As the world’s fourth-largest economy, California can offer retirees a life full of choices, with an array of climates and cultural activities. Jump to the best places to retire in California or read more about how the Golden State could make for a well-rounded retirement.

Is California a good place to retire?

California can be a great fit for many retirees, with a landscape sporting beaches, cities, mountains, and forests all in one state. Nearly a quarter of Americans want to retire close to the ocean, according to Empower research, and California has plenty to offer — with 840 miles of coastline along the Pacific Ocean.¹

Paying attention to retirement savings can be an especially important goal when envisioning retirement in California. The Golden State has the second-highest average net worth in the country, at $855,000, and residents may appreciate the financial cushion to afford a higher cost of living. Those retiring in California could see higher expenses than they’re used to depending on their lifestyle: Californians are among the top spenders in America, averaging $6,826 a month. The cost of insurance in California is another key consideration for a retirement budget. After recent wildfires and natural events in the past few years, California has seen seven of its top 12 home insurers lower their coverage or leave the market.²

Does California tax Social Security?

California does not tax income from Social Security, and this includes retirement, disability, and survivor’s benefits.³ Federal income taxes may still apply to retirees collecting payments in California.

California tax breaks for seniors

Retirees can consider these property tax breaks for seniors in California if real estate is part of their retirement plan:

• Property Tax Postponement (PTP) program: Homeowners who are seniors or have qualifying disabilities could be eligible to defer the current year’s property taxes on their principal residence. The State Controller requires additional criteria, including having at least 40% equity in the property and a yearly household income of $53,574 or less. However, the amount will still need to be repaid, since a lien is placed against the property.⁴
• The Homeowner’s Property Tax Exemption: Available to California residents who own property and use the home as their permanent residence. Property owners could be eligible to reduce the taxable value of the home by $7,000.⁵ 

Best places to retire in California

Here are 10 of the best places for retirees in California based on population, housing, cost of living and healthcare, and amenities.^6,7,8,9

Sacramento

• Population: 535,798
• Share of population 65+: 14%
• Median home value: $492,574
• Cost of living vs. national average: 29% higher
• Cost of living vs. state average: 14% lower
• Cost of healthcare vs. national average: Equal to national average
• Amenities score: A+

As California’s capital city, Sacramento offers A+ amenities like restaurants, professional baseball, concerts, and the state fair. The nearby Sacramento International Airport gives retirees easy access to travel in their golden years. With its lower cost of living compared to the rest of California, Sacramento may appeal to retirees looking to buy a home, with a median home price that’s under $500,000.

San Diego

• Population: 1,404,452
• Share of population 65+: 14%
• Median home value: $1,033,526
• Cost of living vs. national average: 45% higher
• Cost of living vs. state average: 3% lower
• Cost of healthcare vs. national average: 2% higher
• Amenities score: A+

Along the southern California coast sits San Diego, a city with a relatively sunny climate, miles of beaches, and a world-class zoo. Its location close to the border with Mexico makes it a prime place for cruising to port destinations like Ensenada and Cabo San Lucas. There’s no shortage of cultural events within the city, such as the yearly Comic-Con international festival. Despite home values topping $1 million on average, San Diego’s combination of recreational access and city life could be a good fit for retirees.

Stockton

• Population: 324,975
• Share of population 65+: 13%
• Median home value: $447,101
• Cost of living vs. national average: 34% higher
• Cost of living vs. state average: 11% lower
• Cost of healthcare vs. national average: 351% higher
• Amenities score: B+

Nestled in California’s Central Valley, Stockton acts as the seat of San Joaquin County, attracting various festivals and cultural celebrations. Sitting at the corner of a river delta, Stockton can experience hotter summers than the Bay Area, about 1.5 hours away. Empower research found that 24% of Americans want to retire in a place with a warmer climate, so Stockton could fit the bill.

