California Retirement 101: More Diverse Than You Think

Category: Best Retirement Towns and States

June 26, 2012 – This is the latest in our Retirement 101 series, which joins earlier reports about retirement in the Southwest, Florida, and the Carolinas (see bottom of article for links). At the end of this article we will provide lists of the 10 most popular California retirement towns and the 10 most popular California Active Adult Communities.

If California is anything it is big and diverse. It has fans and legions of detractors. In our experience California has not had that much success in attracting retirees as new residents. Those who retire here from elsewhere either have family in the state, or they move to a town or area they know about. For those who have spent their working lives in the Golden State, most will continue to live in the state, but perhaps will move to a smaller home or a less expensive or congested area. There are many who say they want to leave as soon as they retire, hoping to escape California’s high taxes, cost of living, and crazy traffic. But for people who have the resources or the creativity to find a way to live in California, its beauty and climate are very hard to beat.

A Few Facts
California is a huge state by any measure. It is the most populous state with over 37 million people (12% of the U.S.). There are over 4 million people over 65 in the state (11.4% of the population, vs. 13% of the general U.S. population over 65). The state has 8 of the 50 largest cities in the U.S. It is the 3rd biggest state by area (after Alaska and Texas). Population and income data in this article is from American Fact Finder-U.S. Census Bureau.

Napa wine country

Economics and Home Prices.
California’s median home sold in 2012 for $295,300, which is double the U.S. median of $148,000. Home prices vary dramatically by region. Generally the big cities along the coast (Los Angeles, Santa Barbara, San Francisco) are the most expensive according to Zillow, whereas distant suburbs and communities in the interior are least costly. For example, in Bakersfield the mean home price is $117,000 vs. well over $400,000 in the San Francisco Metro. The California Association of Realtors just reported that home sales in May were 21% above the year earlier period with prices up over 6%. Unsold inventory of homes has decreased to a very low 3.5 months supply.The median household income in California is $60,883, about $10,000 higher than the U.S. median.

Climate
Being a large state with a long north/south coastline as well as a considerable east/west dimension, California has an extremely diverse climate. Death Valley in the southern part of the state is one of the hottest places on earth. At Lake Tahoe and in the mountain of the Sierra Nevada it is not unusual to have snowstorms dump more than a foot of snow. San Francisco and the coastal north is often cool and rainy, whereas San Diego has such consistent and sunny weather that the joke is that the weatherman is never wrong there. The interior valleys up through Sacramento tend to be cool in winter and hot and dry in summer. The highest mountain in the contiguous states is California’s Mount Whitney at 14,505′ – whereas just 90 miles away in Death Valley it is 282′ below sea level.

Tax Environment
California has a very progressive income tax. Couples with incomes below $33,780 pay 2% income tax (the rate is 4% between that and $53,314). Social security income is not taxed, although pensions are. The data below is from the Tax Foundation and Tax-Rates.org. For more details about taxation and other information about each state see our California Retirement Guide.

Tax Burden Ranking – 6th highest

Highest Inc. Tax Rate – 10.3% (for a couple who makes $2 million)

State Sales Tax – 7.25%

Med Prop Tax Rate – .074% of property value

Localities may add additional sales taxes

Social Security Taxed – No

Taxation of Pensions – Yes

Places to Live in California
Southern California
The warmest climate and some of the highest home prices are found in southern California, from San Diego just above the Mexico border to beautiful Santa Barbara north of LA. Retirees are attracted to these areas for the beaches, the weather, and the lifestyle. Going east from LA the far suburbs are cheaper but not as appealing until you get to the desert. For people with plenty of income La Jolla, Oceanside, and Santa Monica the lifestyle will be hard to beat. Home prices in Riverside, which is a bit inland, are half what they are in Los Angeles. Claremont is the city of colleges and is very attractive to retirees.

Northern California Coast
San Luis Obispo, halfway between Los Angeles and San Francisco, is an extremely desirable place to retire. It has beaches, a major university (Cal Poly), and an interesting and livable city. San Francisco is of course beautiful but very expensive, as are its suburbs of Berkeley and Walnut Creek. Going north from there Mendocino and Eureka offer plenty of charm and less congestion.

