Of all the places to put down roots in the latter stages of your life, you could probably do a lot worse than San Francisco or San Jose.
The two Bay Area cities are known for temperate weather, vibrant tech economies, proximity to beautiful beaches and nationally recognized parks, cultural diversity, a lively culinary scene and exciting professional sports teams, among other things.
Yet both San Francisco and San Jose rank on U.S. News and World Report’s recent list of ‘The 10 Worst Places to Retire.’
How could this be? The study cites the high cost of housing and assisted living as the primary reason why the two cities find themselves worthy of this dubious distinction.
Additionally, much has been made of Prop 30’s impact on California tax rates, saddling the most affluent residents with the highest tax rate in the country. Yet for all the economic arguments made by critics, the rankings don’t give enough weight to quality of life and other factors, says San Francisco Travel Association President and CEO Joe D’Alessandro.
“There’s no question that the cost of living in the Bay Area is higher than the rest of the country,” D’Alessandro said, “but you really do get what you pay for.” As an alternative, “if you’re looking for an inexpensive option I’m sure Topeka, Kansas is a lot less expensive than the Bay Area,” he continued. “But there’s no other part of the country that has the diversity of culture, the diversities of climates, the food and wine scene, the ocean and the mountains.”
D’Alessandro explains that San Francisco is trying to address its expensive housing problem by building more inventory.
More importantly, however, he says there are additional assets not being fully acknowledged by the report. “We have some of the best health care in the country, in fact people *come here to get health care services,” D’Alessandro said.
Indeed, U.S. News and World Report, the same publication that compiled the retirement list, also ranks UCSF as one of its exclusive ‘honor roll’ hospitals, one of the top 17 hospitals out of nearly 6,000 across the country. Stanford Hospital also received recognition as a nationally elite hospital. Additionally, Bay Area residents seem to adopt a lifestyle of healthier living, as evidenced by the highly visible contingent of walkers, bikers, hikers, runners and even casual strollers.
“We’ve seen surveys recently that say San Franciscans are some of the healthiest people in the country,” D’Alessandro said, “and a lot of it is because they have to walk, and they choose to walk.”
Not surprisingly, the Kaiser Family Foundation’s rankings of life expectancy by state places California third, with an average life expectancy of 80.4 years. For all the praise of Bay Area culture, weather and lifestyle, however, what about those pesky taxes and home prices?
“I don’t think for people who are out here already, or who came here with a purpose, that they’re going to be driven away by taxes or that’s going to be a huge consideration,” said Milo Benningfield, a certified financial planner based out of San Francisco.
Benningfield says he wouldn’t advise a client to avoid California simply because of the tax rates or cost of living, and choosing the Bay Area as a retirement destination is very “case specific.” For those already living in California and handing their finances, adjusting to retirement shouldn’t be an issue.
“It’s all about what you’re used to,” Benningfield said. “If you’re used to a lot lower cost structure somewhere else, then it may be difficult for you to come here right as you turn off the earning spigot.”
By contrast, Benningfield notes that if you’re out here already and benefiting from the higher incomes Californians make due to a higher cost of living, the retirement transition should be a smooth one.
There’s also one cost-saving point Benningfield wanted to highlight: People who move to California typically do so to enjoy the beach, the outdoors, the mountains or some other natural amenity specific to the state.
“Guess what? You don’t have to buy airfare, lodging, or any other cost [associated with the trip], you’re here,” he explained.
Curiously, U.S. News and World Report, in a 2007 report, ranked San Francisco as one of the best places for retirement despite the cost of living. We wonder if that much has changed in five years.