Why More California Retirees Are Taking Their Pension Out Of State

According to the California Public Employees' Retirement System (CalPERS), at least 81% of the state's retired workers have decided to stay in the Golden State as they collect their pensions or other retirement benefits. However, the Sacramento Bee reported that, while the volume of retired California pension-collecting state employees and their beneficiaries grew by 11% from 2019 to 2025, the portion of that community who opted to move elsewhere shot upward by 29% in the same period. In short, the number of retired California workers who are leaving the state is outpacing those who opted to stay.

This trend isn't exclusive to those who worked for the state: The U.S. Census Bureau revealed that California had a net migration loss of 254,332 people in 2024, the most of any state. That includes the most net out migration of all adult age demographics, including people aged 60 and over, according to Retirement Living's analysis of the data.

A study by the Public Policy Institute of California (PPIC) suggests the main reason this is happening is the high cost of housing. Per the PPIC report, between 2010 and 2024, about 10 million people moved out of California while only approximately 7 million moved in. And while the report noted that California's population has declined steadily since 2001, the number of people who cited the cost of housing as a reason to leave increased from 251,000 in the decade spanning 2004 to 2014 to 884,000 between 2015 and 2025.

In March 2025, Redfin named California the state with the most expensive housing market in the U.S. Back then, the median sales price was $785,000. By December 2025, that figure had increased to $792,800, considerably more than the $428,000 that the national median price hovered around at the time.

So, a home in California can be a great thing to sell before retirement considering that those proceeds will likely last longer outside the state. That's because the unexpected value of $100 in California was just $87.42 — the worst purchasing power ratio of anywhere in the country — per a June 2025 GoBankingRates report. In contrast the value of $100 in Texas, the top destination for those leaving California in 2023 and 2024, is $102.83.

PPIC senior fellow Hans Johnson says that selling a California home would give many pensioners the freedom to live quite comfortably elsewhere. "If you bought your home many years ago — and many older Californians have done that — you have a tremendous amount of equity, because housing prices have increased all over the state," Johnson told the Sacramento Bee.

Housing prices are a large reason why California is among the most expensive states to live in. The Department of Housing and Urban Development defines any household that spends more than 30% of its income on housing as cost burdened, and CNBC reports 40% of California homeowners fall into this category based on its analysis of data from the Council for Community and Economic Research.

And the problem isn't just housing: WorldAtlas reports California has the third highest grocery costs in the country, while WalletHub's report on Tax Policy Center data finds the state has the fourth highest overall tax burden based on income. Those costs come from income taxes, property taxes, and a relatively high 7.25% sales tax. All of these factors inform why the Golden State is the third most expensive state to retire, per another Retirement Living report.

Nevertheless, pensioners who do desire to leave should do their research, so they aren't surprised by the cost of living of low-tax states.