Does cost of living matter in retirement? Well, it matters when ranking best places to retire

So why do rankings of all sorts often vary widely?

View the creators of all those data-driven rankings like a chef.

Sure, selection and quality of ingredients matters — or, in this case, choosing the underlying economic and demographic stats that build a ranking’s metrics.

But it’s the recipe — how the ingredients are mixed — that can truly impact the final result. You know, a dash here. Or a pinch there.

Take retirement. How the complex concept of personal finances figures into a person’s location choice for their golden years is by no means a set number.

Did you save enough? Are you a heavy spender? What might medical costs be? All are fairly unique parts of any household’s happy-retirement recipe.

But recent, noble efforts of data crunchers at WalletHub, Bankrate and Kiplinger’s to gauge the states in terms of retirement livability factors help show how the statistical mix can alter a ranking’s outcome.

I used my trusty spreadsheet to combine this trio’s retirement rankings in order to give a composite picture of strengths vs. weaknesses. I reassembled their published ranking data — overall scores, subindex grades and related data — into three categories: cost-of-living; character (culture and climate); and care (healthcare and healthiness).

Imagine making the costs measurement doubly as important as the other two metrics. That’s probably good for folks who are carefully watching their retirement pennies.

Florida and South Dakota were the top two. Utah was third followed by Wyoming and Tennessee.

California was the ninth-worst state for retirement when personal budgetary items were given high importance. And New York and New Jersey were worst-to-retire-to states by this math.

On the other hand, there are folks who don’t worry much about money. Perhaps they have generous pensions or saved smartly (or were simply lucky).

Also, note what many studies of retirees’ views on their quality of life after employment reveal. Life’s intangibles — friendships, families, and health — are far more critical to seniors’ happiness than many of factors frequently used to study best-place locations.

So, what if costs weren’t part of the retirement math, just the character of a state and the quality of its senior care?

According to this formula, the top three states shift to Vermont then Hawaii and Maine. Vermont was No. 40 when costs were a double factor.

Meanwhile, Florida and South Dakota fall into a tie for eighth place when costs aren’t part of the recipe. Tennessee drops to No. 40.

And California, minus its well-known high expenses? The 15th-best state for retirees.

Have you checked out Bubble Watch …

Bubble Watch: Are house hunters shying from newly built homes?

Bubble Watch: Is California’s anti-business vibe killing the state’s economy?

Bubble Watch: Home-equity loans back at pre-recession levels

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California ranks sixth-worst state to retire to — or 15th best

California is the sixth-worst state to retire in.

Or 15th best.

That’s the confusing message from three recent state-by-state, best-to-retire rankings based on a myriad of economic and demographic stats.

Data crunchers at Bankrate and Kiplinger’s both ranked California No. 45 among the states for desirability as a place to live out one’s golden years. But statisticians at WalletHub placed California 30 notches higher!

How do you explain the gap? Well, let’s look at how California’s grades varied by those doing the rankings.

Remember, when it comes to rankings, beauty is in the eyes of the grader. My trusty spreadsheet — filled with retirement data and rankings of WalletHub, Bankrate and Kiplinger’s — found that even population counts display a deep statistical divide.

Yes, California has 5 million people aged 65 or older, the largest number of seniors in the nation. Certainly, that means something. But that flock equals only 12.9 percent of all Californias, the sixth-smallest share of 65-plus residents nationally. Are we young? Or unattractive to retirees?

Then look at the ranking divergence when it came to expenses. Yes, California’s expensive … but just how much pricier vs. other states is up for debate.

Bankrate found California third worst for cost-of-living and third-worst for its tax rates. But WalletHub scored California 14th worst for “affordability.” And Kiplinger’s noted California’s 65-plus households had a $65,904 average income, sixth-best among the states.

As for scoring conditions for care for seniors, Bankrate ranked California No. 19 for healthcare quality and No. 14 for well-being. WalletHub gave the state a No. 16 ranking for healthcare. And Kiplinger’s cited average healthcare costs for a retired couple of $430,867. That’s above a national average of $423,523 and 10th highest among the states.

