The State Worker

Why CalPERS retirees flee California

Las Vegas loves seniors. The city and environs have 77 golf courses, according to the website, and virtually year-round weather to play. Driving around town is relatively easy away from the Strip with wide streets and traffic that flows quickly, even during rush hours.
Las Vegas loves seniors. The city and environs have 77 golf courses, according to the website, and virtually year-round weather to play. Driving around town is relatively easy away from the Strip with wide streets and traffic that flows quickly, even during rush hours. St. Louis Post-Dispatch

This city’s Spanish name recalls grassy, spring-fed meadows that nourished the first farms here and gave laborers relief from desert heat.

Now Las Vegas draws a new generation of settlers epitomized by California transplant Joe Beck: CalPERS pensioners who have made Sin City their No. 1 destination for retirement outside California.

“Compared to California, Las Vegas was a no-brainer,” said Beck, a former Southern California school district maintenance administrator who moved here in 2000. “I decided that if I could handle the heat three months out of the year, I needed to move to where my retirement check would be tax-free.”

About 15 percent of the 561,000 pensioners in the California Public Employees’ Retirement System live their golden years outside the Golden State, according to a first-of-its-kind analysis of fund data by The Sacramento Bee. The vast majority have flocked to low-tax or no-tax states, creating a veritable river of cash that flows out of California and into cities such as Las Vegas; Reno; Tucson, Ariz.; and Grants Pass, Ore.

Overall, CalPERS sent $2.16 billion to roughly 81,000 beneficiaries living elsewhere in 2013, based on monthly pension payments made in December of that year, the latest for which CalPERS data are available.

“It’s obvious that California’s taxes and the cost of living drive some people out of the state,” said Mark Beach, AARP’s Sacramento-based communications director, when told about Nevada’s popularity among CalPERS retirees. “I’m surprised the number of them leaving isn’t higher.”

Other retiree migration trends that surfaced in the CalPERS data include:

▪ Grants Pass and Lake Havasu City, Ariz., are the most popular retirement destinations for public safety retirees, a group that includes cops and firefighters.

▪ More than half of judges who retired outside California lived in Nevada, Oregon, Washington, Arizona and Florida.

▪ A handful of retirees listed mailing addresses in Puerto Rico and Guam.

▪ Average CalPERS pensions were smallest for residents of Sun City, Ariz. The town ranks near the bottom in pension dollars received despite ranking in the upper half in number of retirees living there.

▪  Los Alamos, N.M., home of the atomic bomb, ranked first in average pension-dollars-per-retiree at $4,372 per month. The reason: The retirees are former University of California employees who worked at the Los Alamos nuclear lab prior to 1962. Back then, UC non-academics were placed in CalPERS.

▪ About 85 percent of retirees took their mail at a California address in December 2013. They received $1.2 billion in pension benefits that month, which projects to roughly $14.4 billion for the entire year.

Las Vegas lured Beck and his wife, Dixie, 15 years ago, he said, after he scoured the nation for an affordable city with good weather, good hospitals, cheap homes and recreation.

Las Vegas was booming, Beck recalled. After a few scouting trips to the area, the couple settled on a 1,600-square-foot, three-bedroom, two-bath stucco home under construction on a corner lot on what was then the city’s northwestern edge. With the equity in their Whittier home, they had money to buy the Las Vegas house – and then some.

“We couldn’t have afforded to move into any place like this in Southern California,” Dixie Beck said during a recent interview at her kitchen table, “but we bought this house for $126,000, new.”

Today, a Las Vegas homebuyer with as little income as $37,500 per year can qualify for a mortgage, according to Meanwhile, homebuyers in San Jose and San Francisco need four to five times as much income to break into the market. California claims five of the 10 metro areas nationwide that require the highest income to afford a home. Sacramento ranks 23rd.

Las Vegas? 51st.

“That’s what it was like when we moved here,” Joe Beck recalled. “Like I said, no-brainer.”

Then there’s the Nevada discount.

Of the 10 cities outside California with the most CalPERS pensioners, four are in Nevada, one of only seven states with no personal income tax. Oregon and Arizona split the remaining cities on the top-10 list, with three each.

What they share – besides a border with California – are tax provisions favorable to retirees, according to the latest income tax-law survey by the National Conference of State Legislatures.

