana
Kansas
Nebraska
New Hampshire
North Carolina
Nevada
Utah
New Mexico
Washington
Colorado
Oklahoma
Illinois
Arizona
Rhode Island
Virginia
Vermont
Texas
Connecticut
Maryland
California
New Jersey
Massachusetts
New York
Hawaii
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San Francisco Chronicle
a day ago
- San Francisco Chronicle
Is California one of the worst places to retire? What's missing in a new ranking
Is California a good place to retire? That depends on whom you ask. A lot of people have chosen to retire here and are happy with their decision. California, particularly the Bay Area, is undergoing a tectonic reordering of the demographic landscape as the population ages. By 2040, more than 1 in 5 Californians will be 65 or older. Already, there are about as many senior citizens in San Francisco as there are children. Clearly, many people think California is a good place to live out your golden years, especially if you've made the right financial moves. But not everyone agrees. Retirement planning services platform Retirement Living recently published its annual ranking of the best and worst states to retire in the U.S. Wyoming, West Virginia and Florida took the top three spots. California's place on the list: No. 46. The fifth-worst state to retire, in other words. There are many, many factors you could take into consideration in putting together a list like this. No one study could capture everything that's good and bad about living and retiring in California. But here's a look at why California landed so low on this list — and what it misses about the state's advantages. How the study ranked states Jailyn Montero, a media relations specialist for Retirement Living, explained the methodology: Researchers categorized data points in three areas, affordability, economic strength and quality of life. To measure affordability, the study looked at the amount of savings needed to retire and the state's income and property tax rates. Economic strength looked at the senior poverty rate and the percent of seniors still working past age 65. Quality of life was heavily weighted in how states were ranked, accounting for 60% of a state's overall score, and took into account things like wellbeing index, weather, property and violent crime, and health care facilities per capita. California ranked 47th in affordability, 40th in economic strength, and 21st in quality of life. The factors that brought down California's ranking the most had to do with the cost of living, Montero said, including state taxes, the percent of seniors living in poverty (12%) and the percent of seniors working past what's traditionally considered retirement age. California actually moved up in Retirement Living's rankings from the 2024 results. This year, researchers removed opinion-driven survey data from their results. People's perceptions about what it's like to live in other states — especially a place that looms as large in the popular and political imagination as California — do not always reflect reality. And it's highly unlikely most seniors surveyed would have lived in enough states to make an informed assessment. When that opinion data was factored in for the 2024 list, California ranked dead last. What the study misses about California Taxes are a critical part of what makes a retirement destination affordable, and the Retirement Living study oversimplifies and likely overestimates how much people — particularly older adults — get taxed here. The study simply compares the top marginal tax rate for each state. Some states, including Wyoming, Texas and Florida, don't tax income at all. Fourteen states, including Arizona, Idaho, North Carolina and Georgia, use a flat tax rate, ranging from 2.5% to 5.8%. But in California, we have a graduated income tax, so the more money you make, the higher tax rate you pay, with the top rate at 12.3%. Taxpayers earning more than $1 million get another 1% tacked on. The study uses that top rate of 13.3%, but realistically, most seniors probably land in the 6% to 9% state income tax rate, Montero said. California is also one of the states that doesn't tax Social Security, and whether or not those benefits are taxed wasn't factored into the state rankings, Montero said. If you rely exclusively on Social Security benefits in retirement, which millions of seniors do, you'd pay no state income taxes in California. Plus, as every California homeowner knows, your property taxes are strongly impacted by Proposition 13, the 1978 law that limits how much they can increase each year. If you've owned your home long enough to have paid off the mortgage, you are probably paying a fraction of the property taxes that your new next-door neighbor is paying. Montero said Prop 13's property tax limitations were also not factored into their assessment. So, if you're moving to California for the first time and planning to buy property, and you're still earning more than a million dollars a year in income, then you could get hit with a mighty tax bill. But if you're already living here and have owned your home for some time, you may be getting a better deal than you would be if you pulled up stakes to move to somewhere like Wyoming, West Virginia or Florida. Again, no study can take every possible facet of retirement into account. But another key one that's missing: Montero said her team included a category for golf courses per 1,000 senior residents. But pickleball court availability? Nowhere to be found. Here's the overall ranking of all 50 states: Wyoming West Virginia Florida Montana Delaware Maine Pennsylvania Mississippi Idaho Kentucky Missouri North Dakota Michigan South Dakota Indiana Iowa Arkansas Alabama Ohio Wisconsin Georgia Alaska South Carolina Minnesota Tennessee Oregon Louisiana Kansas Nebraska New Hampshire North Carolina Nevada Utah New Mexico Washington Colorado Oklahoma Illinois Arizona Rhode Island Virginia Vermont Texas Connecticut Maryland California New Jersey Massachusetts New York Hawaii
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You have the governor and you have the treasurer, and the governor has a certain set of funding and then the treasurer has, underneath the treasurer's office, two other really important pieces of funding: low-income housing tax credits and what's called tax-exempt bond debt," Karlinsky told Newsweek. "Those are real significant funding sources for affordable housing production, which are governed by committees composed of different people within the government," she said. Under the changes introduced by the creation of an ad hoc agency, there would be one single committee governing all of the different funding sources. Before Berkeley, Karlinsky used to be a developer of affordable housing herself. The process of applying for funding, she said, meant applying for six to seven different sources, wasting considerable time and money in the process. This should no longer happen under the new agency. 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