Many Retirees Receive CalPERS Benefits After Leaving California
Thousands of CalPERS recipients leave California after retiring but still receive pension and retiree health care benefits from the state, the Sacramento Bee's "The State Worker" reports.
About 15% of the 561,000 CalPERS recipients spend retirement out-of-state, according to "The State Worker."
In 2013, CalPERS paid $2.16 billion in benefits to about 81,000 pensioners who lived somewhere other than California. In comparison, about $14.4 billion in benefits were paid to in-state pensioners that year.
Why Pensioners Leave
According to "The State Worker," the majority of pensioners who leave California move to low- or no-tax states.
California is one of five states with income tax that offers no:
- Breaks for pensions;
- Exclusions for retirement income; and
- Tax credits for seniors.
Mark Beach, communications director at AARP's Sacramento regional office, said, "It's obvious that California's taxes and the cost of living drive some people out of the state."
Most Popular Out-of-State Destinations for Calif. Retirees
Four of the 10 non-California cities with the most CalPERS beneficiaries are in Nevada, with Las Vegas being the most popular out-of-state location.
According to "The State Worker," Nevada cities are close enough to California that retirees can maintain a California address in order to keep their health insurance with Kaiser Permanente, which does not operate in Nevada.
Meanwhile, three of the 10 most popular out-of-state cities for CalPERS beneficiaries are in Arizona and three are in Oregon. According to "The State Worker," the states are popular among pensioners because:
- Arizona has a low personal-income tax and excludes some pension income from taxation; and
- Oregon allows tax credits for residents ages 62 and older, among other things (Ortiz, "The State Worker," Sacramento Bee, 5/11).