It’s on the west coast)

Fabulous weather. Major cultural events. World-class cities. With great features like these, it’s no wonder the cost of living is high in California. But it still may come as a surprise to learn that California ranks as the least affordable state for retirees in Bankrate’s most recent study of the best states to retire. The Golden State may not be the best place to spend your golden years for many Americans.

California ranked last in Bankrate’s affordability category, placing the state in 47th place for retirees overall. In other key categories, such as health care, weather and general well-being, the state fares well. However, it ranks in the bottom half of states in terms of crime. And various affordability measures accounted for a total of 40 percent of a state’s overall retirement score.

Notable state benefits may be important for employed Americans, but for many retirees, affordability is the main concern. According to Bankrate’s 2023 Financial Freedom Survey, about 41% of Americans who say they lack financial security cite a lack of money for retirement as a top reason.

Of course, if money is not a particular concern, California can be an attractive retirement location. But the best state for retirement in 2024 – Delaware – offers relative affordability along with other benefits.

Why does California rank so poorly in retirement?

California ranked 47th overall in Bankrate’s annual Best States for Retirement survey, based on the following factors and weightings:

• Affordability (40%): California ranked 50th. This factor includes property taxes, state and local sales taxes, homeowner’s insurance premiums and the cost of living index.

• Well-being (25 percent): California ranked 15th. This factor includes the number of adults aged 62 and older per capita, community well-being index, diversity index by state, and arts, entertainment and recreation establishments per capita.

• Quality/cost of health care (20 percent): California ranked 6th. This factor includes the cost of health care per capita, health facilities per capita, and the performance of the state’s health system.

• Weather (10 percent): California ranked 12th. This factor includes the frequency of natural disasters and the historical average temperature.

• Crime (5 percent): California ranked 46th. This factor includes the crime rate by state.

The heavy weighting of affordability means that states with high costs, like California, New York and Washington, often appear poorly in Bankrate’s retirement rankings.

The best and worst states will retire in 2024

California is the worst state in terms of overall accessibility

California performed poorly overall in the affordability category, ranking mostly among the bottom states in the various subcategories.

The most important subcategory is a state’s rank in the cost of living index, which weighs 25 percent in the overall affordability score. California came in a dismal 48th place here, tied with Massachusetts and ahead of only Hawaii.

California performed only slightly better in the subcategories of state and local property taxes and sales taxes, where it ranked 45th and 43rd, respectively. In absolute numbers, the average annual tax on a home of average value was $6,833, according to 2023 data from ATTOM Data Solutions.

If there’s one positive, it’s that California ranks 18th in cost of homeowner’s insurance. The average annual premium was $1,453 in June 2024, according to Bankrate data.

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California also ranks poorly in crime rates

In terms of crime rate, the Golden State also ranks poorly, finishing 46th. However, this category had the least impact in the ranking (5%), so it did not weigh too heavily on the state.

The crime segment included two subcategories: violent crimes and property crimes. Here is California’s ranking in each of them:

• Violent crimes: In 2022, California had 499.5 violent crimes per 100,000 people, placing it 45th.

• Property crime: In 2022, California had 2,343.2 property crimes per 100,000 residents, which placed the state 42nd.

After weighting these factors, California ranked 46th overall in the crime category.

Notable positives for California

Although California does not rank well on affordability and crime, it scores well on a number of other factors that affect quality of life, including health care, general well-being and the weather.

Health care is a strength

The most important category in California was quality and cost of health care; it ranks sixth in the United States. With a weighting of 20 percent, this category constitutes a significant positive element for the State. Subcategories include health care cost per capita, health care facilities per capita, and state health system performance.

In terms of per capita health care cost, California ranks in the middle of the pack, at 22nd, spending an average of $10,299 in 2020, according to the Kaiser Foundation. As a reminder, Utah was the lowest, at $7,522, while New York was the highest, at $14,007.

California ranked highest in health care facilities per capita, ranking 11th. The state has approximately 325 establishments per 100,000 residents. As a reminder, Alaska tops the ranking with 387 establishments per 100,000 inhabitants, while Alabama comes in 50th, with 221 establishments per capita.

California also performed strongly in the final subcategory, state health system performance, which shows how well a state’s health system is functioning. The state ranked 13th here, while Massachusetts topped the subcategory and Mississippi finished at the bottom.

The weather is some of the best in the Golden State

Known for its sunny days, California did well in the weather category, which accounts for 10% of the overall ranking. The state ranked 12th for its weather.

The average annual temperature in California from 2000 to 2023 was 59.3 degrees Fahrenheit, according to Bankrate’s analysis of data from the National Oceanic and Atmospheric Administration (NOAA). That temperature puts the state in 13th place, behind states like Hawaii (75.7 degrees) and retiree paradise Florida, which ranks second at 71.7 degrees.

Where California has faltered a bit is in the natural disaster subcategory. Although the state does not suffer from hurricanes or many tornadoes, it is infamous for its earthquakes. California experienced an average of 258 earthquakes per year between 2010 and 2015. The state nevertheless ranked 22nd in this subcategory.

High well-being scores

California also ranked well in what Bankrate calls its well-being score, which accounts for 25% of the overall score. California ranks 15th in well-being, measured by the number of adults aged 62 and older per capita, Community Well-Being Index, Demographic Diversity Index and health facilities. art, entertainment and leisure per capita.

California is on the young side, ranking 46th in the number of adults 62 and older per capita. Out of 100,000 people, 19,290 are 62 years or older. Maine tops this list, with about 27.3 percent of its population aged 62 or older.

When it comes to the number of arts, entertainment and leisure establishments per capita, California has lived up to its reputation as a global media hub. The State comes in third place.

California offers strong racial and ethnic diversity, ranking second in this subcategory.

It also performed well in the Community Well-Being Index, ranking sixth, as measured by ShareCare in 2022. For context, Hawaii and Massachusetts rank first, while Mississippi finishes the list .

How much house can I afford in California?

If California is on your retirement shortlist, you should carefully consider whether it fits your budget. California has many other attractive assets for retirees – a mild climate, a strong health care system and strong cultural factors – but the real question is whether retirees can foot the bill for all of this, especially with the costs particularly high rates of homeownership in the State.

Determining your budget for a new home is one of the first steps if you’re considering moving into one. This bank rate calculator can help you determine how much you can spend on your home. Working with an experienced financial advisor can also help make your retirement dreams affordable, even if they’re in a state with a high cost of living.