Of course, California “cool” scored well. Bankrate gave the state a No. 14 ranking for the weather, No. 20 for culture, but 19th-worst for its crime. WalletHub ranked the state third-best for quality of life.

California appeared trickier to grade than other states as the three rankings had some agreement on the where-to-retire extremes.

Best states? Well, South Dakota made the top three among each surveyor: For Wallethub it was Florida, Colorado and South Dakota; Bankrate was South Dakota, Utah and Idaho; and Kiplinger’s list was topped by South Dakota, Hawaii and Georgia.

Worst states? New York and Maryland got double dings in the bottom-three grades: Wallethub (Kentucky, New Jersey, and Rhode Island); Bankrate (New York, New Mexico, and Maryland); and Kiplinger’s (New York, Massachusetts, and Maryland).

Here’s how the 50 states ranked in this trio of gradings for retirement quality, listed in alphabetical order …

State Wallethub Bankrate Kiplinger’s
Alabama 41 24 28
Alaska 30 36 42
Arizona 10 29 17
Arkansas 46 46 49
California 15 45 26
Colorado 2 17 11
Connecticut 34 35 20
Delaware 25 19 13
Florida 1 5 1
Georgia 37 37 45
Hawaii 42 11 5
Idaho 8 3 12
Illinois 31 44 46
Indiana 32 22 43
Iowa 4 16 9
Kansas 17 25 23
Kentucky 50 30 48
Louisiana 44 47 50
Maine 23 22 14
Maryland 38 48 41
Massachusetts 19 12 8
Michigan 29 14 21
Minnesota 11 28 19
Mississippi 47 10 36
Missouri 18 15 24
Montana 13 6 7
Nebraska 33 9 22
Nevada 16 42 38
New Hampshire 7 4 3
New Jersey 49 32 35
New Mexico 43 48 47
New York 40 50 40
N. Carolina 28 6 15
N. Dakota 24 20 27
Ohio 20 38 32
Oklahoma 36 40 44
Oregon 26 39 31
Pennsylvania 14 31 16
Rhode Island 48 34 34
S. Carolina 27 41 39
S. Dakota 3 1 2
Tennessee 35 21 30
Texas 22 17 29
Utah 9 2 6
Vermont 39 26 10
Virginia 5 13 4
Washington 21 43 33
W. Virginia 45 33 37
Wisconsin 12 26 25
Wyoming 6 8 18

Have you checked out Bubble Watch …

Bubble Watch: Are house hunters shying from newly built homes?

Bubble Watch: Is California’s anti-business vibe killing the state’s economy?

Bubble Watch: Home-equity loans back at pre-recession levels

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How much does your CEO make compared to you? Now, that ratio is public.

In Long Beach, Joseph Zubretsky, the new CEO of Molina Healthcare, the giant insurer, is set to take home $20.9 million over a year.

That’s 450 times the pay of Molina’s median worker.

Michael Mussallem, CEO of Edwards LifeSciences
Michael Mussallem, CEO of Edwards LifeSciences

In Irvine, Michael Mussallem, CEO of Edwards LifeSciences, the heart valve manufacturer, made $10.8 million last year.

That was 215 times more than Edwards’ median employee.

In Glendale, Ronald L. Havner, Jr., CEO of Public Storage, the self-storage company, earned $10.5 million.

That was 439 times the salary of his company’s median worker.

Across Southern California and the nation, eye-popping pay ratios between chief executives and the rank and file are being disclosed for the first time, under a federal mandate seven years in the making.

“The titans of industry tried to bottle up this rule,” said former California treasurer Phil Angelides who chaired the federal Financial Crisis Inquiry Commission which investigated the causes of the Great Recession.

“CEOs have managed to plant themselves in a river of money,” he added. “But the rise in productivity since the 1950s has not led to a parallel rise in workers’ wages.”


Publicly-traded companies have been disclosing top managers’ pay since 1933, information that’s typically buried in proxy statements filed with the U.S. Securities and Exchange Commission. But the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, spurred by shareholder demands for transparency and taxpayer fury over Wall Street bailouts, is shining a new spotlight on CEO compensation.

