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San Francisco Chronicle
18-07-2025
- Business
- San Francisco Chronicle
How to financially prepare to spend the rest of your life in the Bay Area
You'd be forgiven if the phrase 'retirement planning' caused your eyes to glaze over. But ask yourself two simple questions: What could be more exciting than getting to live in the Bay Area while doing whatever you want, every day? And would you be as happy if you had to leave? With a solid plan in place, you can set yourself up to spend your golden years in the Golden State. James 'Jim' Cunningham is an estate planning, trust and probate law attorney who helps people make those plans. He's making one for himself, too: He plans to retire here. The founder of CunninghamLegal said he compares living in the Bay Area to living in a house with a great view. When you're in that situation, it's easy to stop 'seeing' the view at all. It fades into the background. Cunningham said that's what happened to his parents and many clients he's worked with over the years who planned to move states when they retired. They got used to living in the Bay and assumed everywhere was just about the same, but with a lower cost of living and fewer taxes. 'They miss the culture and they miss the weather,' he said. When you live here, 'you don't see the good and you might focus on the bad.' And there's plenty of talk about the bad. You don't have to look far on the internet to find people blasting California for its high taxes, housing costs and homelessness. California has the top marginal state individual income tax rate at 13.3%, according to the Tax Foundation. But that's not the whole story. Cunningham broke down the hidden benefits in a post on his firm's website titled 'Why Retiring in California May Actually Be A Smart Idea.' For instance, though marginal rates are high, you'll pay a lot less on your presumably diminished retirement income compared to some states with flat tax rates. California is one of the states that doesn't tax Social Security benefits, and doesn't tax capital gains when a spouse dies. And you'll dearly miss that Prop. 13 property tax cap if you move somewhere like Texas. San Francisco, in fact, was recently ranked as one of the top places for Americans to retire, according to the AARP. Yes, the cost of living is high, but there are plenty of upsides: Good health care, walkability, great weather, lots of places to go and things to do and see. 'I encourage people not to undervalue the importance of your social network, your friends,' said Terrance Odean, a professor of finance at the Haas School of Business at UC Berkeley. 'But you've got to look at the numbers too.' Already, Northern California is one of the nation's oldest regions. In 2023, San Francisco had the third highest median age (41) of any large metro in 2023, and the highest outside Florida. Almost one-fifth of people here are over 65. And the total number of people over that threshold is expected to explode from about 750,000 in 2020 to over 1.5 million in 2050, according to projections from the California Department Finance. The Chronicle has been looking at these numbers with a series of stories exploring the challenges already manifesting in the Bay Area because of its increasing older population. For instance, a once-vibrant Berkeley neighborhood is now essentially a single-family home retirement community. It's a potential harbinger of what's to come in other cities. One Sonoma County city has lost 35% of its children in a decade, even with qualities that make it feel like a 'family-friendly' destination. Despite the ways an aging population could complicate life in San Francisco, and the region, it remains a wonderful place to live and grow old in. And while economists and community organizers address what we must do to keep the Bay Area a vibrant place to live, you are likely to have much more personal and practical concerns. Starting with: how to financially and logistically plan to live here forever. Here's what experts say. See what you spend and then save, save, save In high cost-of-living places like the Bay Area, retirement isn't an age. It's a number — specifically, the balances in your investment and savings accounts. To estimate what you'll need for spending when you're retired, you need to know what you spend now. If you aren't already, start tracking your expenses and figure out precisely where your money goes every month. Then, envision what your retired life will look like. Are you going to travel? Buy a vacation home? Golf every weekend? Write out those costs and figure out how much of a nest egg you'll need to sustain your new lifestyle. Hal Hershfield, a professor of marketing, behavioral decision-making and psychology at UCLA Anderson School of Management and author of the book 'Your Future Self,' said a lot of people think their costs will come down in retirement without the need for a commute or work clothes. 'That may be true but there are other things you will be spending money on,' he said. Those travel plans will add up fast — as will health care costs. Things like gas and homeowners' insurance cost more here. Plan for the fun stuff, of course, but plan for the less-fun aspects as well. Then save, save, save. Another element is tax planning. Our state's tax code actually has some benefits for seniors. Though California's marginal tax rate is high, that only applies to income, Cunningham points out. 'People get wrapped around the axle on income tax, but the reality is many people in retirement, before they have required minimum distributions on IRAs, many times don't have a lot of taxable income,' he said. Again, California doesn't tax Social Security income, and while you pay taxes on interest on your savings account, you don't pay any to withdraw the principal. And your property taxes will remain stable thanks to Prop. 13. He said he has seen people move out of state for a few years to take advantage of lower income tax rates so they can do things like sell a business or convert a Roth account. But if you sell your house to facilitate that move and don't plan for the Prop. 19 tax base carryover, you'll miss out on your low property tax rate when you move back. The lesson: Work with a tax attorney to plan any complex financial moves like that. It's also worth thinking through the ethics of avoiding paying taxes to the state that provided the infrastructure and social safety net that facilitated your wealth-building. Take steps to protect yourself and your money There are going to be a lot of people you need to protect your money from. Scammers, certainly. Those offering predatory loans or perilous investment opportunities as well. But also: yourself. 