Wine Country
Wine is grown in a large part of the state but the major growing areas are around beautiful Santa Barbara and the charming Danish tourist town of Solvang (that’s where the movie “Sideways” was filmed). Going north from there great wine and food are synonymous with Napa, Santa Rosa (home to several active adult communities), and Sonoma. These are great places to retire, if you can afford to live there.

Central Valleys
Running north-south is the great agricultural district of California, sandwiched between the coastal mountains and the Sierra Nevada to the east and the Nevada border. Towns like Chico, Sacramento, Bakersfield, and smaller places like Grass Valley make interesting and less expensive places to retire.

The Sierra Nevada Mountains
The resort areas around Lake Tahoe, Squaw Valley, and Mammoth offer a retirement option in the mountains and lake environment. Winters are very snowy but the outdoor recreation in the form of hiking, skiing, mountain biking, and fishing are superb. The towns are small and life is quieter than along the coast.

The Desert

Beautiful Palm Springs


As we mentioned California has its share of deserts. The most famous is the Mojave, home to a few small and somewhat dusty towns and a very large military presence. Palm Springs is the place in California that probably attracts the most out of state retiree residents. Many of them are snow birds, while a few live here full time. The town of Palm Springs is funky and gay-friendly with a strong cultural presence. But there is an endless string of other towns like Rancho Mirage, Palm Desert, La Quinta, and Banning in the area. Golf and tennis are big here as there are a large number of active adult communities here in the Coachella Valley. Idyllwild is a delightful small town in the mountains near Palm Springs.

Top 10 California Retirement Towns
Based on the number of visitors who read reviews of individual California towns at Topretirements for the last 6 months, the 10 most popular California towns for retirement are below. But, given that this site has reviews of 52 different California towns, we recommend you go deeper than that to find some that might appeal to you, as obviously in this short an article we cannot do them all justice.
1. San Diego
2. San Luis Obispo
3. Palm Springs
4. Santa Barbara
5. Napa Valley
6. Eureka
7. Berkeley
8. La Jolla
9. Claremont
10. Tahoe
(Oceanside, Chico, and Santa Rosa were close)

10 Most Popular Active Communities
California has an amazing array of active adult, 55+, and retirement communities to choose from. Laguna Woods Village is very large and by the most popular on this site. The Palm Springs area has dozens if not hundreds of such communities, as does the area south and east of Los Angeles. Prices can range from ultra-luxury to very, very inexpensive. We recommend that members explore our California Active Community Directory to check out specific communities. The 10 most viewed active communities during the last 6 months were.
1. Laguna Woods Village (Laguna Woods)
2. Pacific Regent (La Jolla)
3. Trilogy Central Coast (San Luis Obispo)
4. High Country Villas (San Diego)
5. Carlsbad by the Sea (San Diego)
6. Sunrise Terrace (San Luis Obispo)
7. The Fountains at the Carlotta (Palm Springs)
8. The White Sands at La Jolla (La Jolla)
9. Hummel Village (San Diego)
10. Ashby Village (Berkeley)

Observations
– California is a surprisingly diverse place to retire from the standpoint of geography, climate, type of environment, and cost of living.
– Topretirements has reviews of 52 retirement towns for California and 111 active adult communities, which makes it one of our most reviewed states.
– Coastal real estate is extremely expensive but inland there are bargains to be had.
– From a tax standpoint for retirees California is not a great place on some, but not all scores. Its overall tax burden is 6th highest in the nation. But if your income is not high your taxes will not be too bad, except for sales tax. Property tax is controlled so that if you have owned your house for a long time your property taxes will not be too onerous.
– If you want to retire in California, there are plenty of places where the living will be good, even affordable.

For further reference:
California Retirement Towns and Active Communities
State Retirement Guides
Gulf Coast Retirement: Sun, Tax-friendly, and a Lower Coast of Living
Florida Retirement 101
Retirement in the Southwest Comparison: AZ, NM, and UT
Dueling States: Arizona vs. Florida
Dueling Carolinas
Comparing the Mid-Atlantic States

Comments? Please let us know in the Comments section below what you think about a California retirement, whether you have considered it, currently living it, or whatever.



