Although New York is home to one of the priciest cities in the world, the state itself no longer ranks as the most expensive U.S. state to retire, according to Bankrate.

This year, California takes the top spot on Bankrate's ranking of the most expensive states to retire, knocking New York — last year's No.1 — to second place.

To determine affordability, Bankrate analyzed state-level data on the cost of living, state and local sales taxes, average annual property taxes and the average cost of homeowners insurance from a number of sources, including the Council for Community and Economic Research and the Tax Foundation.

Here are the top 10 most expensive states to retire, according to Bankrate.

California living doesn't come cheap

California is well-known for having a high cost of living. Its overall cost of living is about 38% higher than the national average, and housing costs are 97% higher than the rest of the country, according to RentCafe.

That can make it hard to save enough. Retirement can last 25 years or more, according to Fidelity, but a $1 million retirement fund would only last about 14 years if you live in California.

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However, California is one of the largest states in the country and the cost of living varies from city to city. Living costs in Sunnyvale are around 125% higher than the national average, while the cost of living in Bakersfield, which is about two hours outside of Los Angeles, is 10% higher, per RentCafe.

Additionally, retirees in California face a significant tax burden compared with the rest of the country. Although retirement benefits from Social Security aren't taxed at the state level, withdrawals from your 401(k), individual retirement account, pension or other retirement account can be taxed as regular income.

A pricey retirement destination requires saving more

That's not to say you need to give up on your dream to retire in California — or any other place — simply due to the cost of living. It just may require you to set aside more money while you're still working.

"The more expensive the place you want to live, the more you need to save," says Anne Lester, a retirement expert and author of "Your Best Financial Life: Save Smart Now for the Future You Want."   

Gaining an understanding of how expensive your dream retirement destination is can help you set a goal for how much money you need to put away in order to be able to retire comfortably.

That knowledge can also help you determine what you may or may not be willing to sacrifice in the short-term in order to meet your long-term retirement goals, Lester says.

For example, if you want to retire in a specific, expensive place, you may need to consider potential compromises now, such as living in a smaller house, driving a cheaper car or traveling less so that you can funnel that extra money toward boosting your retirement savings, she says.

"Think of it as a trade-off between what you want now versus what you want in the future," Lester says.

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