Experts Explain Whether It’s a Good Move for Boomers To Retire In California
Written by
Angela Mae
Edited by
Molly Sullivan
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The cost of living in California is notoriously high. In fact, only Massachusetts and Hawaii rank higher in terms of overall costs. Everything from groceries and housing to utilities, transportation and healthcare is more expensive than the national average.
It’s largely due to high costs that so many Californian residents are on their way out in search of more affordable areas. According to the Los Angeles County Professional Peace Officers Association, other common reasons to leave include the political situation, crime, high taxes and other personal reasons. Despite this, not everyone wants to leave The Golden State. For some people, particularly retirees, the idea of leaving just doesn’t appeal to them as much as staying.
GOBankingRates spoke with the experts to see whether it’s a good idea for boomers to retire in California. Here’s what they said.
Affordability Is a Major Problem
For many baby boomers, housing affordability is a major concern.
“California can be affordable, but the places that are affordable are normally not very desirable. For example in Porterville, California, according to Zillow, the median home price is $315,000, which is well below the median home price in the U.S., but you’ll be in the middle of nowhere,” said Holden Andrews, real estate investor and founder of Helpful Home Group. “Same is true with Fresno or Bakersfield … There [are] affordable houses out there, but most people don’t want to live there.”
This isn’t an issue for all boomers, however, which is why those considering retiring in California should weigh their options — and financials — carefully.
Take Deb and her husband, a pair of boomers who decided to retire in California, as profiled by Business Insider. This couple was amongst those who purchased a more affordable property back in the 1980s and have since paid off their mortgage. At the time, the house cost just a little over $300,000. Over the past few decades, however, it’s soared in value with homes in the neighborhood going for anywhere from $1.6 million to just over $2 million.
Given how much equity they’re sitting on, Deb and her husband aren’t all that concerned about the financial aspect of living in California. But if costs are a concern — as is often the case — it’s worth knowing that even affordable locations might not be the best fit.
Finding Accessible Housing at a Good Price Is Tough
Baby boomers are somewhere between the ages of 60 to 78, so accessibility is a major priority for many, including Deb and her husband. But many of the available homes in the area lack the features they need as seniors.
The properties that do have better accessibility tend to be on the smaller side, which is limiting since this particular couple wants something that still has some outdoor space and a spare room or two for a home office and visitors. Most of the condos they’ve checked out only have one or two bedrooms and no outdoor space.
As Deb put it, many of the places she’s seen “feel and seem like they’re built for young people” with open-plan floorplans and smaller living spaces.
“They even market, ‘the greatest thing about our complex is the gym and the shared courtyard, shared rooftop environment, the bike racks’ — all of these things that might not be first on the mind of a senior,” she shared.
According to the experts, this is also a concern for others in that age range — as well as those with mobility issues. And when you factor in costs, which do impact most retirees living on a fixed income, there’s an even greater concern.
“The housing challenge for everyone in California is significant,” said Sean McGrail, founder of Home Sweet Homeshare. “We’re seeing median home prices 2-3x higher than other states, coupled with limited inventory made worse by the fires. This creates a particularly acute problem for fixed-income retirees who are being pinched by inflation of utilities and property taxes.”
According to McGrail, this has caused many seniors to get pushed out of their neighborhoods because the costs are simply too high, especially compared to what they were when they first bought their homes 25 or so years ago. And with limited accessible housing options, many are getting pushed out even further.
There’s a Housing Shortage
There’s also a shortage — not just of available homes but of homes specifically built for older retirees. Rather than prioritize high earners or retirees, developers are primarily building smaller or multifamily construction units. This means more money per square foot, but fewer opportunities for people like Deb and her husband to move.
“Real estate developers are missing a huge opportunity to target [those at the higher end of the market] — not to create senior housing, but to create condominiums that are more versatile and appeal to people who have a little bit more money,” said Deb, and “who could afford to pay a little bit more to have these amenities, to have a unit that’s a little larger, that has a little more storage, that has maybe even more flexible layouts, and some kind of outdoor space.”
According to McGrail, there are ways to potentially resolve — or at least minimize — this housing shortage crisis.
“We could solve the housing crisis if we connected renters with the 485,000 senior homeowners who live alone over the age of 65 in California that are empty nesters in a single-family house with two or more bedrooms,” McGrail said.
In fact, McGrail’s team is working to address this problem through an innovative model that enables current homeowners to remain where they are but with a background-checked roommate. These roommates not only help out financially, but can offer weekly household help — a major plus for those with limited mobility or who are lacking in much-needed accessibility.
Community Is Lacking in Some Places
According to Planning.org, there are three major reasons why people tend to move. They either want to be closer to loved ones (41%), find a better neighborhood (29%) or lower housing costs (25%).
None of these apply to Deb and her husband. They are quite content staying in their neighborhood. They’ve got a decent social circle and live in an area that’s very walkable with parks, farmers markets and the like within easy range.
But the lack of community is still an issue for many boomers. For those who want to retire in California with a good community — and who aren’t concerned about the costs — there are options.
“If someone is looking for a good place to retire I would recommend La Quinta, California. It is not the most affordable, but it also isn’t going to break the bank like San Diego, San Francisco or Los Angeles,” Andrews said. “There is good weather most of the year, there is a strong community of seniors who do a bunch of different activities like pickleball, golf or tennis to name a few, and it is only two hours away from Los Angeles, which has incredible healthcare and LAX for international travel.”
Typical Cost of Living in California
Regardless of budget, it’s worth noting the typical cost of living in California. This can be vital, especially for those living on a fixed income who are trying to decide whether retiring in the state is a smart financial move.
According to a recent GOBankingRates study, here’s what the average annual expenditure in California is (based on generation):
- $32,939 for Gen Z
- $52,840 for millennials
- $62,591 for Gen X
- $52,616 for boomers
For boomers (those born between 1946 and 1964), here’s how a typical annual budget breaks down:
- $6,196 groceries
- $14,260 healthcare
- $17,709 housing
- $6,475 utilities
- $6,727 transportation
- $1,248 miscellaneous
Even without a mortgage or car payment, regular expenses like property taxes, homeowners insurance, car insurance and maintenance can add up. Before deciding to relocate or age in place, consider your budget and other needs. It can help you make the best move for you.
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