Palm Springs

• Population: 45,453
• Share of population 65+: 34%
• Median home value: $652,698
• Cost of living vs. national average: 20% higher
• Cost of living vs. state average: 20% lower
• Cost of healthcare vs. national average: 3% lower
• Amenities score: A+

In Southern California, drive east past Los Angeles and Palm Springs awaits. The city is among the more balanced cities for retirement, with its cost of living 20% lower than the rest of the state and having an A+ amenities score. Pools are a popular feature of many homes, and the year-round sun attracts golf enthusiasts. The area boasts more than 100 golf courses.¹⁰

Redding

• Population: 93,502
• Share of population 65+: 20%
• Median home value: $397,854
• Cost of living vs. national average: 10% higher
• Cost of living vs. state average: 26% lower
• Cost of healthcare vs. national average: 2% lower
• Amenities score: A+

In Northern California, Redding can be one of the best places to retire on a budget in California. About 100 miles from the Oregon border, Redding has a lower median home value of $397,854, which could make homeownership in retirement more affordable, and it’s 26% cheaper to live there than the rest of California.  A fifth of the city’s population is 65 or older, so retirees could find it less of a hassle to build a community.

Fresno

• Population: 550,105
• Share of population 65+: 12%
• Median home value: $392,447
• Cost of living vs. national average: 8% higher
• Cost of living vs. state average: 28% lower
• Cost of healthcare vs. national average: Equal to national average
• Amenities score: D+

About 220 miles north of Los Angeles, Fresno can be a gateway to many of California’s natural attractions, despite a lower amenities score for the city itself. Fresno is the closest major city to the world-renowned Yosemite National Park, which is 60 miles away, and acts as the entrance to Sierra National Forest. With a population above 500,000 people and home values less than $400,000, Fresno can provide city life that’s easier on a retirement budget.

Oakland

• Population: 443,554
• Share of population 65+: 14%
• Median home value: $766,802
• Cost of living vs. national average: 38% higher
• Cost of living vs. state average: 8% lower
• Cost of healthcare vs. national average: 23% higher
• Amenities score: A+

The Port of Oakland is the busiest port in Northern California, and the city is bustling for retirees as well.¹¹ Parks, lakes, and theaters can provide recreational and creative outlets for those looking for leisure, and San Francisco is one bridge away to layer on more event opportunities. Though paying for healthcare is higher in Oakland than the rest of the country, retirees will save on other expenses, as the overall cost of living is 8% lower than the rest of the state.

Truckee

• Population: 17,240
• Share of population 65+: 16%
• Median home value: $1,038,810
• Cost of living vs. national average: 52% higher
• Cost of living vs. state average: 2% higher
• Cost of healthcare vs. national average: 22% higher
• Amenities score: F

About 20 minutes from the edge of Lake Tahoe is Truckee, a California destination for winter wonders with a more small-town feel. There are around seven ski resorts within an hour of Truckee, though the city ranks lower in other amenities.

Truckee’s proximity to peaks may appeal to the 14% of Americans who say they want to retire closer to the mountains, according to Empower research.

Bakersfield

• Population: 417,468
• Share of population 65+: 11%
• Median home value: $399,843
• Cost of living vs. national average: 12% higher
• Cost of living vs. state average: 25% lower
• Cost of healthcare vs. national average: 6% lower
• Amenities score: F

Bakersfield is one of California’s biggest hubs for oil and agriculture, located in the Central Valley just over 100 miles north of Los Angeles. Though it has a lower amenities score, Bakersfield’s open spaces can attract adventurous retirees: The city hosts farming and racing events and is home to many campgrounds. Should the need arise, healthcare is also more affordable in Bakersfield, 6% lower than across the country.

San Francisco

• Population: 827,526
• Share of population 65+: 17%
• Median home value: $1,310,207
• Cost of living vs. national average: 67% higher
• Cost of living vs. state average: 11% higher
• Cost of healthcare vs. national average: 28% higher
• Amenities score: A+

Though California is one of the highest cost-of-living states in America, for many retirees, a memorable experience to live a little is worth the price — such is the case in San Francisco. The city’s mild Mediterranean climate and ample amenities may need some planning, with median home values topping $1 million. Home to multiple professional sports, San Francisco plays host to additional events related to the nearby Silicon Valley and traveling Broadway shows.

Why do people retire in California?

California is America's most populated state, and retirees are drawn to its assortment of urban and natural attractions. Despite a higher cost of living than other places in the United States, California’s energy from outdoor experiences and variety of industries can’t be ignored.