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1. Main Findings
2. Ask the Experts
3. Methodology

Main Findings

 

Overall Rank	City	Total Score	Effective	Annual	Difference	Annual	Adjusted
1	Alaska	5.69%	$3,066	-46.85%	$4,237	6
2	Delaware	6.02%	$3,246	-43.74%	$3,830	1
3	Montana	6.92%	$3,728	-35.37%	$3,561	3
4	Wyoming	7.45%	$4,015	-30.40%	$4,312	2
5	Nevada	7.72%	$4,161	-27.86%	$4,028	7

Ask the Experts < >

• Kristin J. Kleinjans Associate Professor of Economics in the Steven G. Mihaylo College of Business and Economics at California State University - Fullerton
• Laura Zettel-Watson Professor in the Department of Psychology and Coordinator of the Gerontology Academic Program at California State University - Fullerton

Kristin J. Kleinjans Associate Professor of Economics in the Steven G. Mihaylo College of Business and Economics at California State University - Fullerton In choosing the best cities to retire in California, what are the top 5 indicators? Most people like to stay in their homes as long as possible. Then why do they move? Retirees who move tend do so for three main reasons: to be closer to their children and relatives or to live with them; for health reasons, for example, because their house has stairs that make it difficult to navigate; and for financial reasons, by downsizing or moving to a place with lower cost of living. Keeping that in mind, a city that is good to live in when retired should allow for what is called “aging in place,” that is, allow people to stay in their homes and remain active as long as possible. What to look for:

• Good and easily accessible public transportation and/or ride-sharing services;

• Walkable streets, including for those with restricted mobility;

• Amenities, such as cultural entertainment and local parks;

• Community centers and home care services for the elderly, including meal services and home aides;

• Cost of living and affordability.

One factor that sometimes is neglected but that is important is the accessibility and quality of health care services. People use more health care at older ages, so considerations should include distance to and accessibility of physicians (including specialists) and hospitals. Moving is stressful for most people, so it makes sense to choose a place where services are also available if staying at home is no longer possible. This goes beyond the simple availability of assisted living or nursing home facilities. The quality and type of facilities varies widely -- there are places where people lose a lot of control over their daily lives, and places where aging with dignity might be possible. I highly recommend the book “Being Mortal” by Atul Gawande (2014), which provides a sharp and vivid image of living in elder-care facilities as a starting point for people to think about how they would like to spend their final years. It may not be possible to fulfill all of these requirements, so people need to think hard about what matters most to them and which trade-offs to make. You do not want to move to the beautiful and affordable small town and then realize that every time you want to see a physician, you have to spend two hours riding a bus. How does California compare to other warm states that are popular among retirees (Florida, Arizona, etc.)? We tend to think of retirees as a homogenous group, but it makes sense to think of retirement as at least two distinct life phases. During the first phase, retirees are active and healthy, and face few physical limitations, while in the second phase, limitations might start to creep in and mobility becomes more restricted. Wants and needs during these two phases differ, which is important to keep in mind when choosing where to live. During the first, “active” phase, for example, more and more people work. Some retire only partially, others take a bridge job or start to work again after being fully retired for a while. Only some of those unretirements are unplanned and involuntary, becoming necessary after people realize that they do not have sufficient income available after retiring. Others go back to work to keep engaged or to work in an area they were always interested in pursuing, or become involved in volunteer work. California offers a wide range of opportunities, a young and diverse population and beautiful nature. There is a place here for everybody. The social climate is also something to consider. People should think about which environment fits their preferences best. In Southern California, the climate is great all year. Most of Southern California is not as humid as Florida and not as hot as Arizona. Of course, Southern California may have a higher cost of living -- but the reason for this is that people want to live there. What can state and local policymakers do to better meet the needs of retirees in their state? I think that more and more people will be able to remain at home when they get older. Policymakers can help people remain independent. Depending on the location, this may mean different things, and includes such items as a fast internet connections, accessible sidewalks and safe pedestrian crossings, public transportation, and community centers in local neighborhoods. There are also some interesting experiments of enabling older adults to remain living in the community through innovative (and potentially subsidized) living arrangements. Germany, for example, is experimenting with creating places with shared living spaces across different generations, or with elderly living independently, but in small groups and with a caretaker. Such solutions can be very cost-effective and give people higher life satisfaction than living in an assistant living facility or nursing home. Laura Zettel-Watson Professor in the Department of Psychology and Coordinator of the Gerontology Academic Program at California State University - Fullerton In choosing the best cities to retire in California, what are the top 5 indicators?

• Affordability (home prices, tax rates);

• Access to health care (primary care physicians, emergency services, specialists);

• Access to transportation (accessible and affordable public transportation);

• Opportunities for volunteer/civic engagement;

• Quality of life (close to family, safe neighborhood, low pollution, etc.).

How does California compare to other warm states that are popular among retirees (Florida, Arizona, etc.)? California generally has a higher cost of living, including much higher home prices, and less-forgiving tax rates. For example, California taxes income from most pension and retirement accounts (but not social security benefits) and has a California-specific capital gains tax (above and beyond the U.S. capital gains tax). Florida has no state income tax, so pension and retirement incomes are not taxed; Arizona is in the middle, partially or fully taxing retirement income. California's sales tax rates also are some of the highest in the country. There are some senior-friendly exemptions, though -- California does not tax most food/grocery items or prescription medications (though neither do Florida or Arizona). What can state and local policymakers do to better meet the needs of retirees in their state? This goes hand-in-hand with the second question (above). Income and property tax reductions/exemptions at the state and local levels would assist seniors in staying in California post-retirement. Access to affordable transportation and health care are critical, especially once seniors reach a level of dependency due to advanced age, poor health, or disability. Community services that will allow seniors to stay in their homes for as long as possible will be critical, as costs drastically increase once individuals are institutionalized (not to mention the drop in well-being upon institutionalization). Most of these costs become the burden of the state (e.g., Medi-Cal). Thus, finding ways to provide and fund things like meal delivery, home health aides, transportation to doctor appointments, etc., are crucial.

Methodology

 

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