Not New York, not Texas: The state where Social Security covers 90.8% of basic expenses for retirees over 65
For anyone making plans for retirement, there’s some states where your money will go a lot further than others.
Planning for retirement is never easy and there are an infinite number of factors that you will need to consider when leaving the workforce. But for all the retirement planning that you do, there is one element that can prove the most crucial: geography.
The cost of living varies greatly across the United States and can make a huge difference for retirees in particular. During your working life, areas with higher costs will typically have higher salaries to act as a counter-balance. In retirement, however, that is not necessarily the case.
Research from the American Association of Retired Persons (AARP) looked into which states offer the best value for money for retirees. They used the Elder Index - which considers costs of housing, healthcare, transport, food and other essentials - to estimate typical monthly expenses for Americans aged 65 and over. They then compared this to the average Social Security retirement benefits in the state, to see where that money would go the furthest.
Which state has the best Social Security payments for retirees?
The most recent set of figures, taken from 2023, showed a clear winner in terms of Social Security payments. The AARP study found that retirees in Indiana can expect to have 90.8% of expenses covered by Social Security payments. The average retirement benefit in the state is $1,966, while the typical basic monthly expenses amount to around $2,165.
Close behind in the rankings were West Virginia (87.7%) and Alabama (87.2%). Those are a long way from the states at the bottom of the list, New York and Hawai’i, where the average Social Security payment covers just 61.4% of basic monthly expenses.
These figure are taken as an average of a retiree’s typical monthly expenditure, but there’s other factors that can have a significant bearing on the situation. House ownership is a main one, with homeowners significantly better off than renters or those with outstanding mortgages.
Homeowners with no mortgage can expect to have all of their monthly expenses covered by Social Security retirement payments in 16 states: Delaware, South Carolina, Arizona, Indiana, Alabama, Utah, Nevada, West Virginia, Tennessee, North Carolina, Colorado, Georgia, Louisiana, Florida, Michigan and Idaho.
How many Social Security payments are there this week?
When and why your Social Security benefits can be withheld
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