This article takes a look at the 15 most affordable California cities for retirees. If you wish to skip our detailed analysis on the California exodus, you may go to 5 Most Affordable California Cities for Retirees.
California Exodus: Navigating High Costs and Seeking Affordable Retirement Havens
In the state of California, renowned for its allure, there is a growing phenomenon of people resorting to equipment rentals as they contemplate leaving. U-Haul Holding Company (NYSE:UHAL), a prominent moving company in the U.S., highlights this trend, designating California as the primary state witnessing a surge in one-way departures. Analyzing over 250 million transactions, U-Haul Holding Company (NYSE:UHAL) has consistently identified California as experiencing the largest net loss of one-way movers for the fourth consecutive year. One reason for the exorbitant moves is its crazy high cost of living. According to the Missouri Economic Research & Information Center, the cost of living in the state is a whopping 38.5% higher than the national average. For the average retiree who has minimal savings and a modest monthly social security check, the prospect of residing in the state poses an almost insurmountable challenge.
As of January 2024, Redfin Corporation (NASDAQ:RDFN) notes home prices in the state to be up by 6.6%, selling for a median price of $739,200. Redfin Corporation (NASDAQ:RDFN) also highlights that between the period Nov 2023 to Jan 2024, an estimated 24% of home buyers “searched” to move to a different area. The top five states these home buyers looked for include Florida, Arizona, North Carolina, Tennessee, and South Carolina. Out of the major metropolitan areas in the US, the most searched-for destinations amongst these home buyers were Las Vegas, Sacramento, Cape Coral, and Phoenix. On the other hand, San Francisco emerged as the top-searched destination for home buyers seeking to relocate, trailed by Los Angeles, New York, Seattle, and Washington.
Being one of the worst states for the cost of living and taxes, the sole silver lining about the state is that it doesn’t tax social security. However, retirement accounts and pensions are taxed at one of the highest income tax rates in the country. Its reputation for high taxes, according to Kiplinger, primarily builds on the fact that the state has high prices that in turn lead to higher tax bills. The state also has one of the highest sales tax rates in the country, all of which can overwhelm the average retiree who primarily has his fixed income to rely on.
While U-Haul Holding Company (NYSE:UHAL) has persistently highlighted Californians relocating in pursuit of more affordable living conditions, their study also reveals growth in two cities within the state. Palmdale and the city of Los Angeles, in particular, stand out as places that have witnessed a significant net gain in rental activity, as reported by The Signal.
For those who don’t have the heart or budget to move, have family, or have some other reasons that are holding them back in the state, the pressing question becomes: where is the best place to retire in California on a budget?
While there may be many, many cheap areas in California are notorious for activities such as petty theft and crime. As such, three of the least expensive and safest places to live in California, as highlighted by several sources, are Stockton, Modesto, and San Bernardino. These are the three most dangerous cities in the state, and many individuals, especially retirees, like to steer clear of these areas.
For this reason, we’ve rounded up a list of the most affordable California cities for retirees, where they can hopefully fare better than they are now.
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Methodology
To compile the list of the most affordable California cities for retirees, we began by using a consensus approach to compile a list using sources such as Pods, California, Redfin Corporation (NASDAQ:RDFN), and Visit California, to name a few. Next, we ranked them on factors such as cost of living, median home price, median rent, and livability scores. Individual scores were added to generate a unique Insider Monkey score, and places were ranked in ascending order from the lowest to the highest scores. The cost of living index is from Insider Monkey, home prices have been sourced from Redfin, median rents are taken from Zillow, and livability scores are from Area Vibes. The cost of living index for the state of California is 138.5, which means cost of living is 38.5% higher than the national average.
It must be noted that the ranking of affordable California cities is based on statistical information and various factors considered in the analysis. However, as with any location, the safety and suitability of a place can vary. It is crucial to conduct thorough research and assessment independently before making any decisions or planning a move. Individual preferences, circumstances, and safety concerns should be taken into account for a well-informed decision.
Also note that the cost of living indices mentioned for these places in subheadings are relative to the national average, as opposed to the state average.
By the way, Insider Monkey is an investing website that tracks the movements of corporate insiders and hedge funds. By using a similar consensus approach, we identify the best stock picks of more than 900 hedge funds investing in US stocks. The top 10 consensus stock picks of hedge funds outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). Whether you are a beginner investor or a professional one looking for the best stocks to buy, you can benefit from the wisdom of hedge funds and corporate insiders.
Here is the list of the most affordable California cities for retirees:
15. Ontario
Insider Monkey Score: 14
IM Cost of Living Index: 123.3
Median Home Price: $631,000
Median Rent (1-bedroom): $1,849
Livability Score: 64
California is by no means a cheap state to retire to. However, when we compare cities like Ontario to, say, cities like San Diego, labeling the former as one of the most affordable California cities for retirees becomes a reasonable prospect. Located east of Los Angeles, this city boasts affordable housing options, reasonable rents, and a cost of living that is 15.2% lower than the state average. The favorable livability score further suggests that seniors can enjoy a good quality of life during their retirement in this location.
