A Little-Known Los Angeles Suburb Is Considered One Of America's Most Expensive Retirement Communities

As per the Federal Reserve, retirement-age individuals 65 years old to 74 in 2022 had a median net worth of just over $1.7 million at the time of their retirement, representing an increase of 27% over the 2019 average of just over $1.4 million. A 2024 survey by Northwestern Mutual found that a third of Gen Xers believe they'll need more monthly income in retirement than they currently make, while 16% also admit to having saved less than the equivelant of their current income. Even more telling, the younger the generation surveyed, the less prepared for retirement they feel. While just under half of Gen X — 48% — feel they are financially prepared for retirement, across the board, including Gen Z, Millennials, Gen X and Boomers, 46% of Americans say they are unprepared for the financial demands of retirement.

According to a recent GoBankingRates study of the minimum amount of savings needed to retire in each state, California is among the top-three most expensive, and is one of the most expensive states to live in. With a yearly average estimate of $86,945 per year to retire comfortably, you would need an average $1,612,716 to retire in California. While that's pretty expensive, there's a Los Angeles suburb that is even more expensive than the state average.

Much like retiring in any wealthy state, Cerritos is a Los Angeles suburb that will require a lot of retirement savings to afford you a comfortable lifestyle. More than a quarter — 25.5% — of the population of this retirement town is made up of seniors, 65 years old and up. It will cost you $92,771 per year to live comfortably there, which is $5,826 per year above the average estimate for California.

According to Zillow, the average cost of a home as of December 2024 was $356,585. Compare that to Cerritos' average home value of $1,092,307, and you get some sense of how much retirement life in Cerritos will set you back as a retiree. The U.S. national average for rent, as per Zillow, is $1,965 per month, or $23,580 per year. The average rent in Cerritos, by comparison, is $29,401 for a married couple.

In 2023, as per the Bureau of Labor Statistics, Americans spent an average of $6,053 per year on groceries, or around $504 per month. The grocery bill for the average household in Cerritos is around double that at $12,842 per year, or roughly $1,070 per month. The Bureau also found the average annual expenditure on healthcare in 2023 was $6,159 per year. In comparison, the cost of healthcare in Cerritos is $8,775 per year.

Factors in determining how much you should really save for retirement each year should include when you plan on retiring and how much you are likely to have to spend on the rising cost of healthcare in your older age. The median household income in Cerritos is $59,982 per person, or $124,460 per household. This amount is 35% higher than the average for all of California, and again, doesn't take into account health costs including long-term care which, as per SeniorLiving.org, average $4,068 per month or $48,816 per year. 

According to Johns Hopkins Bloomberg School of Public Health, the average life expectancy in the U.S. is 78.6 years. Assuming you work up to the full retirement age of 67 years old, you'll need to cover at least 11.6 years at Cerritos' cost of living, with the understanding that you could outlive that average or require assisted living options that will raise those costs further. Since most financial experts agree that your retirement savings should be 10 to 12 times your annual income by retirement age, you should already have an idea of whether Cerritos is a good option for you, or if one of these five U.S. states with the cheapest assisted living costs for seniors are a better option.