Posted by John Brady on June 26th, 2012

16 Comments »

  1. This is a laughable article. It reads as though someone opened up a dictionary and found “California”. Sweeping generalities,poor knowledge of the state, climate and residential values. It appears to be written by someone from the east coast who visited for a weekend. “Pathetic” is a viable description but, to make it more pleasant, let’s stick with “laughable”. Remind me that future articles on areas I am NOT familiar with are likely to be as accurate and reliable.

    Editor’s note: We’re sorry you are disappointed. We try to do our best. Suggestions to improve this are welcomed.

    by k ayers — June 28, 2012

  2. I have to agree that this is very misleading. You fail to mention that many senior communities in California are very affordable. Laguna Woods village has 2 bed properties under $100k. Other affordable options in very desirable areas are several in Oceanside, Rossmoor in Walnut Creek, Oakmont in Santa Rosa, and many more.
    Anyone reading this needs to do their own homework. At the risk of being slapped down, I suggest you ask someone who knows California to write about it in the future.

    by Ann — June 28, 2012

  3. I respectfully disagree with Ms/Mr Ayers. I have lived in California for 50+ years and the only area with which I am not familiar is the very northernmost part of the state. I found all the information very accurate and – in view of the many criticisms being voiced about our state – I appreciate all the positive comments. (In honesty I have to add, however, that sales tax can be onerous because in L.A. County it is a whopping 8.75 percent!) I am not a native Californian, but it has been my home for half a century and we raised our large family here. With all its faults and problems, I love California. Because our personal healthcare system happens to be limited to Southern California we will probably stay here the rest of our lives. It’s nice to hear someone say something good about that prospect, rather than the reverse. Thank you.

    by a harrison — June 28, 2012

  4. Love it or hate it, California is the Golden State and will remain so. It has had its heyday, SEVERAL times… Like any other state, it all depends upon how you choose to live AND your attitude that generates your experience. If you want to dislike California, you’ll find plenty of reasons to do so. If you love California, you’ll also list oodles of things that make it so for you.
    I’ve been in California for almost as long as “a harrison”, and would leave IF I could find someplace like it with more advantages. So far, no go.
    Being retired now, I love my one acre INSIDE a nature preserve (which balanced out the onerous freeway traffic in So. Cal), my year-round gardens providing my food and beauty, and the amazing ability to be either at the beach or over 7,000 feet in alpine beauty within an hour of where I live. I’m not in those “top 10 retirement towns” because those places DO NOT offer me what I can get and desire elsewhere. I can’t have my sheep in my back yard in Claremont. Yet I have the University of California under two miles away with all its amenities. And I’m not someone who looks to a “retirement community” to drive my social life (I’m a woman who rides a HARLEY, so the crowd at “the 19th hole” is utterly boring to me). Taxes? If you SPEND, you’ll pay taxes. I live conservatively in that 8.5% tax area, and don’t feel its bite.
    The best part about living in (Southern, for me) California is the ability to find exactly what fits your social and emotional needs due to the diversity of the people and cultures who live here. Want conservative Christianity? = Temecula. Golf loving nut? = Trilogy in Corona or Hemet. Gay? = Palm Springs, or tight social niches everywhere. Hundreds of options. But remember, you bring your own attitude with you, so think about your judgmental prejudices before you tell everyone that the folks at top retirements are off their rocker.

    by Ellen — June 28, 2012

  5. Oh, I forgot to mention–humidity only a few days during the summer when the tropical storms come up from the south. 😛

    by Ellen — June 28, 2012

  6. Ellen is so right on about California. Lived here since 1977, warts and all; you make life here what you want it to be. I don’t like the taxes, the traffic and the +/- 2 weeks of hot weather, but find another location where you can be in about any geographic environment you want. I live in SF Bay Area (South) and if I didn’t know any better, I would swear Ellen was the perfect California docent. If you don’t like it here, please go elsewhere and make your life there. I’m certain you will find your perfect landing spot and not complain.

    by rustybonz — June 28, 2012

  7. I am a fourth generation Californian (SF Bay Area) and found the article to be extremely accurate. Taxes are high.. sales taxes in the urban areas higher than stated due to local add-ons (In Bay Area count on 9 – 9.5%.) Weather and climate are as advertised, and recreation options abound as in comments. I too have considered leaving upon retirement (and still may), but more likely to stay and move north. Lifestyle pace and cost of living being main reasons. Not mentioned by article or commenters is the politics. Need to understand that this is a liberal state by any measure, and if that bothers you… well it is not going to change anytime soon. Also not mentioned is that the state finances are a mess. My point… taxes will go higher because the aforementioned liberals will make it so. Having said that, this libertarian soul has many soulmates here and will likely continue to enjoy life in my home state.