In recent years, the nation’s 8,100 public companies began giving investors a nonbinding “say-on-pay” vote on executive compensation. Now, those same companies also must divulge the pay ratio between their CEOs and their rank-and-file, dividing the top boss’s earnings by those of the median employee — the level at which half the company’s workers make more and half make less.

Whether you’re a Wal-Mart cashier, a Bank of America teller or a Boeing engineer, you’ll be able to go to, the commission’s website, click on “company filings” and compare what you make to the chief executive’s take. You also can see median pay information for colleagues and look up the compensation ratios at comparable businesses.

In 2016, a poll by the Stanford Business School’s Center for Corporate Governance found that 74 percent of Americans believed CEOs in the largest 500 companies are not “paid the correct amount relative to the average worker.” It also found that 62 percent believed CEO pay should be capped “no matter the company and its performance.”

A stark reality underlies that sense of inequity.

From 1978 to 2016, CEO compensation at the nation’s 350 largest firms rose 937 percent, 70 percent faster than the stock market, according to the Economic Policy Institute, a Washington, D.C. think tank which issues a yearly executive pay report. Over the same period, the report found, the typical worker’s compensation grew 11.2 percent.

In 2016, the nation’s 350 biggest public companies paid their CEO an average of $15.6 million.


When he was running for president, Donald Trump told CBS’s “Face the Nation” called CEO pay “disgraceful…You see these guys making these enormous amounts of money, and it’s a total and complete joke.”

But he added this: “It’s very hard, if you have a free enterprise system, to do anything about that.”

Corporate groups call the ratio rule a crude measure. Smaller technology firms with an educated workforce may have narrow ratios. Large retailers with many low-skilled part-timers, and manufacturers with numerous foreign employees, have wide gaps.

Mattel, the El Segundo toy maker, famous for its Barbie dolls, is a case in point. Its CEO-to-worker pay ratio — 4,987 to one — is partly because three quarters of its workforce is in China and other low-paying countries, dragging down the median worker’s annual pay to $6,271.

Margaret Georgiadis, CEO of Mattel
Margaret Georgiadis, CEO of Mattel

But regardless of the ratio, Mattel CEO Margaret Georgiadis’ $31.3 million windfall last year was double the norm at large companies. It included two one-time grants of $14 million and $11 million in company stock to lure her away from a previous job at Google.

Given fears over shareholder anger and plummeting worker morale, companies are expanding their public filings to explain some of the disparities.

Long Beach’s Molina, which insures mainly low-income clients, lost $512 million last year and laid off 7 percent of its workforce, some 1,750 employees. CEO Zubretsky, hired from another insurer in November, got a $4 million sign-on bonus and $15.5 million in stock options.

Molina’s median worker made $46,397 last year.

“All of our employees will benefit from the success of the turnaround Mr. Zubretsky is leading,” the company said in a statement.

“The vast majority of his compensation is both performance-based and long-term in nature such that his interests are fully aligned with the interests of all our shareholders – he wins only if they win.”

Joseph Zubretsky,  CEO of Molina Healthcare
Joseph Zubretsky, CEO of Molina Healthcare

Edwards LifeScience’s proxy statement noted that sales grew 16 percent last year, adding that “89% of the total direct compensation of our CEO…was performance-based.” The company’s median employee made $50,195.

Public Storage’s $10.5 million CEO pay is justified by the firm’s “superior” shareholder returns, its proxy statement suggests. Dubbed a “cash cow” in the financial press, the firm’s market capitalization grew from $4 billion to $35 billion since 2002, when Havner took over as CEO.

Ronald L. Havner, Jr., CEO of Public Storage
Ronald L. Havner, Jr., CEO of Public Storage

Its median worker earned $23,921 last year.

The ratio rule is “kind of a dig” at CEOs, Havner said.

“Comparing what I do to the median employee is not even apples and oranges. It’s more like fruit compared to Star Wars. They don’t know how to allocate capital, and their educational level and skill set is vastly different.

