from http://stackoverflow.com/a/27624397
Assuming you've used home-brew to install and upgrade Postgres, you can perform the following steps.
Stop current Postgres server:
launchctl unload ~/Library/LaunchAgents/homebrew.mxcl.postgresql.plist
Initialize a new 9.4 database:
initdb /usr/local/var/postgres9.4 -E UTF8 --lc-collate=C --lc-ctype=UTF-8
run pg_upgrade:
pg_upgrade -v \
-d /usr/local/var/postgres \
-D /usr/local/var/postgres9.4 \
-b /usr/local/Cellar/postgresql/9.3.5_1/bin/ \
-B /usr/local/Cellar/postgresql/9.4.0/bin/
Move new data into place:
cd /usr/local/var
mv postgres postgres9.3
mv postgres9.4 postgres
Restart Postgres:
launchctl load ~/Library/LaunchAgents/homebrew.mxcl.postgresql.plist
Check /usr/local/var/postgres/server.log for details and to make sure the new server started properly.
Finally, re-install the rails pg gem
gem uninstall pg
gem install pg
I suggest you take some time to read the [PostgreSQL documentation|http://www.postgresql.org/docs/9.4/static/upgrading.html] to understand exactly what you're doing in the above steps to minimize frustrations.