California ranks as one of the worst states for retirement, new analysis finds
Elderly people talk at Ocean Beach in San Francisco. Photographer: David Paul Morris/Bloomberg via Getty Images
OAKLAND, Calif. - With affordability being a main factor, California was ranked near the bottom, named among the worst states for retirement, according to a new analysis.
The review was conducted by the senior lifestyle and planning site "Retirement Living," which ranked the Golden State the fifth-worst state for retirees.
Affordability barriers
Researchers pointed to California's widely known high cost of living for the low ranking.
Retirees need a savings of roughly $1,157,000 to live comfortably, according to the findings, which noted that figure is one of the highest in the country.
The analysis highlighted California’s notably high income tax rate.
"The state also imposes the highest income tax in the nation at 13.3%, and while property taxes are relatively low at 0.71%, they offer little relief from the overall tax burden," Retirement Living said.
Researchers said that the state’s senior population is relatively small, at 16%, and its senior poverty rate sits at about the national average, at 12%, suggesting that many California seniors are feeling the financial strain of living here.
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By comparison
Compare those figures with those of Wyoming, which was recognized as the number one best state for retirement.
The low cost of living in the "Cowboy State" helped place it at the top, with an estimated $574,000 needed in savings to live comfortably.
Wyoming has no state income tax, and its property tax rate of just 0.58% is among the lowest in the country.
"That means retirees can stretch their savings further without worrying about surprise tax bills," researchers noted.
The poverty rate among seniors is also low at 7.4%, the analysis found.
Researchers said that the affordability of Wyoming was not the only draw for retirees.
"Wyoming ranks second in overall quality of life, thanks to a combination of low violent crime, easy access to parks, and access to healthcare facilities," Retirement Living said. "Retirees who love the outdoors, prefer a slower pace, or want to stay active with part-time work, Wyoming offers both peace of mind and a fulfilling lifestyle."
Here's a look at the 5 best and 5 worst states for retirement.
Best states
- Wyoming
- West Virginia
- Florida
- Montana
- Delaware
Worst states
46. California
47. New Jersey
48. Massachusetts
49. New York
50. Hawaii
(Source: Retirement Living)
Dig deeper:
Researchers conducted their rankings by scoring states on the following key categories:
- Affordability, which measured savings needed to retire, state income and property tax rates.
- Economic strength, which looked at senior poverty rates and the percentage of seniors working past the age of 65.
- Quality of life, which covered the most areas, including the percentage of seniors, the number of healthcare facilities, weather, crime rates, walkability, and the number of golf courses.
While California did rank low for affordability and economic strength, 47th and 40th place respectively, perhaps not surprisingly, it received a much higher rating for quality of life, coming in 21st.
"Retiring in California also means access to diverse landscapes, a rich cultural scene, and countless lifestyle options," researchers said.
But they also stressed that for most people living out their golden years, the costs to live in the Golden State were just too high.
"Those perks come with a price tag that’s simply out of reach," they said, "forcing some to relocate in search of affordability."
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