“People have decisions to make as to whether they want to improve themselves and get higher paying jobs,” Havner added. “Some people decide to do that and others don’t.”


But why don’t rank and file employees share more in the wealth they help create?

That question is driving efforts in the California legislature and in several other states to penalize firms with big CEO pay ratios.

A bill sponsored by Sen. Nancy Skinner (D-Berkeley) would raise the state’s 8.84 percent corporate tax rate to 10 percent for companies with ratios between 50-to-one and 100-to-one. The tax would then grow in steps, reaching 13 percent for companies that award the CEO more than 300 times what they pay their median worker.

The measure, SB 1398, would also hike the tax by 50 percent on firms that cut their U.S. staffs while growing their contract and foreign work forces.

“We need to motivate good corporate behavior,” Skinner said. “When companies pay minimum wage, or just above, then taxpayers foot the bill. Their workers’ depend on food stamps, Medi-Cal and other government programs.”

In 2014, a similar measure gained a majority in the state senate but failed to reach the required two-thirds threshold for a tax increase. The California Chamber of Commerce placed the bill on its “job-killer” list, as it has the Skinner bill, a lobbying effort that often dooms legislation.

But Skinner sees Trump’s recent tax law, projected to save corporations about $320 billion over ten years as boosting her bill’s chances. “Corporations got a huge windfall, so they are in a better position to pay their employees more,” she said.

“Employees, not just CEOs, contribute to profits.”

In March, Bloomberg estimated about 60 percent of the tax bill gains so far are going to investors, compared with 15 percent for employees. That is fueling growing demands for higher wages and a sharper focus on CEO pay ratios.

Hundreds of Disneyland workers attended a Town Hall sponsored by Disney Resort labor unions in Anaheim on Wednesday, Feb. 28, 2018. They came to discuss a survey showing that they struggle to make ends meet on their Disneyland wages, and announced a ballot initiative to raise the minimum to $18 an hour. (File Photo by Kevin Sullivan/Orange County Register/SCNG)
Hundreds of Disneyland workers attended a Town Hall sponsored by Disney Resort labor unions in Anaheim on Wednesday, Feb. 28, 2018. They came to discuss a survey showing that they struggle to make ends meet on their Disneyland wages, and announced a ballot initiative to raise the minimum to $18 an hour. (File Photo by Kevin Sullivan/Orange County Register/SCNG)


The Walt Disney Company, one of Southern California’s biggest employers, with 30,000 workers at Disneyland Resorts, stands to gain an estimated $1.6 billion a year under the new tax law.

The company also is in the crosshairs of both its unionized workforce and its shareholders over chief executive Robert Iger’s compensation.

At Disney’s annual shareholder meeting in March, in a stunning say-on-pay defeat, 52 percent of shareholders voted against the Disney CEO’s $36.3 million compensation.  ISS Analytics, a data analysis firm, calculates Iger is set to make roughly $423 million over the next four years if a deal to buy assets from 21st Century Fox is consummated, Reuters reported.

Robert Iger, CEO of The Walt Disney Company
Robert Iger, CEO of The Walt Disney Company

Disney’s board argued the lucrative package is “critical” to retaining Iger, 67, who has presided over record profit growth and has considered retiring.

That argument fell flat with a coalition of Disneyland unions which organized a protest at the company’s March meeting, wielding signs proclaiming #StopDisneyPoverty.

The coalition recently released a study by Occidental College and the Economic Roundtable, a nonprofit research group, which cited federal census and economic data showing the average hourly wage for Disneyland workers dropped to $13.36 from $15.80 in inflation-adjusted dollars between 2000 and 2017.

Disneyland pegs its average wage at $37,000 a year, but that includes tips paid by customers at the resort’s restaurants and hotels.

Artemis Bell, 32, a Disneyland night janitor who makes $11.86 an hour after seven years, was among the workers attending Disney’s annual meeting.

“Bob Iger makes more in a year than anyone in my department makes in three lifetimes,” Bell said.