'It's depressing, because we don't like to think about cognitive decline,' said Terrance Odean, a professor of finance at the Haas School of Business at UC Berkeley. One of the major financial risks of aging is longevity — outliving your funds. The other is diminished self-control as you lose decision-making capabilities. And that's something you might not even realize is happening. On his YouTube channel, Odean relays a story about his dad. The former high school teacher had been a careful saver his whole life, and purchased a long-term care policy when he retired. Twenty years later, he announced he'd canceled it. 'Dad was no longer thinking clearly,' Odean said. He cited a statistic: Scores on financial literacy tests decline about 1% per year as we age. But confidence in financial literacy doesn't drop. We lose our ability to make financial decisions but don't know we're losing it. If you've been fortunate enough to find success and build a life in the Bay Area, you're probably pretty smart — which can make it even harder to accept that your ability to keep making good decisions has declined. Here's what experts recommend you do: Delay drawing Social Security. One way to protect yourself from the longevity risk is by waiting as long as possible to take Social Security. That's your bottom line, Odean said: If the market collapses or a scammer gets their hands on your bank accounts, you can still count on Social Security coming in (assuming the problems reported by recipients following DOGE changes are temporary). He said the only time he'd make an exception is in the case of a terminal health diagnosis. Buy an annuity. Another recommendation Odean gives is to invest your nest egg in an annuity with no cash value. That last part is important: It means a scammer won't be able to wrest it from your clutches. Some annuities have riders where coverage increases if you need long-term care. Invest in long-term care insurance. Nearly 70% of adults who reach the age of 65 will require long-term care for an average of three years, according to A report from the Joint Center for Housing Studies said the annual median cost of assisted living and related living expenses in the San Francisco metro area is $96,800. 'Everybody's goal should be to private pay for their long-term care needs,' said Chris Orestis, the author and founder of retirement planning platform 'Retirement Genius.' Pick a financial confidant. Before you need any help making financial decisions, choose someone — maybe a child, a fiduciary or an attorney — and get into the habit of discussing major money moves with them. You may want to appoint them co-trustee of your trust or give them power of attorney if you can't make decisions any more. Diversify assets. As you approach retirement age, work with a financial adviser to diversify your holdings to a blend of stocks, bonds, and cash in a high-yield savings account. Consider options for your living situation. If you've owned your property for a long time and paid down your mortgage, you have a lot of options for your living situation as you age. You could tap your equity with a second mortgage or by getting a reverse mortgage, though you should research them thoroughly and discuss lenders with an attorney or financial adviser before getting one. You could also utilize Prop. 19 to sell your home and buy a new one that better fits your needs while carrying over your reduced tax base.
San Francisco Chronicle
06-07-2025
- Business
- San Francisco Chronicle
These are the best places to retire in California, according to a new ranking
Trying to figure out where you'll retire in California? Retirement Living, a platform for retirement planning services, recently published its second annual ranking of the Golden State's most senior-friendly cities. There are plenty of great reasons to retire here. We have year-round temperate climates in most places, especially along the coast. You're only ever a couple of hours' driving distance from world-class vacation destinations like Lake Tahoe, Napa Valley, Palm Springs and Santa Barbara, as well as plentiful national and state parks. Major cities have some of the best hospital systems on the planet and a wide variety of cultural activities like museums and performing arts spaces. And Prop. 13 means if you've owned your home for a long time, you're likely getting a nice discount on property taxes compared to more recent neighbors — one you can take with you if you relocate within the state under Prop. 19. When it comes to California, 'it's not just the warm weather, it's the variety, it's the culture, having access to anything,' said Jailyn Montero, a media relations specialist for Retirement Living. 'California is one of those states where you're not really lacking in any department.' There are many different ways to evaluate how good a city is for seniors. The AARP's Livability Index scores communities based on expansive criteria across seven categories, including housing, transportation and health. It named San Francisco the top very large community for seniors. Retirement Living's rankings have a more narrow focus: 'We looked at what we believe is most important to seniors,' Montero said. Her team put together the ranking based on the cost of living, the percentage of the population that are seniors, median rent and home sales prices, poverty level, and the local sales tax rate. The state's base sales tax rate is 7.25%. Data for the analysis came from Redfin (home sales data retrieved in April 2025), the U.S. Census Bureau's 2023 American Community Survey 1-Year Estimates, and tax software Avalara. Researchers looked only at cities with populations of 100,000 or higher, so if you're looking for a more rural retirement, this list probably won't apply. Five cities in the Bay Area made the top 20: Vacaville (No. 4), Richmond (5), Santa Rosa (7), Vallejo (10) and Concord (15). Those cities all offer more affordable housing options compared to a lot of the Bay Area, though sales tax rates also tend to be on the higher side. Here are the top cities that made the list. 1. Roseville Roseville has risen above its humble origins as a railroad junction to a city with nearly 160,000 residents. It was a standout in more than one recent ranking — Consumer Affairs named the Placer County city the best place to move to in California in 2025. According to Retirement Living, Roseville's population is 18.9% people over 65. In places with larger shares of seniors, retirees 'are going to be surrounded by like-minded individuals,' Montero said, and those communities 'know how to take care of seniors.' The analysis reported a median home sales price of $635,000 and median rent of $2,158 in Roseville — not low compared to national averages, but downright affordable for California. Those lower housing costs contribute to Roseville's comparatively low poverty rate of 5.6% — roughly half of what it is for the rest of the state (11.3%). The sales tax in Roseville is 7.75%. 2. Oceanside If hitting the beach is a key part of your retirement vision, you might consider Oceanside, a city of just over 170,000 people located along the coast in San Diego County. One-fifth of the population is seniors. The poverty rate is 8.3%. Homes and rent are going to be a bit more expensive — a median of $850,000 and $2,293, respectively, according to Retirement Living's data — and the sales tax is 8.25%. But it's tough to beat the views. 3. Torrance Retirement Living called Torrance 'the most retiree-friendly city in California' due to its share of 65 and over population: 21.6%, the highest of any city on the list. That friendliness comes with a cost: The median home in this coastal city in Los Angeles County will set you back $1.3 million, the second-highest of all 20 California cities on Retirement Living's list. Median rent is $2,049, the poverty rate is 7.3%, and the sales tax is 10.25%. Here are the other 17 cities on the list, with the Bay Area locations in bold. Vacaville Richmond Modesto Santa Rosa Thousand Oaks Simi Valley Vallejo Ventura Huntington Beach Inglewood Garden Grove Concord Visalia Elk Grove Clovis Glendale Sacramento
San Francisco Chronicle
24-04-2025
- Politics
- San Francisco Chronicle
Letters: Why adding ‘abstinence' to S.F. drug recovery policy can do more harm than good
Regarding 'S.F. drug crisis: Battle brews over adding one sentence to city's recovery policy' (Bay Area, April 19): San Francisco Supervisor Matt Dorsey says that recovery from addiction entails 'abstinence from illicit drugs.' While this definition is one way to view recovery, it is not the only one. Recovery from addiction is not as simple as Dorsey makes it seem. In fact, framing it in this way can be harmful to people whose journeys of recovery are more complex than total abstinence from illicit drugs. As a public health student, one of the most important takeaways of my education is a deeper understanding of the circumstances that lead people to unhealthy situations and lifestyles. Dorsey's definition puts the road to recovery in a box by failing to consider the individual circumstances that might affect a person experiencing a drug addiction. I oppose Dorsey's proposal to amend San Francisco's recovery policy. I urge the Board of Supervisors' Public Safety and Neighborhood Services Committee, which will hear this proposal on Thursday, to also oppose it. Alyanna Asuncion, Berkeley Reform could fund schools Regarding 'Beloved East Bay performing arts school to close, leaving students without a stage' (Arts & Entertainment, April 21): The impending closure of the Contra Costa School of Performing Arts is yet another tragic reminder that charter schools are not an effective solution to the issues found in traditional public schools. Schools must be places where students feel a sense of stability. This is essentially impossible at most charter schools because more than 25% of them close before the five-year mark. Contra Costa School of Performing Arts will close after just nine years. Instead of taking this neoliberal approach to education, we should invest in truly public schools that support students' passions. Many traditional public schools in California have vibrant theater and arts programs. The key is funding the school well, which is challenging given the financial strangulation placed on our public education by Proposition 13. If we reform Prop. 13 and make corporations pay their fair share in property taxes, we could restore billions annually to our public schools and communities. All students deserve the chance to attend supportive and well-resourced schools, and the best way to do that is by taxing corporations. Olivia McHaney, San Francisco Ban glue traps Regarding 'San Francisco could ban popular type of mousetrap' (San Francisco, April 21): San Francisco should follow in the footsteps of West Hollywood and Ojai (Ventura County) and ban cruel glue traps. These torturous devices entrap animals in powerful adhesives and tear them apart as they struggle to escape. Victims often suffer for days before succumbing to starvation, dehydration or blood loss. The traps are also indiscriminate and endanger birds, butterflies, lizards, squirrels and many other wildlife species, along with companion animals and small children. Glue traps have no place in a civilized society, particularly when far more humane methods are readily available. Hailey Hanson, San Francisco Running on empty You people who think everyone should get out of their cars and walk 50 or 60 miles to work everyday, who think there is no need for fuel to bring supplies to the Bay Area, who think it is fine if Sacramento politicians mandate fuels that no one else on Earth makes and forces it on the public no matter the cost. Well, your time has come. When this refinery shuts down, and no one else is stupid enough to bring it back to life, you will have to explain to the voters why gasoline in California costs $9 per gallon. Maybe then (but probably not) the people of California will wake up and get rid of the feckless politicians ruining what was once a great state. No wonder everyone who can leave is doing so. John Madden, Tiburon
