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Do social security benefits depend on your state? Which states have the highest payouts?

Although the Social Security Administration doesn’t factor in where you live when calculating your benefits, recipients in some states receive more.

Although the Social Security Administration doesn’t factor in where you live when calculating your benefits, recipients in some states receive more.

How much you receive from Social Security depends on several factors, but principally how long you worked, how much you earned each year and what age you retire at. Where you live can make a difference as you build up your future retirement fund, and once you retire, just how far the monthly payments will go.

It shouldn’t come as a surprise that the average monthly payment in states with higher incomes is generally larger than states with lower median incomes. But the larger monthly payments don’t mean those Social Security recipients are necessarily living the life of luxury.

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What is the average monthly Social Security payment

If you want to receive the full amount you are due upon retirement you will need to work well past the age of 62 when you can begin to collect your federal pension. Full retirement age (FRA) is currently 66 and 2 months, but in order to receive the maximum amount you could be entitled to you will have to work until 70 when you stop paying into the program. The amount you can get is calculated from the average of your wages over the 35 highest-earning years of your career.

The estimated average 2021 Social Security retirement benefit in the US is $1,543 a month. It rose by $20 from the previous year when adjusted for inflation, the COLA for 2021 was 1.3 percent but the increase for 2022 could be radically different. But the difference between the highest and lowest average check is around $271.

Which states have the highest monthly payments

The five states with the largest average payment also happen to be in the top ten for highest average incomes. They include New Jersey ($1,711.39), Connecticut ($1,707.20), Delaware ($1,607.79), New Hampshire ($1,665.80) and Maryland ($1,645.49) according to calculations by Moneywise. Despite the higher average monthly check, it won’t necessarily buy more for recipients. The cost of living in these states is also among the highest in the nation.

Connecticut is one of 13 states that tax social security benefits. However, recipients can deduct most or all of their benefits if their annual gross income is less than $75,000 for a single filer and below $100,000 for married couples. Above those thresholds 75 percent of a recipient’s benefits are tax exempt, the remainder is taxed at between 3 percent to 6.99 percent.

States with the lowest monthly average

Of the five states with the lowest average, only Maine bucks the trend of having an above average cost of living compared to the rest of the US. However, incomes in the state are below the national average with the other four states some of the lowest in the nation. The lowest average monthly Social Security checks are in Louisiana ($1,440.32), Mississippi ($1,445.69), Maine ($1,455.43), New Mexico ($1,459.65) and Arkansas ($1,465.71).


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