Seniors Aren’t Planning to Retire in California

Seniors are not flocking to California for retirement. In a recent survey of baby boomers’ retirement plans by Yardi, California didn’t even break the top 10 states for retirement, with only 6% of respondents saying they plan to move to California post retirement. Florida, on the other hand, along with Arizona were the top destinations for retirement.

“On the one hand, it’s a cultural/generational thing. While California is the dream destination for Gen Z and Millennials, for Gen X respondents it didn’t even make the top 10, when we surveyed generational differences on housing among Gen Z, Millennials and Gen X last year,” Eliza Theiss of Property Shark by Yardi, tells GlobeSt.com. “On the other hand, ties into your previous question: cost.  Considering the overheated market conditions in California, it’s not surprising so few boomers want to retire to California. Housing cost burdens are already outsized in California, and that only increases with older adults.”

Cost is the most important factor that retirees are considering when choosing a location, and it is directly tied to the top destinations for retirement. Of course, it isn’t the only factor. “Our study showed that cost is the most important concern and deciding factor for boomers when looking at where to retire, regardless of retirement plan or timeline, followed by proximity to family and friends,” says Theiss. “Amenities and area health services are about as important, with climate rounding out the list. Considering the large percentage of boomers and older gen-Xers who plan to only partially retire or not at all, I’d say the local job market and the opportunities it offers to older adults is and will be an important factor as well.”

With the increase in the 65-plus age group, many investors are increasing capital allocation to senior housing. However, the report shows that only 10% of respondents are planning to move into senior housing. While Theiss didn’t have specific investment advice, these statistics could alter the outlook for senior housing. “I will say that demographics can be ignored for only so long. Whether markets and industries are ready, Boomers are retiring in droves,” she says. “Not only that, but they also control the vast majority of disposable income in the U.S. Yet they continue to be ignored by marketers, and when they are targeted, the infantilization of older adults remains a large problem. So whether it’s housing, cars, tech, travel or whatever, industries need to really listen to boomers’ needs and wants. There is plenty of money to be made by catering to boomers’ wants, and especially needs.”