What Is a Good Monthly Retirement Income in California?
Written by
John Csiszar
Edited by
Levi Leidy
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California is almost as famous for its high cost of living as it is for its gorgeous weather, beautiful beaches and unmatched scenery. As its perks and amenities are world-class, you should expect to pay more than the national average to live in the state’s choicest destinations. But what exactly does that mean? How much do you need to comfortably retire in California?
The short answer is that it can vary wildly. While the overall cost of living in California is higher than average, the state is so large and diverse that what would be considered a livable income in some cities and towns would fall far short in others.
With that in mind, here’s a look at the range of costs you’re likely to encounter if you retire in California, depending on your housing situation, lifestyle and where exactly you choose to settle down.
National Averages
According to the most recent available data from the Federal Reserve Bank of St. Louis, the average total expenditures for Americans 65 and older are $60,087, or roughly $5,000 per month.
This figure is based on data from the most recent Consumer Expenditure Survey published by the Bureau of Labor Statistics (BLS). Here is how that data breaks down by major expense category:
- Housing: $1,787 per month
- Food: $643 per month
- Healthcare and insurance: $669 per month
- Transportation: $859 per month
- Utilities, internet and telephone: $368 per month
- Entertainment, travel and miscellaneous: $560 per month
Altogether, these categories roughly total $5,000 per month. But for California residents, some adjustments must be made.
Life Costs More in California
According to regional price parities data from the U.S. Bureau of Economic Analysis, the average cost of living across California as a whole is 12.6% above the national average.
Applying that adjustment to the nationwide BLS data means that a fair approximation of average expenses in California comes to $5,630 per month.
That’s a good starting point. But in California, the truth is that location matters — a lot.
High-cost metros like San Francisco, Los Angeles, San Jose and San Diego typically cost well above the statewide average. This is particularly true when it comes to housing, which can consume more than half of a modest retirement income.
On the other hand, regions like the Central Valley, Inland Empire or the far north of California can offer costs well below the statewide average.
Another important variable is whether or not you’ve paid off your home mortgage. While you’ll still be responsible for property taxes and other costs, such as home maintenance and potentially homeowners association (HOA) fees, you’ll still likely be able to trim thousands of dollars off your monthly income needs.
So, What’s a ‘Good’ Monthly Retirement Income?
The mathematics behind determining a “good” monthly retirement income in California are varied. A homeowner still paying their mortgage on the beach in Southern California will need a lot more to live off than someone with a paid-off condo in Bakersfield. But here’s a range of estimates that takes into account these numerous variables:
- $4,000 a month: Possible in certain low-cost areas, especially with paid-off housing and a frugal lifestyle
- $5,000 a month: Comfortable for a single retiree in many areas
- $6,000 a month: Closer to the average amount required on a statewide basis
- $8,000 or more a month: Should be enough for most California retirees to enjoy a comfortable lifestyle that includes travel and perhaps even coastal living, especially with a paid-off home
The Bottom Line
These average income levels are just a starting point for determining what a good retirement income might be for you in California. You’ll have to adapt these averages to your own personal financial profile, including your lifestyle, location, healthcare needs and projected retirement income. Building in a buffer for unexpected expenses — or simply to provide yourself with a bit of flexibility and freedom in your golden years — is a good way to make sure your income can cover all of your expenses as you ride into the sunset.
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