Retiring in California: a complete guide

1 min read by Kate Morgan Last updated June 13, 2024

This article will take you through the main things you need to consider if you are retiring in California.

Summary

  • California is making it one of the top states with a large retirement population, with over 13% of the population over the age of 65.

  • California does not have a specific retirement age, meaning you can retire whenever you choose.

  • Palm Springs, San Diego, and Santa Barbara are considered some of the best places to retire in California.

  • If you’re planning your retirement, a financial advisor can develop a personalized plan to help you achieve your goals.

What is the retirement age in California?

Like many states, California has no specific retirement age that is mandated by law.

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This means that individuals are free to retire whenever they choose as long as they are able to support themselves financially.

However, there are some age-related benefits and considerations for retirees in California:  

  • Social Security benefits: The earliest age at which you can begin receiving Social Security retirement benefits is 62, but if you delay taking benefits, your monthly payments will increase. Full retirement age (FRA) is between 66 and 67, depending on your birth year. Delaying benefits until after FRA can result in even higher monthly payments. 

  • Medicare eligibility: Medicare eligibility begins at age 65, regardless of retirement status. However, if you choose to retire before age 65, you will need to find alternative healthcare coverage until you become eligible for Medicare. 

  • Age discrimination: It is illegal for employers to discriminate against employees or job applicants based on age. 

  • Retirement savings: Regardless of retirement age, you must start saving for retirement as early as possible. Many financial experts recommend saving at least 15% of your income for retirement. 

Where are the best places to retire in California?

If California is your chosen retirement state, here are some of the best places to retire: 

  1. Palm Springs: Located in the Sonoran Desert, Palm Springs is a popular retirement destination for those who enjoy a warm climate and outdoor activities such as golfing, hiking, and swimming. It also has a range of senior-friendly amenities and services, such as healthcare facilities and senior centers. 

  2. San Diego: San Diego is a coastal city with a mild climate and a range of outdoor recreational activities, including hiking, surfing, and boating. For retirees, San Diego offers a variety of senior-friendly communities and services, including assisted living facilities and transportation services. 

  3. Santa Barbara: This coastal city is known for its Spanish Colonial architecture, beaches, and wineries. Santa Barbara offers a variety of senior-friendly amenities, including healthcare facilities and senior centers. The city is also home to many parks and green spaces, which provide opportunities for outdoor recreation. 

  4. Napa Valley: Known for its world-renowned vineyards and wineries, Napa Valley offers a serene and relaxing retirement destination. The region is also home to a range of senior-friendly amenities and services, including healthcare facilities and senior centers. The city of Napa has a charming downtown area with shops, restaurants, and cultural attractions. 

  5. Monterey: This coastal city is located on the central coast of California and offers a range of recreational activities, such as whale watching, kayaking, and golfing. Monterey is also known for its seafood restaurants and historic sites, such as Cannery Row and the Monterey Bay Aquarium. 

  6. Sacramento: California's capital city, Sacramento, offers a mix of urban amenities and natural beauty. Retirees can enjoy exploring the city's many historical and cultural attractions, such as the California State Capitol Museum and the Crocker Art Museum. The city also has many parks and green spaces, including the American River Parkway, which offers hiking, biking, and fishing opportunities. 

Match with a financial advisor and get expert retirement advice

If you plan on retiring to California, it's worth speaking to a qualified financial advisor to find the best city for your budget.

Match with an advisor below.

How can I retire in California?

If you are a US citizen, you can retire anywhere in the US.

However, moving to a different state for retirement doesn’t come without its challenges.

Before you move state or even city, you need to get your affairs in order, including sorting all social, medical, financial, and legal issues before you move.

Is California a good place to retire?

According to data from the U.S. Census Bureau in 2020, California had a population of approximately 39.5 million people, with over 13% of the population being over the age of 65, making it one of the top states with a large retirement population.

With its stunning coastline, mountains, and bustling cities, California offers a unique retirement experience that attracts many retirees every year.

Retirees seeking a diverse and dynamic environment with access to outdoor activities, cultural events, and a moderate climate are drawn to California as the location to live out their golden years.

What are the pros and cons of retiring in California?

Before choosing where you’re going to spend the rest of your life, it’s important to weigh up the pros and cons. Here are some of the benefits you can enjoy if you choose California as your retirement location.

Why people choose to retire in California:

  • Diverse environment: California is known for its diversity, from its bustling cities to its scenic natural areas. Retirees can enjoy living in a diverse environment that offers plenty of opportunities for exploration and cultural experiences. 

  • Moderate climate: California's climate varies greatly depending on the region, but many areas have a moderate climate with mild winters and warm summers. This makes it an attractive destination for retirees who want to avoid harsh weather conditions. 

  • Outdoor activities: California is home to numerous national parks, forests, and beaches, providing ample opportunities for outdoor activities such as hiking, camping, fishing, and surfing. 

  • Cultural scene: California has a vibrant cultural scene, with numerous museums, galleries, and performing arts venues. The state hosts several festivals and events throughout the year, including the Coachella Valley Music and Arts Festival, the San Francisco International Film Festival, and the Los Angeles Times Festival of Books. 

However, like all states, California has drawbacks, too. If California is at the top of your wishlist, here are some cons you should consider.

What puts people off retiring to California?

  • Cost of living: California's cost of living is generally higher than the national average, which could be a concern for retirees on a fixed income. Housing and healthcare costs, in particular, are higher than in many other states. 

  • Traffic: California is known for its heavy traffic, particularly in and around the major cities of Los Angeles, San Francisco, and San Diego. 

  • Natural disasters: California is prone to natural disasters such as wildfires, earthquakes, and droughts, which could be a concern for retirees living in certain areas. 

How much tax will I pay in California when I retire?

One of the biggest advantages of retiring in California is that the state does not tax Social Security income. This means your Social Security retirement benefits are tax-free.

However, the state does impose income tax on other forms of taxable retirement income.

It’s also worth noting that California does not impose a state inheritance or estate tax, meaning your beneficiaries will not have to deal with a hefty tax bill if you pass away.

Alongside your retirement income, you will also need to pay other California taxes, such as property tax, sales tax, and motor tax. These are generally higher than elsewhere in the US.

Plan your dream retirement

California offers a range of retirement options, from coastal cities to desert towns.

Retirees can enjoy a mild climate and a variety of recreational activities but should be prepared for a higher cost of living.

It's important to seek expert financial advice to weigh up all of the costs associated with retiring in California, including property taxes, insurance, and living expenses, in order to make an informed decision about whether the state is the right choice for your retirement. 

Content writer

Kate Morgan

Kate has written for leading publications and blue chip companies over the last 20 years.

Want to retire in California?

A financial advisor can help you plan and realize your dream retirement.