States – California

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California has many features that make it a top retirement destination: outstanding natural scenery, some of the world’s best cultural attractions, and a climate matched in few other places in the world. The state is known for its exceptional outdoor recreational activities, arts and music, unique architecture, vineyards, and surfing and swimming along 840 miles of ocean coastline, the third-most in the country.

California’s climate is characterized as Mediterranean. Summers are warm and dry and winters are cool and wet. Moist air from the Pacific influences the state’s climate particularly along the coastline. The weather varies significantly within the state – inland, it gets more hot in the summer, and there are no ocean breezes.

These amenities come, of course, at a cost. California’s cost of living is 50% higher than the national average. The median home price in 2015 was $393,000, almost twice the national median.

Additionally, its tax burden is the 6th highest of any state. The state income taxes are the second highest in the nation. Its top marginal income tax rate is 9.55%. The income tax system is very progressive and taxes higher income residents at a much higher rate. Social Security benefits are exempt but other retirement income is taxable. There is a homestead exemption and small credit for senior residents. Sales tax is 8.25%, also the highest of any state, and local districts can add on another 1.5%. California has an estate tax.

The state property tax is a flat 1% and individual districts can add on voter-approved and other taxes. The property tax and voter-approved taxes are based on the home’s purchase price, adjusted upward annually by 2 percent. Property tax is one of residents’ largest taxes. In some years, property taxes exceed state income tax.

Another downside relates to the state’s well-known fiscal situation. California’s budget shortfall is estimated at $24 billion, despite a multibillion dollar tax increase in 2012. Many expect the budget shortfall will require additional tax increases and cuts in state services in the near future.

But if you’re thinking of settling in the Golden State for your golden years, here are some possible places to look into.

Eureka

Located in the Redwood forests of northern California, Eureka is one of the few larger cities in that area, with a population of 27,000. The forests, mild weather, and nearby Humboldt Bay and ocean beaches enable residents to enjoy year-round hiking, biking, and fishing.

There is a picturesque, walkable downtown with many stately homes. Although the homes include some georgeous old Victorians, the median home price is well below the state average. Eureka is one of the most affordable towns in California.

Eureka has an active artistic community. The city was rated high in John Villani’s book “The 100 Best Small Art Towns in America. The town is decorated with outdoor murals. Eureka hosts the area’s largest cultural and arts event, “Arts’ Alive!” each month. More than 80 Eureka galleries and businesses are open for tours, along with live music, food, and beverages.

Eureka also holds other cultural events and festivals year round including the Redwood Coast Music Festival. The kinetic sculpture race combines art and athleticism in organized races between human-powered, amphibious, all-terrain works of art. Eureka is close to Humboldt State University, which sponsors more cultural attractions and events in the area and also offers ongoing education opportunities.

Other local attractions include the 67-acre Sequoia Park Zoo, North Coast Repertory Theatre, and Eureka Theatre, two live performance venues. There is also the Humboldt Senior Resource Center, which promotes quality of life among seniors and caregivers.

Eureka is the regional center for healthcare. St. Joseph Hospital in town is the largest medical acute care hospital north of the San Francisco Bay Area on the California coast. Bus, train, and regional airport service are available nearby.

However the local economy has been sluggish with high unemployment. Added to the fact that the region is a hub of marijuana growing, this means the crime rate is relatively high.

Riverside

Riverside is a centrally located city in southern California. Located just east of Los Angeles, on the western border of the Mojave Desert, it is 60 miles from Los Angeles International Airport and 15 miles from the smaller Ontario airport. Public bus transportation is readily available in town, and Riverside connects to Los Angeles via the Metrolink commuter rail service.

Riverside has many amenities including over a dozen museums, several colleges and universities, top healthcare facilities, and a median home price lower than the state median. The 21,000-student University of California at Riverside campus sponsors many cultural events and attracts an educated workforce to town.

Other local attractions include the California Citrus State Museum, the Riverside Art Museum, the International Automotive Museum and the UC-Riverside Botanical Gardens. Riverside has many distinct neighborhoods that offer plenty of affordable housing areas and some active retirement communities. The crime rate, however, is slightly higher than the U.S. average, particularly in the city center.

Palm Springs

Another town in the sunny southern California desert is Palm Springs. Just 90 minutes from Los Angeles and two hours from San Diego, Palm Springs was formerly a celebrity playground for the likes of Frank Sinata, Clark Gable, and Katharine Hepburn and is today an ethnically diverse community with an active gay community, and a popular place for snowbirds and retirees.

The city hosts many cultural and other events including the Palm Springs International Film Festival and Palm Springs International Festival of Short Films, and the Festival of Native Film & Culture sponsored by the Agua Caliente Cultural Museum. The Arthur Lyons Film Noir Festival is cosponsored by the Palm Springs Cultural Center. Palm Springs Desert Resorts Restaurant Week features 10 days of food from over 100 restaurants in the area. The Fabulous Palm Springs Follies is a show at the historic Plaza Theatre which features performers over age 55.

The town has many museums and pieces of outdoor art, many celebrating the history and culture of the area. Active residents can enjoy over 100 local golf courses, 55 miles of hiking trails in the nearby San Jacinto Mountains, Cactus to Clouds Trail, Mount San Jacinto State Park, and Palm Springs Aerial Tramway. The city also maintains nine parks in town. Smaller desert communities are a short drive away, as are the San Bernardino Mountains, the Salton Sea, Big Bear and Lake Arrowhead. Palm Springs has its own international airport near downtown.

Redding

A town of 92,000 in far northern California, Redding has lots to offer for active retirees. There’s sunshine 88% of the time, the second-most of any city in the nation; a moderate climate with hot and dry summers and wet winters; and the Sacramento River for hiking. The median home price is under $200,000.

One of the first organized mountain bike races in the world was held in town, and mountain biking continues to be a popular activity. The Lemurian Shasta Classic mountain bike race is held annually.

Redding has over 20 miles of paved trails along the Sacramento River and access to the 220-mile Sacramento River Trail. The community promotes walkways and bikeways throughout the city; in 2012 Redding earned Bicycle Friendly Community bronze status from the League of American Bicyclists.

There is an active senior center in town that has classes, exercise sessions, games, and dancing. There are also two live performance venues and a park with an open air stage.

The city hosts many events of various types. These include Market Street Faire, a weekly summer community event that includes a farmer’s market, live music, performances, food vendors, brewers, wineries, crafts and more, and Sundial Film Festival which highlights professional and amateur filmmakers and photographers.

Redding has a municipal airport and has two major hospitals. The town is conveniently located along Interstate Highway 5, two hours north of Sacramento. There are shuttles to the Sacramento and San Francisco airports.


For more information about retirement in California:

State overview in facts and figures

State taxes

State services for senior residents

Profiles of major cities

Retirement communities

Best regions for retirement