14. Folsom
Insider Monkey Score: 14
IM Cost of Living Index: 124.1
Median Home Price: $812,000
Median Rent (1-bedroom): $1,875
Livability Score: 72
Next up on our list of affordable places to live in California is Folsom. Its access to healthcare services, pleasant weather, and safe environment make it a destination worth retiring to. Retirees especially love how shopping and entertainment are nearby in the city. Costco, Sam’s Club, Safeway, Walmart, Target, and restaurants are all close by and within city limits. Its picturesque surroundings, recreational amenities, as well as welcoming community offer retirees an enjoyable lifestyle.
13. Fontana
Insider Monkey Score: 18
IM Cost of Living Index: 121.8
Median Home Price: $642,000
Median Rent (1-bedroom): $1,500
Livability Score: 65
Fontana’s cost of living may be an estimated 22% higher than the national average, but it’s 16.7% lower than the state average. The city boasts a thriving economy, beautiful parks, and a decent dining scene. There is even a program called “Affordable Housing for Renters” which offers a wide range of affordable housing options for families and seniors with low-income households.
12. Roseville
Insider Monkey Score: 18
IM Cost of Living Index: 126.2
Median Home Price: $590,000
Median Rent (1-bedroom): $1,831
Livability Score: 77
Another one of the most affordable places to retire in California is Roseville. The cost of living in this city is 12.3% lower than the state average, and the median home price hovers below the state median as well. The city boasts abundant choices for shopping and outdoor recreation, making it a destination worth retiring to. The weather is quite pleasant, and the Sierra Nevada Mountains are also close by.
11. Citrus Heights
Insider Monkey Score: 18
IM Cost of Living Index: 117.6
Median Home Price: $467,000
Median Rent (1-bedroom): $1,604
Livability Score: 63
Just like we mentioned in our previous study on the best places to retire in California, Citrus Heights is the place to be in California to retire on a budget. This community is well-equipped with parks, shopping centers, and recreational opportunities, enabling seniors to lead an active and engaging retirement. Moreover, its proximity to the Sacramento metropolitan area ensures further access to healthcare facilities, cultural events, and various amenities.
10. Vacaville
Insider Monkey Score: 22
IM Cost of Living Index: 130.7
Median Home Price: $578,000
Median Rent (1-bedroom): $1,750
Livability Score: 79
According to Redfin, living in Vacaville can be a pleasant experience due to its friendly environment and stunning natural landscapes. The weather in the city is just as inviting, offering mild winters and warm summers that are perfect for leading an outdoor lifestyle. Residents can live a good life here in Vacaville, accessing necessary amenities and being in proximity to larger areas. However, Redfin also notes that living anywhere has its pros and cons, and it’s important to analyze factors important to you before deciding to move.
9. Clovis
Insider Monkey Score: 31
IM Cost of Living Index: 103.9
Median Home Price: $480,000
Median Rent (1-bedroom): $1,100
Livability Score: 77
Another one of the affordable places to retire in California is Clovis. Situated in Fresno County, Clovis offers residents the opportunity to embrace a high quality of life surrounded by warm and welcoming neighbors and complemented by an abundance of sunny weather. The cost of living here is one of the lowest on our list, and only 3.9% higher than the national average.
8. Fairfield
Insider Monkey Score: 32
IM Cost of Living Index: 128.9
Median Home Price: $610,000
Median Rent (1-bedroom): $1,695
Livability Score: 70
Another recommended retirement spot in the state of California is the city of Fairfield. For many residents familiar with the locale, it often falls short of being deemed an ideal spot, as concerns about crime and related factors frequently emerge as primary reasons for the prevailing discontent. However, the truth is that there are plenty of great areas in the city that are ideal for retirement. A few pointed out by retirees in the city are Rancho Solano, Rolling Hills, Laurel Creek, neighborhoods off Oliver Road, and Paradise Valley.
7. Eureka
Insider Monkey Score: 39
IM Cost of Living Index: 109.5
Median Home Price: $370,000
Median Rent (1-bedroom): $1,090
Livability Score: 65
The port city of Eureka is home to sacred beaches and untouched forests, offering a serene yet affordable retirement experience to those on fixed incomes. The median price of a home in Eureka is almost close to the national median, and the cost of living is only 9.5% higher than the national average. The livability score is also quite decent for living your golden years.
6. Yuba City
Insider Monkey Score: 40
IM Cost of Living Index: 107.6
Median Home Price: $430,000
Median Rent (1-bedroom): $1,225
Livability Score: 78
Next up on our list of most affordable California cities for retirees is Yuba City. Retirees who have moved to the city claim that it is safer, cheaper, and friendlier than places such as Sacramento. Similar to other areas, there are parts of the city where there is crime and it is overcrowded. However, choosing good neighborhoods will ensure you don’t face such problems.
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Disclosure: none. 15 Most Affordable California Cities for Retirees is originally published on Insider Monkey.
