The 10 States Where Social Security Goes the Furthest

See how retirement benefits stack up to cost of living where you live

Andy Markowitz,

AARP

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En español

Published October 07, 2024

Social Security was never intended to match earnings from your working days. On average, retirement benefits replace about 40 percent of retirees’ work income — more than that for people who worked in low-wage jobs, less for those who had more lucrative careers.

But many retirees do rely on Social Security to cover a significant share of their day-to-day expenses. Among Americans 65 and older, 42 percent of women and 37 percent of men get at least half their income from the program, according to the Social Security Administration (SSA).

Having a sense of how your benefits compare with your costs is crucial to sound retirement planning. It’s a key piece of data in deciding when to retire and determining how much you’ll need from other sources — such as savings, a pension or part-time work — to cover the rest of your bills and give you the financial freedom to pursue the retirement you want.

“We zoom out with a plan, if you will, and look at [a client’s] entire asset base for retirement,” says Brian Ford, an Atlanta-based wealth management adviser with Northwestern Mutual. “We know you’re going to have Social Security, and [we] figure out precisely what makes the most sense to hit the ‘on’ switch to start receiving those benefits.”

Of course, living costs vary widely depending on where (and how) you live. “If you’re looking at a retiree living in New York versus, let’s say, Alabama, their lifestyle expense is going to be a little bit different from one another,” Ford notes.

So, too, can Social Security retirement benefits, from an average of $1,756 a month in Mississippi to $2,114 a month in Connecticut in December 2023, according to the SSA’s most recent annual data book.

Everyone’s situation is different, and there are wide variations in income and costs within states as well as between states. But in general, Social Security benefits will go further in states where relatively low living costs meet relatively high incomes, lifetime earnings being the prime factor in determining your monthly benefit.

We did the math to provide a broad sense of how far benefits go to cover basic expenses in all 50 states and the District of Columbia, using SSA payment information and cost-of-living data from the Elder Index, a tool developed by the University of Massachusetts, Boston’s Gerontology Institute that measures how much income older Americans who are aging in place need to meet their basic needs. Here are the 10 states where benefits go the furthest (you can check the numbers for your state on the map above or the charts below).

What the numbers mean

The Elder Index uses federal data on costs for housing, health care, food, transportation and other essentials such as clothing, phone service and household products to estimate monthly expenses for Americans ages 65 and over based on where they live; household status (single or couple); overall health (poor, good or excellent); and housing situation (renter or owner). Spending on recreation, entertainment and gifts are not included, and the index does not take state income and sales taxes into account.

For this article, we used the 2023 cost-of-living figures for a single retiree in good health in each of the index’s three housing categories: renter, homeowner with a mortgage and homeowner without a mortgage.

For the map and top 10 table, we took the average of those three numbers in all 50 states (plus D.C.) and compared them with the average Social Security retirement benefit to show how far benefits go in covering costs. In Indiana, for example, the average monthly benefit of $1,966 amounts to 90.8 percent of basic expenses in 2023. (Where do benefits stretch the least? Hawai‘i and New York, tied at 61.4 percent.)

The table below shows how far the average benefit goes for a single person in good health in each of the three housing categories. You can scroll through the listings using the bar on the right and click at the top of each column to reorder the table based on the data in that column.

You can use the Elder Index to tailor cost-of-living estimates to your own situation (for example, if you live with a spouse or have serious health issues) and drill down to county-level data. Jan Mutchler, who oversees the index as director of the Gerontology Institute, says many people use it because “they need to move someplace that is going to be more affordable for them in retirement.” She cautions that its calculations are just one data point to consider.

“There isn’t a single county in the country where the average [Social Security] benefit is enough to cover the costs specified in the Elder Index for a single renter in good health. What that means is that people have to say, ‘OK, so now what? What is my next move?’ ” she says.

“There’s a lot of variability in both of those things in terms of lived experiences,” Mutchler adds. The key is “using that information as a launching point, and perhaps as a call to action, to look at your own expenses and your own resources — to dig in deeper, to understand what your situation is likely to look like and begin to think about some strategies for closing the gap.”