    by dachsie — June 28, 2012

  8. ‘More Diverse Than You Think’ is an appropriate title. Great point! Life style options in CA are enormous, too many to describe in one article. And, if you can overcome the real estate cost hurdle, the coastal areas can’t be beat. In inland areas, with little industry and few well-paying jobs, RE is generally cheap. Food is not taxed in grocery stores and once you learn the ins and outs, you’ll find many great little eateries that have great choices at reasonable prices. I especially appreciate the statistical points in the article regarding the progressive the income tax rate…… Oh, the weather is usually boring if you don’t live in the mountains!

    by Dave — June 28, 2012

  9. […] Climbed over Florida as #1 Retirement State Best States for Retirement State Retirement Guides California Retirement 101 Florida Retirement […]

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  11. great forum with good info on taxes.SFV resident for 40yrs,hot in the summer,and loved almost every minute of it.been through 3 housing bubbles but stayed in ours and watched people come and go in our area.PROP.13 is a blessing Democrats a curse.will visit other states and enjoy them as well but CA. is home.

    by robert mccaffrey — August 5, 2012

  12. […] Comparisons and Observations – Arizona is by far the most popular state for retirement of the three. Topretirements has reviews of 28 retirement towns for Arizona, but only 7 towns each for Utah and New Mexico. Our site has reviews of over 140 Arizona active adult or 55+ communities, compared to 27 in New Mexico and 15 in Utah. – Arizona is the cheapest in terms of real estate. – From a tax standpoint for retirees AZ also comes up tops, with no tax on Social Security and the lowest income tax (although the highest property tax rate). // // For further reference: State Retirement Guides Florida Retirement 101 Dueling States: Arizona vs. Florida California Retirement 101 […]

    by » Retirement 101: Arizona, New Mexico, and Utah Topretirements — March 24, 2014

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  15. Hello to all of you who have lived in CA and still do and still love it.
    I have a couple of questions? If anyone can please advice I would sure appreciate it.
    We are looking for a place to retire that has nice weather most of the year. Not hot and humid and not freezing cold.
    Most of our lives we lived in NY with 100 inches a snow a year 6 months cold. The other 6 months are nice. NY is a great place to live if you don’t get sick of 6 months of snow. So we thought we would try Florida and moved to FL. for 16 years. I could not wait to leave FL. Florida was steamy hot 9 mounts a year and warm the other 3 months. The BUGS were atrocious! The small lizards are cute but go to the bathroom all over your walk ways and houses. The tree frogs are loud and all over your house at night. They also drop there waste all over and for small critters they sure goa lot and in large they both make a big mess that you have to clean off your walks and home every week if not more. During the summer for a fee months grass hoppers come out and cruel all over your house and yard and they are the size of a hot dog! The fish won’t even eat them. There are so many other kinds of bugs all the time that most states never seen or even heard of that you can’t sit out at night with out a screened in area. So needless to say I want some where there is moderate weather with out a lot of bugs.
    SO HERE IS QUESTION ONE…Does CL. have a lot of bugs and critters that make it imposable sit out side and enjoy the weather?
    QUESTION TWO…Is it possible to buy a decent home 2/3 bedroom in a decent area for under 300k? We do not want a 55+ home area as I have a grandson who lives with us.
    QUESTION THREE…..If there is some nice areas that we can afford with nice weather how are the high schools?
    I know I did not talk about snakes as I know both FL. and CA. have them. I would think you don’t see many around your homes as the most I ever saw living in FL was maybe 10 out of 16 years.
    If anyone can please point me in some good directions to start looking this would be very helpful. Thank you very much. kathy4161

    by kathy4161 — June 16, 2015

  16. […] DE, VA, NJ Florida Retirement 101 Dueling Carolinas: NC vs. SC Dueling States: Arizona vs. Florida California Retirement 101 Retirement in the Southwest: AZ, NM, and Utah Comparing the Pacific Northwest: Oregon and […]

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