There are many reasons to pick your permanent retirement state, and this article will contrast CA to AZ, Texas or Florida. If you are a high-income CA resident with $200,000 or more annual income, these are the top 5 states with the largest net migration of these higher-earning Californian households: Florida with 29,700; Texas (8,200); N. Carolina (5,700); S Carolina  (5,200); and AZ (4,300). However, it’s also middle-income households that are moving out of CA for these main reasons.

Income Taxes: CA is known for having the highest state income tax in the US (up to 13.30%). The CA state income tax rate marginal rate is 8% for CA taxable income over $57,542; 9.30% over $72,724; 10.30% over $371,479; 11.30% over $445,771; 12.30% over $742,853; and 13.30% over $1 million. Even middle class households will be hit with at least an 8% or 9.30% rate. In contrast, Texas and Florida have NO state income tax and AZ is the state with the lowest flat rate of 2.50%. CA also taxes long-term capital gains as ordinary income rates. CA has a huge budget deficit projected by the Legislative Analyst’s office of $18-35 billion annually over the next few years and there are proposals to raise all sorts of taxes. In contrast, AZ, Texas, and Florida are much more fiscally conservative.

Property Taxes, Insurance and HOA Fees: CA homeowners normally face 1.0 to 1.3% property tax. However, there is a CA home insurance crisis and many of the large insurance companies have pulled out or refuse to insurance new customers. In the January-2025 wildfire disaster in S. CA, there were multi-million dollar homes that burned down that were NOT covered by any insurance. In Texas the property tax ranges from 1.31% to 1.68%, but if you are in a high-cost municipal water district, the total rate can be 4%. In Florida, the rate is approximately 0.71% to 0.83%, but the cost of home insurance has gone up 70% in the last 5 years due to hurricane losses. If you are in a condo, HOA fees have increased 60% since 2019. In Miami-Dade County, the monthly condo fee has increased 59% from $567 in 2019 to $900 in 2024. In AZ, property taxes are approximately 0.41% to 0.52%, one of the lowest in the nation. A client lives in a $670,000 Chandler house and the annual home insurance is $2,519 and HOA fees are $1,106.

Weather: This is purely a matter of personal choice. The two main cities in AZ are Phoenix and Tucson and for 6 months, it typically averages over 100 degrees. However, it’s a dry heat and a golfer mentioned that it’s far more comfortable to play in AZ 110 degrees than a muggy 90 degrees in Miami or Houston. I can testify to this. During summer, I almost passed out playing tennis for 30 minutes in Houston or Tampa at a muggy 90 degrees vs being able to play 2 hours in Phoenix at 105 degrees. Florida has hurricanes and heavy rainstorms; Texas has hurricanes and tornados; and CA has earthquakes and wildfires that are uncontrolled because the fire hydrants were empty in S. CA. Although CA is known for a great temperate climate, the reason data centers love being located in AZ is because there are really NO weather disasters.

Conclusion: Both middle-and- high-income households are leaving CA. Although Texas and Florida offer many attractions., Arizona has traditionally become a major retirement destination for many reasons.

To RSVP for future seminars or schedule a free consultation, please contact Dr. Harold Wong at (480) 706-0177 or This email address is being protected from spambots. You need JavaScript enabled to view it.. His website is www.drharoldwong.com.

Dr. Wong earned his PhD in Economics at UC Berkeley in 1974 and passed the National CPA exam in 1979. He has appeared on over 400 TV/Radio programs.