Arizona excludes a portion of pension income from taxation and has a relatively low personal-income tax. Oregon gives residents 62 and older tax credits on retirement income. Filers 65 and older get a bonus standard deduction. Plus, there’s no tax on retail sales in Oregon.

California, however, is one of just five states that tax personal income with no breaks for pensions, no exclusions for retirement income and zero tax credits for seniors. A handful of cities tax sales at 10 percent.

“Everything (in Las Vegas) is cheaper, and it starts with taxes,” said Chuck Logan, an 84-year-old former parks administrator from Moreno Valley.

Joe Beck, a Republican, said he figured California’s cost was exceeding its value when he was approaching retirement 16 years ago.

“You could see it coming in California, the big tax increases, the poorer quality of living,” he said.

Now, Beck watches California headlines with a grim satisfaction as the state has cycled in and out of fiscal crises and hiked fees and taxes. Gov. Jerry Brown’s successful bid to raise taxes in 2012 was, Beck said, the worst.

“You know what the difference is between the people on the Titanic and people in California who voted for Brown?” Beck said, chuckling during a recent interview at his home. “The people on the Titanic didn’t have a choice.”

Beck figured starting life over in his late 50s would be tough: The hassle of picking through decades of belongings to decide what to sell, donate or load in a U-Haul trailer. Selling the house in Whittier. Buying another – albeit cheaper – Las Vegas house.

There was also the emotional part, saying farewell to friends and family he’d known for decades, because he had lived his entire life in Southern California.

“But you know what? Saying goodbye was easier than you’d think,” Beck said. “It’s not like I was moving to Des Moines. Everybody said, ‘Las Vegas? That’s great!’ They wished they were coming too.”

Now those friends and family bunk at his house when they visit Las Vegas for its buffet dinners and entertainment, he said. Beck often gives them the 2-for-1 vouchers casinos dole out to drum up business from locals.

“That’s another thing about living here,” he said. “There’s a lot of stuff to do and you don’t have to spend a dollar.”

Las Vegas loves seniors.

The city and environs have 77 golf courses, according to the website, and virtually year-round weather to play. More than 1 million people visit the Red Rock National Conservation Area that juts into the horizon 17 miles west of the downtown.

Driving around town is relatively easy away from the Strip. The streets are wide and traffic flows quickly, even during rush hours.

“That’s a big reason people choose Vegas,” said Cleave Govan, who retired from Caltrans after 41 years and moved here. “They hate the California traffic.”

The streets in Las Vegas are particularly easy to use in the northern areas of town popular with seniors. Aside from a few spots downtown, parking is ample and no-charge.

“There’s not even any parallel parking here,” said Marlene Baker, a California Department of Social Services retiree. “I really like that.”

The city is close enough to California that a trip back to the homeland isn’t too taxing. Los Angeles is just a four-drive on Interstate 15. It’s so close, Govan said, that many retirees keep a California address to keep their Kaiser health insurance, because the HMO doesn’t operate in Nevada.

“That’s what I do,” Govan said.

The Strip offers a never-ending lineup of major entertainment, from pop diva Mariah Carey’s just-launched “#1 to Infinity” residency at Caesars Palace to illusionist David Copperfield to Donnie and Marie Osmond’s five-year run at the Flamingo Hotel.

Logan said he has tickets to see Neil Diamond at the Mandalay Bay Convention Center later this month. The balladeer’s catalog includes “Song Sung Blue,” which reached No. 1 in 1972, when Logan was 41 years old.

“I’ve seen him nine times,” Logan said over a Cobb salad lunch at the gated golf-course community where he lives in a duplex. “Nine times.”

Local casinos away from the Strip have shuttles into the surrounding neighborhoods that load up with seniors and ply them with $2.99 breakfasts and those half-price show tickets.

At the Texas Station Casino and Hotel in northern Las Vegas, the “My Generation” program offers visitors 50 and older $4 movie matinees, discounted dining, vouchers for a free small Starbucks coffee and other goodies.

“Yeah, the casinos, they cater to people like me,” Joe Beck said. “I can’t see myself living anyplace else.”

Call Jon Ortiz, Bee Capitol Bureau, (916) 321-1043.

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