“I work very hard at my job to maintain quality,” she said. “But I’ve had to go to food banks and sleep on a mattress in a living room to make ends meet. I recently had pneumonia, but I couldn’t afford the $40 co-pay to go to the doctor.”


Whether the ratio rule survives may depend on the 2018 mid-term elections, given that the focus on CEO pay is strongest among Democrats.

After Trump’s election, Michael Piwowar, a Republican SEC member who was named acting chairman, sought to overturn the mandate. In his view, it was an attempt to “name and shame” executives which “harms investors, negatively affects competition, promotes inefficiencies, and restricts capital formation.”

And in June the GOP-led House of Representatives passed a bill, the Financial CHOICE Act, repealing the ratio rule.

But investors pushed back.

Anne Sheehan, Director of Corporate Governance at California’s State Teachers’ Retirement System, with a portfolio worth $222 billion, wrote the SEC:  “There is a point where shareholders and the broader marketplace are not reaping the benefits of these high levels of pay…Outsized pay at the top can affect morale down the chain of the organization.”

The Senate, fearing a Democratic filibuster, has so far declined to take up the ratio rule repeal.

“In many instances, there is no correlation between outsize CEO pay and the success of a corporation,” said Angelides, the former California treasurer, citing government bailouts of Citigroup, Merrill Lynch, and AIG, all run by CEOs with multi-million dollar pay packages.

“I’m fascinated by the myth of the ‘indispensable CEO,’” he added. “Legions of CEOs run public companies that have been around for decades. They’re not entrepreneurs who create real wealth through genius. If one collapses on the golf course, hundreds of qualified people are around to take that job.”


A recent survey by the investment research firm MSCI, titled “Out of Whack,”  compared ten years of CEO pay to financial and stock market returns at 423 companies. The survey found high-paid CEOs among the worst performers and lower-paid CEOs among the best, even when counting market gains on their stock awards.

“More than 61% of the companies we studied showed poor alignment relative to their peers,” the study concluded.

Moreover, CEO pay is often buoyed by a bull stock market, unrelated to the executive’s actions, studies find. Stock prices are pumped up by financial engineering, such as share buy-backs, and boards of directors — the people who approve compensation packages — are typically stocked with friendly executives from other companies who tend to reward their peers. CEOs may be tempted to earn more by boosting short-term profits over long-term growth.

Public pension funds are most likely to vote against questionably high CEO pay packages, according to the annual “100 Most Overpaid CEOs” report issued by As You Sow, a non-profit shareholder advocacy group. But large mutual funds, such as BlackRock, Vanguard and Pimco rarely vote against high-paid CEOs with poor financial performance, according to the report’s tallies.

“Those who own mutual funds through 401ks and other investment vehicles must hold fund managers accountable,” the report concludes.

Margarethe Wiersema, a corporate strategy professor at UC Irvine’s Paul Merage School of Business, says prior to the 1980s CEO pay wasn’t “so extravagant.”

“Back then, the CEO of a company like General Motors might make a salary of about $1.5 million. He would get a bonus, depending on profit, but never more than 100 percent of base pay,” Wiersema said.

But after the hostile takeovers of the 1980s — when leveraged buyout firms would oust corporate leaders for sluggish stock growth — the nature of CEO pay changed, becoming directly tied to stock price.

“The intentions were good, but compensation went haywire,” Wiersema said.

Abuses proliferated, she added. Some companies that granted stock options to CEOs would then back date them or re-issue them when the price went down, offering the illusion of tying pay to stock performance but eliminating the risk.

Wiersema said she would like to see “more teeth” in the say-on-pay rule to make companies justify high CEO pay.  Ratio disclosures won’t have an impact, she predicted: “Just because a board takes money away from a CEO doesn’t mean that money will be channeled to workers.”

Nor does Wiersema favor tying taxes to ratios, as Skinner‘s bill would do.

A better strategy, she suggested, would be for governments to raise mandatory minimum wages. “It’s ridiculous we taxpayers are subsidizing these companies’ low labor costs. They should pay their employees better.

“And if it means a burger costs 30 cents more, so be it.”

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